PRIVATE RESIDENCE CLUB CONCEPT

Fractional Ownership and the Private Residence Club concept are among the fastest growing sectors of the tourism, real estate and hospitality industries with the number of identified resorts offering these products worldwide increasing by 39% in 2006 to 249. Annual fractional sales volume has increased from $55 million in 1999 to over $2.4 billion in 2007.(Source: 8th Annual Fractional Interest Report by Northcourse Advisory Service and Ragatz Associates 8th Annual Fractional Converence)

Research shows that up–scale fractional developments appeal to those in a high–income bracket who enjoy the exclusivity of ownership in a private club with luxurious appointments and high service standards.

Astute individuals, though in a position to purchase a second home or vacation home, appreciate the value of paying only for what they can take full advantage of, without the stress and maintenance overhead of whole ownership. Key components of a Private Residence Club such as Paramonte include:

• A top–tier resort location
• Superior finishes and furnishings
• Exceptional architecture
• A wide range of leisure facilities, onsite restaurants and a health spa
• Personalized services on par with those of an exclusive resort including concierge service, daily housekeeping, personal shopping and stocking of the residence, hotel room service etc.
• A quality management team with experience in providing five star service and the infrastructure to support it

BUY ONLY WHAT YOU WILL USE

Fractional Ownership is gaining an increasingly high profile as some of the biggest names in entertainment, sport and business recognize its value. Many high–net–worth individuals have concluded that owning very expensive but rarely used assets is a waste of money. They are buying an eighth of a private jet, 60 days of driving a top–of–the–line Ferrari, four weeks' vacation – spread between a villa in Cabo San Lucas and a ski property in Colorado – or an interest in a luxury yacht. Fractional Ownership offers variety together with the solidarity of an equity investment.

TREMENDOUS APPEAL TO THE AFFLUENT

In the real estate sector in particular, up–market fractional interest products have enjoyed steady, robust growth since their introduction in the late 1990s. In 1996, there were only six global–standard projects in this category, but by the end of 2006 there were over 200. Proof positive of their popularity and immense appeal to astute buyers who are able to couple leisure and investment.

FORMAL VERSUS INFORMAL SHARED OWNERSHIP

Buying property with friends, relatives or business partners is not a new concept and has been commonplace since second residences or vacation residences became fashionable in the 1960s. While sharing costs of an underutilized asset makes financial sense, informal private shared ownership has many drawbacks. Friendships have floundered over arguments about nearly everything to do with a shared property, from décor and maintenance to conflicts about how long each person gets to use the property and when. The result is that many people have avoided sharing a house and even the really wealthy question the expenditure involved in buying a vacation property outright.

Today, three major realities are driving the move to formalized shared ownership in vacation properties.

• Well thought out and executed ownership documents have created simple and equitable use plans that make fractional ownership virtually hassle free.
• Property in desirable locations, where prime land is scarce, is increasingly expensive. Prices for second residences are out-pacing increases in discretionary income for the great majority of people.
• Private Residence Clubs, at the top end of the fractional ownership market, are offering luxury and quality that holds its own against resort accommodations anywhere in the world.

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