John Long is a Managing Director and co-founder of Equity Residences. Currently, Equity Residences has two funds -- the Equity Villa Fund and Equity Platinum Fund. I recently spoke to John about Equity Residences, its growth in 2016 and plans for 2017.
What makes Equity Residences unique?
Equity Residences prides itself on creating luxury real estate investment funds, including our latest Equity Platinum Fund, that provide low-risk capital growth through real estate appreciation, generate significant rental revenues that are used to offset annual operating costs, and deliver amazing rent-free vacations to our investors. We knew from the outset that investor vacations would be a valuable component of the funds. However, even we were surprised to discover that one of our investors enjoyed $250,000 worth of Fund vacations in only 18 months.
What are some Equity Residences highlights of the past year?
Our Equity Villa Fund was fully subscribed by 100 investors in March. To date, this Fund has achieved a 40% increase in asset value. It has a 10-year life during which our investors enjoy the Fund residences and/or benefit from rental income as the properties appreciate in value. At the end of the 10-year hold the Fund will sell the residences and distribute the proceeds to investors.
Our latest Equity Platinum Fund has been well received and is currently raising $50 million to buy 20 or more luxury residences for the portfolio, each valued between $1.5 million and $4.0 million. The Platinum Fund has already created appreciation for investors by sourcing, negotiating and acquiring magnificent residences at prices below market values. Our new Lake Tahoe property is truly magnificent and raises the bar for a luxury ski-in ski-out experience at Northstar. The Equity Residences’ vacation experience is enhanced by private amenity privileges and personalized concierge services; for example, at Lake Tahoe, our guests have access to a private on-mountain leisure club that provides access to a pool, spa, gym, game room, bar, and personal concierge.
What types of concierge services are available to your investors?
Our concierge services are highly personalized and comprehensive. For example, our concierge in Lake Tahoe arranges chefs and nannies, and any kind or level of private hiking, boating or ski experiences complete with gourmet lunches and private wines tastings. She coordinates with a ski butler service to have rental equipment delivered to the Platinum Fund home upon arrival and returned after departure
A weekend birthday adventure she curated for one couple included a mountain sunset champagne tour, dinner prepared by a private interactive chef, husband-wife massages, and yoga. Prior to the couple’s arrival, the entire home was elaborately and tastefully decorated.
How would you characterize your investors?
Our Equity Platinum Fund investors recognize not only the financial wisdom of “buying right” but also the lifestyle rewards and monetary value of diverse, world-class, rent-free vacations. It’s gratifying that Platinum Fund investors include not only accomplished professionals, such as lawyers, doctors and business executives, but also savvy investment professionals seeking to diversify their portfolios with a smart and personally rewarding investment.
What is the main reason cited for making the investment?
Most of our investors have researched the various options out there and continuously tell us we have the best model in the industry. Our investors were either considering Destination Clubs, like Inspirato, or buying their own vacation home for personal use. In either case, our model is superior on both the investment return and vacation enjoyment spectrums.
Another testament to our investment model is that many of our early Equity Platinum Fund investors were Equity Villa Fund investors that have had such great success with their first investment they decided to make a follow-on investment in our second Fund. Not only have we received follow-on investments from our Equity Villa Fund investors, but we are also converting Exclusive Resorts investors over to our family of investment funds. This is the market telling us we are doing something right.
What are your future plans for your investment funds?
The Equity Villa Fund is closed to new investors, however, we are in the process of adding another residence which we expect to announce at the end of the year. The Equity Platinum Fund has been well received and continues to accept new investors. The Platinum Fund will be adding several new residences in locations such as Rosemary Beach Florida, Playa del Carmen Mexico, Los Cabos Mexico, the Bahamas and Punta Cana in the Dominican Republic.