The annual survey of private residence clubs and fractional real estate interests from Ragatz Associates shows total sales of about $255m in 2021. This amount includes new closed sales, presales, and in-house resales at fractional resorts and developments. 

The breakdown of these 2021 North American sales is shown in the table below:

    Fractional Interests $31m
    Private Residence Clubs $224m

In the table above, Ragatz Associates simply assumes that product selling for less than $1,000 per square foot falls into the fractional interest category, and product selling for more than $1,000 per square foot falls into the private residence club category.

The total sales number of $255m is the highest level in 8 years, and is 42.5% above the 2020 numbers. The highest sales of $1,687m were back in 2007. 

To calculate these numbers, Ragatz reached out to 328 fractional interest projects and private residence clubs (prc). Of the 328 developments only 34 actually made some sales in 2021. Most of the inactive developments are older, sold-out fractional interest projects. Of the 34 active developments, 15 are fractional interest projects (product selling for less than $1,000 per square foot) and 19 are private residence clubs (product selling for more than $1,000 per square foot ).

Ragatz notes that "In 2021, the average annual sales volume in the 34 active projects was $2.1 million for fractional interest projects and $11.8 million for private residence clubs." As in other recent years there were a few (five in 2021) private residence clubs that made much larger sales than the others, and if these are excluded the average for the other 14 drops to $5.9m. In other words, the five large projects averaged sales of almost $28m each in 2021.

The most common share size in the fractionals is 1/5th to 1/8th (6 to 10 weeks of ownership) and for the prcs is 1/8th to 1/10th (so about 5 to 6 weeks of use each year). The most common configuration, 65% of the units, is 2- and 3- bedrooms with an average unit size of 1,945 square feet and the average shared-ownership project will contain 28 units.

Prices vary widely between projects. For fractional interest projects the average prices are $203,500 per share, equivalent to $25,200 per week and $500 per square foot. For private residence clubs, these averages are $352,150 per share, $66,500 per week, and $1,750 per square foot. Annual maintenance fees average $10,475 per share, ranging from $8,525 among fractional interest projects to $12,050 among private residence clubs.

The full report, with more detailed analysis, is available at the Ragatz Associates website for $500.

Note, the Ragatz Report covers resort type developments with multiple fractional units. It does not cover the various forms of shared ownership of standalone single family homes. The latter include residence funds, like Equity Residences and Destination M, that buy and share multiple homes amongst owners, and newer programs, like Pacaso and Kocomo that enable sharing of individual homes.

 

Partner Message

NBAA BACE 2022 - Business Aviation Conference