The Latest in Luxury Resort & Real Estate News

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Urban Land Institute Resort Development Conference '09: New Ideas, New Hope

(ORLANDO, FL) - Approximately 150-200 of the world's leading resort developers, operators, architects and industry experts gathered here this week at the Urban Land Institute's annual resort development conference, trying to make sense of the global economy and the future of travel and resort real estate.

After two days of panels and presentations from a conference titled, "Developing Resort Communities: Finding Your New Frontiers," one thing is clear. So long as the capital and credit markets remain frozen, new resort development and sales will continue to be slow in coming.

However, many of the attendees agree that the value proposition of vacation ownership has lasting value and will eventually regain its footing. However, there is clearly a distinct consumer shift in how these wholly owned or shared ownership residences are being purchased.

For example, Stephen Dering of Destination Club Partners, who helped create the first private residence club at Deer Valley Resort in Park City, Utah, said in the past about 70 percent of the fractional ownership customers would pay cash for their share of a multi-million home. Now, with many high-net worth individuals holding onto to their dwindling cash reserves and longer able to tap into dried up home equity lines, the majority of customers are asking for or need financing to do the deal.

"What we're doing for the developers that are strong is basically getting them to carry the paper," says Dering, who is scheduled to open a new private residence club in Bermuda called the Reefs Club. "So we've got developer financing in place at a couple projects. It typically would be a 6.75 percent rate with a 15-year amortization and a 2-year balloon.

"So the developer's going to give people two years to let things settle down, and let the financing come back in, which it will. Historically high-end fractional have a one percent default rate which is better than primary ownership. So it's great paper."

Another distinct shift being felt by many developers and resort owners is a declining interest in full golf and country club memberships.

"The whole notion of golf is changing," said attorney Dennis Hillier, who specializes in club membership programs for Greenberg Traurig LLP out of Boca Raton, Fla. "We're finding that 75-80 percent of our buyers want sports memberships today and only 25 percent wan that full golf membership.  Ten years ago, our clients would be selling 70 percent full golf memberships. The national average in 1999 was 35 percent full golf; now it's 15 percent."

On the subject of timeshares, Marriott Vacation Club International executive Lani Kane-Hanan said her industry has a bright future, despite credit constraints that have significantly crippled just about the entire industry.

"We've downsized slightly, but all told, we'll still sell in '09 approximately $1 billion (in timeshare and fractional ownership business)," Kane-Hanan said. "That's far from being dead."

Dering, whose Chicago-based firm has helped develop dozens of residence clubs and fractional ownership properties around the world, remains bullish long-term on his industry niche.

"Historically, affluent households could justify stretching and financing to buy that $2 million vacation home because they thought they were going to sell it for $3 million in five years," Dering told the Real Estate Channel. "People, that's not going to happen now. Research has shown next to a college education for your kids the number one big-ticket discretionary purchase is a vacation home. Americans are always going to want to vacation. Whether they decide to buy one now or five years from now, we're the rational alternative.

"What I took away from this year's ULI conference is there's other people who have nothing to do with our business, and they're saying our business is the future in resort real estate. ... It's going to be painful for us like everyone else. But I think we're going to be the big beneficiaries in the resort segment.

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Golf Legend Arnold Palmer Sees Growth in Latin and Central America; Loves British Golf Courses

(ORLANDO, FL) - One of the highlights of this year's ULI conference held at ChampionsGate Resort was the guest appearance of legendary golfer Arnold Palmer. Palmer, who owns and operates nearby Bay Hill Club and Lodge, spoke about the future of golf course architecture and maintenance, golf equipment and its effects and the general future of the game itself.

Before a packed house, one thing Palmer wasn't going to discuss was the state of the downtrodden economy, saying with a smile, "It's so far down, we can't bring it back today anyway."

He did delight the crowd in saying the game of golf "is not going to disappear."

He added: "It's going to grow. Why? I will go out on a limb that it will become more popular worldwide than ever before. And if it becomes a part of the Olympics, governments will start spending more money on it and young people are going to start playing more golf."

When asked by the Real Estate Channel where his favorite places were to visit, outside of Bay Hill, his other home club in Latrobe, Pa., and Pebble Beach, which he helped buy alongside a celebrate group of investors that included Clint Eastwood and Peter Ueberroth, Palmer's attention went overseas.

"Where would I go personally to go play golf," he asked. "I would say Tralee in Ireland. The K Club in Ireland. Or I could say St. Andrews or Muirfield (in Scotland). Those are places I thoroughly enjoy with my friends.

"For the home development type, I think Pinehurst is one of the really great spots. If you've ever golfed there, you can play there for a long time and never play the same golf course."

Besides his fame as a player, Palmer's also become one of the most celebrated golf course architects, with his namesake Arnold Palmer Design Company creating more than 300 courses around the world. When asked where the future of golf and resort development was, he likes Central and Latin America for starters.

"I just had some people come back from Costa Rica and they couldn't say enough about the golf and vacation they had there," Palmer said. "And how beautiful it was. We're going to see more of that. More development in places like Brazil in Sao Paulo and Rio.  We're going to see things that started many many years ago starting to develop again.

"Right now with financial world it's not going to be an overwhelming rapid thing that we're going to see but we're going to see more (future development) in Central America whether it be Panama or Costa Rica. The seasonal type of places are the ones that are going to be very impressive."

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Gansevoort Turks & Caicos Resort Property Scheduled for April Opening

(GRACE DAY BEACH, TURKS & CAICOS) - The Gansevoort Turks & Caicos, A Wymara Resort, a 52-unit resort-style development, is scheduled to open next month. Anchoring the western section of Grace Bay Beach on Providenciales, Gansevoort Turks & Caicos, is the newest extension of the Gansevoort brand beyond the flagship Hotel Gansevoort in Manhattan and Gansevoort South Hotel, Spa and Residences in South Beach.

As the newest luxury property in the area, the resort and exclusive residences offer a signature approach to luxury lifestyle that encompasses "everything under one roof,"  according to the resort. The residences at Gansevoort Turks & Caicos come in  various configurations and each will feature private terraces that look out to sweeping ocean views.

The residences are centered around its signature pool. The 7,000 square foot infinity-edge swimming pool features "lounging islands" which appear to float on the water and serve as both sunning platforms during day and intimate, candle-lit dining areas at night.

Other amenities call for an Exhale Spa, which is opening its first island location at Gansevoort Turks & Caicos. Along with a fully-equipped fitness center, the spa will offer a number of classes and treatments in its beachfront Pavilion. The One Group's Bagatelle restaurant and Bagatelle beach will be the resort's restaurant and beach lounge, offering gourmet dining and a vibrant lounge scene, similar to that of Bagatelle in NYC's Meatpacking District.

The 52 residences will be wholly owned and owners will be able to place them into the hotel rental program.  Residences start from $485,000 and include junior suites all the way up to penthouses.

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