Fractional Ownership

Los Cabos Magazine – Issue #9 Article

by Sabrina Lear

    Fractional ownership . . . you may have heard the term but what does it imply? Usually offered in the form of a Private Residence Club, fractional ownership is title to real property, making it possible to own part of a vacation residence without worrying about maintenance, taxes, or property management. While fractional ownership is not new—individuals have purchased property jointly for years—the added comfort of Private Residence Club amenities, services, and luxurious turnkey accommodations takes fractional ownership to a new level.

    Many fractional ownership purchasers could easily afford full ownership, but choose a Private Residence Club (PRC) for the lavish amenities and the limited time they have to spend at their vacation home. The added value is very appealing, especially when compared with timeshare vacation clubs or full ownership. Timeshare, no matter how luxurious, is a usage contract; and full ownership comes with full responsibility, including maintenance—often a headache for owners thousands of miles away.

    Fueling the growth of this active slice of the vacation home market is the fact that fractional ownership requires far less capital investment. Located in world-class resort destinations like Aspen, Whistler, and Miami Beach, fractional prices average $50,000 to $500,000 U.S. for residences that would generally cost two to five times more if purchased individually, without club amenities and benefits. Because it is deeded ownership, you have a real asset, one you can will to your heirs, sell, rent, or mortgage. You select the amount of time you plan to spend at your vacation residence and pay only for that time period.

    In Los Cabos, where unfurnished oceanfront condominium prices can be upwards of $300,000 U.S., Private Residence Clubs are taking hold. And, with less than 100 properties world wide, they are highly coveted. According to market research group Ragatz Associates, 26 percent of PRCs are sold out, with sales of close to $450 million U.S. in 2001 alone. New developments have shot up 150 percent.

    So, what does Los Cabos have in the way of fractional ownership and Private Residence Clubs? While the concept is still relatively new to the area, there are a handful of properties, each uniquely appealing. All offer the opportunity to own a percentage of a high-end vacation home; some have the option of full ownership for those considering full or part-time residency in Los Cabos. 

    Other resorts throughout Los Cabos with fractional ownership include the 36 two and three-bedroom Auberge Residences at Esperanza at Punta Ballena, near Cabo San Lucas. Adjacent to the exclusive Esperanza hotel, owners enjoy superb facilities and Private Residence Club services including pre-arrival shopping, housekeeping, VIP airport transportation, and personal year-round storage. Prices range from $150,000 to $2.5 million U.S.

    Under construction on Playa El Mèdano in Cabo San Lucas, the Mexican-Mediterranean style 214-suite Mèdano Beach Resort broke ground in March 2004 with 35 suites scheduled for completion in the spring of 2005. Fractional ownership will be offered on fully furnished one, two and three bedroom suites and penthouses with Private Residence Club hotel amenities and services.

    Pioneering the fractional trend in Los Cabos, Villa La Estancia is a large luxury development on the East Side of Playa El Mèdano. Priced from $175,000 to $800,000 U.S., fractional ownership is offered in two and three bedroom condominiums with five star resort amenities and services. Construction is under way on Pueblo Bonito’s oceanfront Cabo Pacifica, with fractional and full ownership villas, next door to their Sunset Beach hotel property north of Cabo San Lucas near El Faro Viejo.

    Not attached to a resort, Las Gardenias is a residential fractional alternative on the Robert Trent Jones II Golf Course at master-planned Cabo Real. An attractive, well maintained two and three bedroom condominium community, at Las Gardenias a fully furnished two bedroom runs from $66,000 to $72,000 U.S. per one-sixth share—eight weeks are allocated in four two-week periods through the year. Las Gardenias does not have Private Residence Club services or amenities, but there is a lovely pool and tennis courts.

    The emphasis on building Private Residence Clubs in only the most desirable locations worldwide has created strong demand, with excellent appreciation and resale value. The popularity of this new phenomenon in Los Cabos shows little sign of abating, giving vacation home purchasers more flexibility, amenities and services than were previously available in Mèxico’s most exclusive resort destination.
At El Zalate Condominiums, a mile southwest of San Josè del Cabo on Costa Azul Beach, Club Perla Rosa’s Private Residence Club combines the intimacy of an exclusive private residential retreat with the conveniences of a five-star hotel.

    “Our Private Residence Club is for those who don’t want the impersonal atmosphere of a hotel, and yet desire carefree living during their valuable vacation time,” explains Michael Novak, Club Perla Rosa’s VP of Sales and Marketing. “From the outset, our mission statement has been more, better, different. More value. Better quality. And, a decidedly different commitment to personal satisfaction,” Novak adds..

    Club Perla Rosa’s amenities include on-line and on-site full concierge ser-vices with VIP round trip airport transportation; pre-arrival shopping; maid service; private year-round storage; a 24-hour reception area and owners— lounge; a spacious pool and Jacuzzi with showers and changing areas; European day spa and fitness center; gourmet market; and a medical center with pharmacy, 24-hour emergency care, and English-speaking doctors who make house calls.

    Lavishly appointed with two bedrooms and two baths, Club Perla Rosa residences are available on six floors, including a dazzling three-bedroom and den ocean view penthouse with vaulted ceilings. The contemporary interiors are subtle yet stunning with gourmet kitchens, custom-designed solid alderwood furnishings, classic Indonesian rattan, and hand-wrought exquisite craftsmanship. Wall mounted plasma televisions, Bose surround sound stereo systems and original art complete the upwards of $100,000 U.S. invested in luxury furnishings and fittings in each residence..

    Four to six weeks per year of fractional ownership at Club Perla Rosa starts at $49,900 U.S. Ownership is’t limited; investors may purchase as many fractions as they wish. Club Perla Rosa will appeal to those looking for sterling amenities and services in a gracious and relaxing fully equipped luxury condominium setting.

    The Grand Regina Los Cabos, on a stunning site next to the Westin Regina Resort in the Tourist Corridor, broke ground in June 2004. Designed by Idea Asociados, Proyectistas Asociados, and WAT&G, completion of 32 Private Residence Club villas is slated for early 2006. Fractional ownership in the 20 1,840-square foot, two-bedroom and 12 2,388-square foot, three-bedroom villas starts at $92,000 U.S. Sixty-four more two-bedroom villas with optional PRC services begin at $50,000 U.S. Full ownership is available in both programs. A Raintree Resorts International development, all owners have Raintree Vacation Club (RVC) privileges worldwide. PRC owners— privileges extend to Luxury Collection properties.

    A three-bedroom PRC model villa showcases superb craftsmanship and materials. The open floor plan highlights the oceanfront resort’s exceptional views. Teak plank flooring, solid alderwood cabinetry, and granite counters and tabletops complement an off-white monochromatic dèor. Spacious baths have separate showers and tubs, with designer kitchens facing the living and dining areas. A splash pool graces each main terrace. The feel is minimalist yet rich, taking contemporary Mexican design to an opulent level. Apart from construction costs, $6 million U.S. will be invested in villa furnishings.

    “We wanted the villas to be comfortable and soothing, yet refined,” notes Grand Regina Marketing Representative Claudia Velo.” And response to the resort has been tremendous. Pre-construction sales have reached $20 million U.S. in the last twelve months alone, with over 30 percent of the villas sold as of June of 2004.”

    Grand Regina Los Cabos amenities have everything one would expect at a five star resort. PRC privileges include VIP round trip airport transportation; valet parking; pre-arrival shopping; daily maid service; private year-round storage; and their own spectacular pool. Representing an investment of over $40 million U.S., Grand Regina is the fastest selling fractional ownership property in North America.

    Other resorts throughout Los Cabos with fractional ownership include the 36 two and three-bedroom Auberge Residences at Esperanza at Punta Ballena, near Cabo San Lucas. Adjacent to the exclusive Esperanza hotel, owners enjoy superb facilities and Private Residence Club services including pre-arrival shopping, housekeeping, VIP airport transportation, and personal year-round storage. Prices range from $150,000 to $2.5 million U.S.

    Under construction on Playa El Mèdano in Cabo San Lucas, the Mexican-Mediterranean style 214-suite Mèdano Beach Resort broke ground in March 2004 with 35 suites scheduled for completion in the spring of 2005. Fractional ownership will be offered on fully furnished one, two and three bedroom suites and penthouses with Private Residence Club hotel amenities and services.

    Pioneering the fractional trend in Los Cabos, Villa La Estancia is a large luxury development on the East Side of Playa El Mèdano. Priced from $175,000 to $800,000 U.S., fractional ownership is offered in two and three bedroom condominiums with five star resort amenities and services. Construction is under way on Pueblo Bonito’s oceanfront Cabo Pacifica, with fractional and full ownership villas, next door to their Sunset Beach hotel property north of Cabo San Lucas near El Faro Viejo.

    Not attached to a resort, Las Gardenias is a residential fractional alternative on the Robert Trent Jones II Golf Course at master-planned Cabo Real. An attractive, well maintained two and three bedroom condominium community, at Las Gardenias a fully furnished two bedroom runs from $66,000 to $72,000 U.S. per one-sixth share—eight weeks are allocated in four two-week periods through the year. Las Gardenias does not have Private Residence Club services or amenities, but there is a lovely pool and tennis courts.

    The emphasis on building Private Residence Clubs in only the most desirable locations worldwide has created strong demand, with excellent appreciation and resale value. The popularity of this new phenomenon in Los Cabos shows little sign of abating, giving vacation home purchasers more flexibility, amenities and services than were previously available in Mexico’s most exclusive resort destination.