Sunday, October 02, 2022

Private Residence Club View

Owners of luxury fractional property buy a share of a single residence, that provides them with a couple of weeks to thirteen weeks of usage a year. The ownership period varies by development and can be expressed as a fraction (eg 1/10, 1/8, or ¼) or as a number of weeks (eg 5, 6 or 12 weeks).

Private Residence Clubs are the upper tier of the luxury fractional market, providing all the services of a five star hotel together with the ownership.

There are hundreds of fractional and Private Residence Club developments located in city, beach, mountain and resort destinations. Use our home directory to search through these locations.

They are sometimes compared to timeshares, although there are several key differences. For instance luxury fractionals are in better locations, are more luxurious and typically larger, providing 2, 3 or 4+ bedrooms. They also offer true, deeded ownership whereas timeshares usually just offer a "right to use."

This article covers the reasons people buy fractionals and PRCs, and if you're looking to buy read the list of questions to ask before buying your fractional. For easy reference there is a glossary of terms.

The latest news and research on luxury fractionals and Private Residence Clubs is available below.


Last year, we introduced readers to Pacaso, a newcomer to the second home ownership market. The company offers shared fractional ownership of very nice second homes. It is an alternative to residence clubs or destination clubs and hopes to make owning a second home more accessible to people. Now, SherpaReport takes a look at recent news and developments.

Fractional ownership and co-ownership of luxury vacation homes has been evolving over the last few decades. This article recaps the evolution and history of this space and provides an overview of some of the newer players and some of the older more established entities.

An experienced development team is building a solar-powered, private-island community - Ki’ama Bahamas - just minutes by water taxi from George Town, Exuma. This will be the world's first equity club to offer ownership in sustainable, luxurious oceanfront homes and carbon neutral solar yachts.

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. 

As many have known and experienced, the idea of property sharing has been around for a while – timeshare started in the early 1960s in France and Switzerland; it came to the United States, and evolved into the fractional idea – with the Deer Valley Club in Park City, Utah in the 1980’s. From there, the model became the basis for the higher end private residence club, then the destination club, both equity, non-equity, and hybrid. But, due to many issues - some fiscal, some philosophical - some have passed into Real Estate history.

Yet one idea has maintained itself over some years, and that is the idea of fractional or co-ownership. There are a few companies that use this sharing model, and those that use this exemplar, from residences to private jets to yachts, are alive and well.

One of the newest co-ownership residence models is Kocomo, founded in Mexico City in 2021. It has already raised $56 million in financing to advance their unique co-ownership model.

Once again, from the darkness of the pandemic, a new real estate idea has emerged: the first wellness residence club. To be sure, there have been other residence clubs, and branded residences with wellness components, but this is the first co-ownership residence club whose past history and immediate present deal with the promulgation of healing and wellness.

Since 2004, Elite Alliance has been operating a luxury exchange program, allowing owners of private residence clubs to swap time at their various locations. The company has gone on to other projects within the real estate and hospitality industry, including their recent launch of a series of private residence clubs. SherpaReport spoke with them recently about these new clubs.

Pacaso has only been in operation a little over a year, but the newcomer to the second home ownership market has already made quite a splash. The company offers an alternative to other shared ownership options and aims to make owning a second home available to a larger audience. SherpaReport caught up with Pacaso CEO and co-founder, Austin Allison, to learn more.

The annual survey of private residence clubs and fractional real estate interests from Ragatz Associates shows total sales of about $179m in 2020. This amount includes new closed sales, presales, and inhouse resales. 

The survey of private residence clubs and fractional real estate interests from Ragatz Associates, shows total sales of $198m in 2019. This is the highest sales volume in 3 years, with a 3-year increase of 13.1%. It is the first year when the survey has excluded destination clubs