"It starts with the quality of the homes," asserts Larry Mueller, Cuvée's managing director, "the average home investment is $6 million with values as high as $13.9 million." Its portfolio consists of beach, mountain, city and leisure homes with five-star resort amenities in popular locales such as Los Cabos, Mexico, Vail, Colo., Lana'i, Hawaii, and New York City.
For example, the Los Cabos ocean front property features a private infinity-edge pool, 2000 square feet of outdoor entertainment space and magnificent ocean views. Set within the prestigious Villas Del Mar gated community with access to the One&Only Palmilla resort, the custom, high-end interior surfaces are accented with authentic Mexican antiquities and Spanish art pieces.
The Beaver Creek, Colo., location boasts penthouse views from atop The Ritz-Carlton Bachelor Gulch. Four suite-style bedrooms accommodate guests who can enjoy walk out access to the ski lift. In addition, visitors can take full advantage of all amenities of The Ritz-Carlton including its Four Diamond Spa and Red Sky Golf Course.
Elite Investor Opportunities
Investment is reserved for certain elite investors. "The investment is $1.5 million for a full share or $750,000 for a half share," Mueller says. "The business model is set up under a private equity structure where investors own 100 percent of the real estate." In addition, to maintain exclusivity, there are only 16 investment shares offered per fund which translates to approximately four investors per property. He adds that no money is put toward advertising or commissions—all "advertising" is done by word of mouth and there are no commissions paid. And, unlike many destination clubs, there are no yearly maintenance fees.
"To pay maintenance fees and taxes, we rent the properties out to other non-investor clients under our Cuvée Escapes business arm," Mueller says. Rental rates average $6000 per night and can go as high as $10,000 per night. "Some of our rental clients include Jessica Simpson, Cameron Diaz and Peyton Manning," he attests. And, although each investor has access to the properties for 30 nights per year, the properties remain vacant for over six months out of the year to accommodate spur-of-the-moment business or leisure trips.
Cuvée properties' level of luxury is surpassed only by its six-star level of service, claims Mueller. On-site concierge hosts work personally with guests to ensure their travel experience is sublime. The Cuvée concierge hosts can arrange transportation, pre-arrival groceries, fishing charters, spa treatments, private chefs or any unique requests. Cuvée hosts know their guests birthdays, anniversaries, dining preferences and even the type of wine they prefer. "Our hosts set everything up ahead of time so the guests don't have to worry about anything and can enjoy their vacations," Mueller says.
A Cost-Effective Model
To further contain costs, Cuvée has its own on-staff designers and construction teams that renovate the purchased properties. "We rely on this staff to do a high quality of work at a fraction of the cost of outsourcing," Mueller says. Also, because Cuvée works on a cash-only investment basis and has no incurred debt, it can negotiate aggressively to obtain low purchase prices.
"Cuvée Ventures offers its investors the unique benefits of earning money while providing an incredible lifestyle," Mueller attests. "Each investor truly owns the asset and makes money off of the property's appreciation." Most properties are held for 6 to 8 years before they are sold. Any net proceeds from the property's sale are distributed among the fund's investors.
According to Mueller, the Manhattan property in Fund I, originally purchased for approximately $7 million, reached its appreciated value after only 3 years. Sold in January 2010 for $13.9 million, the property returned an 82 percent net gain for the investors. Cuvée Ventures' ultimate goal is to own 25 properties around the world for a total of 120 investors. The company is currently in the process of procuring properties in Aspen, Italy (Tuscany or the Amalfi Coast), as well as Napa Valley, Calif., Anguilla or St. Barth's.
"I named the company Cuvée because, as in winemaking, it's about proper blending," Mueller maintains. "In this case, it's blending the solid investment with the ultra-luxury lifestyle."
Other organizations with a similar residence fund (or equity destination club) structure, include Equity Estates ($3m homes), Luxus Vacation Properties ($1m homes) and Rocksure Property ($1.5m homes).