Exclusive Resorts to Boast $1 Billion in Real Estate By Year-End?
November 20, 2006 06:29 PM
Destination club industry leader Exclusive Resorts is on pace to announce a $1 billion luxury real estate portfolio by the end of 2006.
In October, Helium Report spoke with COO Michael Beindorff about the club's anticipated release of 70 new residences in the fourth quarter of this year. The destination club's total portfolio is expected to increase to 370 homes in 35 destinations worldwide.
$1 Billion Portfolio
At an average home value of $3 million each, the implied total value of the 370 resort and metropolitan residences exceeds $1 billion, a staggering figure for the still nascent destination club industry. Exclusive Resorts dominates the new luxury travel segment with more than 2,400 members.
A recent feature in Newsweek about Steve Case, Exclusive Resorts' primary investor, highlighted the buying power of the rapidly expanding destination club:
"Today [Exclusive Resorts] buys 20 or more [homes] at a time, allowing it to get discounts from builders and to spread the costs of housekeeping, maintenance and concierges over multiple properties."
An independent financial audit by a Big 4 accounting firm could verify the projected ten-figure real estate portfolio some time next year. Exclusive Resorts has a third-party firm audit its books to assure members that the club has sufficient net assets to refund member deposits.
Earlier this year, the second largest club in the industry, Tanner and Haley, filed for Chapter 11 bankruptcy protection, putting all of its 874 members on a list of unsecured creditors.
360% Annual Growth Rate
Despite the challenges faced by its competitor, Exclusive Resorts appears to have achieved more than a 360% annual growth rate over a four-year period. Newsweek reported, "[in the] spring of 2003, Exclusive Resorts had just 25 members and four homes." By next spring, the club will likely have more than 2,500 members and nearly 400 homes, implying the firm has grown close to 100X and roughly quadrupled in size every year since Steve Case bought a stake in early 2003.
The announcement of a $1 billion portfolio could further stimulate both consolidation and investment in the industry. Two mergers have already occurred this year (more here and here) and others may be in the works. In the Newsweek story, Exclusive Resorts' management alluded to the possibility that "they wouldn't be surprised if luxury-hotel players like the Four Seasons or Ritz Carlton enter the fray."
Indeed, we reported earlier today that Banyan Tree Resorts has launched a destination club based in Asia. Last month, we broke the news about Ciel, the third destination club founded by a billionaire. If Case's vision is right and Exclusive Resorts ultimately serves "tens of thousands of members," then it might not be long before the firm is announcing a ten billion dollar real estate portfolio. Good thing they just added Andre Agassi and Steffi Graf to their team.
Destination club industry leader Exclusive Resorts is on pace to announce a $1 billion luxury real estate portfolio by the end of 2006.
In October, Helium Report spoke with COO Michael Beindorff about the club's anticipated release of 70 new residences in the fourth quarter of this year. The destination club's total portfolio is expected to increase to 370 homes in 35 destinations worldwide.
$1 Billion Portfolio
At an average home value of $3 million each, the implied total value of the 370 resort and metropolitan residences exceeds $1 billion, a staggering figure for the still nascent destination club industry. Exclusive Resorts dominates the new luxury travel segment with more than 2,400 members.
A recent feature in Newsweek about Steve Case, Exclusive Resorts' primary investor, highlighted the buying power of the rapidly expanding destination club:
"Today [Exclusive Resorts] buys 20 or more [homes] at a time, allowing it to get discounts from builders and to spread the costs of housekeeping, maintenance and concierges over multiple properties."
An independent financial audit by a Big 4 accounting firm could verify the projected ten-figure real estate portfolio some time next year. Exclusive Resorts has a third-party firm audit its books to assure members that the club has sufficient net assets to refund member deposits.
Earlier this year, the second largest club in the industry, Tanner and Haley, filed for Chapter 11 bankruptcy protection, putting all of its 874 members on a list of unsecured creditors.
360% Annual Growth Rate
Despite the challenges faced by its competitor, Exclusive Resorts appears to have achieved more than a 360% annual growth rate over a four-year period. Newsweek reported, "[in the] spring of 2003, Exclusive Resorts had just 25 members and four homes." By next spring, the club will likely have more than 2,500 members and nearly 400 homes, implying the firm has grown close to 100X and roughly quadrupled in size every year since Steve Case bought a stake in early 2003.
The announcement of a $1 billion portfolio could further stimulate both consolidation and investment in the industry. Two mergers have already occurred this year (more here and here) and others may be in the works. In the Newsweek story, Exclusive Resorts' management alluded to the possibility that "they wouldn't be surprised if luxury-hotel players like the Four Seasons or Ritz Carlton enter the fray."
Indeed, we reported earlier today that Banyan Tree Resorts has launched a destination club based in Asia. Last month, we broke the news about Ciel, the third destination club founded by a billionaire. If Case's vision is right and Exclusive Resorts ultimately serves "tens of thousands of members," then it might not be long before the firm is announcing a ten billion dollar real estate portfolio. Good thing they just added Andre Agassi and Steffi Graf to their team.
posted by La Punta Realty at 11:34:00 AM
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