Timeshare's upscale cousin arrives in Edgartown
With fixer-uppers priced at $500,000 and luxury waterfront estates topping out around $25 million, it is no wonder resort developer and part-time Island resident Russell Urban and his company, ULF Edgartown LLC, decided to introduce a new real estate concept to Martha's Vineyard: fractional ownership.
After seven months of construction, Edgartown Residence Club is about to officially open its doors to residents. On the Colonial Inn site at 38 North Water Street in downtown Edgartown, the Edgartown Residence Club offers six one- and two-bedroom condominium-type units for sale on a fractional basis.
"People want a carefree, uncomplicated way to own a second home," Mr. Urban explained. "With fractional ownership, you pay only for what you will use - as opposed to owning a vacation home and carrying the costs year-round when you may be there for only a month or two annually."
Photo by Sara Piazza
Simply put, fractional ownership allows you to own a slice of a particular piece of real estate, giving access to a home for from four weeks to several months a year. Like timeshares, fractionals often let you rent or swap your share for use of another property in another part of the world. Unlike many timeshares, however, fractionals provide deeded ownership (you can pass your share of the property on to heirs), and they come with a long list of luxury amenities.
According to Director of Sales and Residence Club Manager Joanne Sardini, prices range from $90,000 to $290,000 depending upon size and desirability of the unit, as well as which fraction of the year is purchased. There are only 12 owners per unit, and owners buy at least four weeks of usage per year. Unbooked time can be added on a space-available basis. Owners also pay monthly fees of $290 for a one-bedroom residence and $450 for a two-bedroom residence. Fees cover real estate taxes, use of an automobile during occupancy, telephone, utilities, staff, and transportation to and from the ferry and airport.
The six new luxury residences were created from an existing wing of the Colonial Inn that formerly housed 15 traditional hotel rooms. "We ripped out the front courtyard, jacked the building up for new mechanicals and storage, gutted the interior, and added new walls, flooring, mechanical systems, roof, and shingles," said C.J. Rivard, managing director for the Colonial Inn and the Edgartown Residence Club. "We also added a club room for residents. The new units are on the second, third, and fourth floors with the top floor offering the most dramatic harbor views."
The Colonial Inn, also owned by Mr. Urban's company, was built in 1911; the wing recently converted to the Residence Club was added in 1932. The main building offers 28 guest rooms, a day spa/salon, fitness room, retail shops, and Chesca's restaurant, open for dinner nightly on a seasonal basis. The Inn's amenities are also available to owners of the Residence Club units.
Mr. Urban, Ms. Sardini, and Ms. Rivard are quick to point out that the fractional concept has become a reputable, mainstream form of real estate ownership, spearheaded by resort industry heavy hitters such as the Ritz-Carlton, Marriott International, Hilton Hotels, and the Four Seasons Hotels. The top-end hotel developers have entered the fractional market largely because the number of recreational second homes has risen by approximately 25 percent since 1989, to 5.1 million, according to the National Association of Realtors. Sales of vacation homes rose almost 20 percent in 2004, to 1.02 million from 850,000 in 2003.
Fractional ownership, Mr. Urban asserts, lowers the cost of owning a luxury property in a high-end resort and eliminates the headaches of dealing with repairs from afar. The concept was popularized in the shared ownership of jet aircraft for business travel and at upscale ski resorts across the U.S. While timeshares often cost owners money at the time of resale, fractional resales have more closely paralleled local real estate prices. That's because they have historically been developed in popular resort communities where demand remains high and buying a similar property outright would be prohibitive. According to a survey by Ragatz Associates, an Oregon-based resort industry consulting firm, fractional resales are yielding 10 to 30 percent more than the original selling prices. The same company also reports that fractional resort sales have increased 45 percent over the last several years, with over 34,000 owners nationwide.
One of the most significant differences between timeshares and fractionals is that the fractional buyer is interested in returning to the same resort on a regular and frequent basis. Timeshare owners, in contrast, report that they are enticed by visiting different vacation locations.
In addition, timeshares typically lack the emphasis on luxury that the buyer finds at fractional resorts. The list of amenities at Edgartown Residence is lengthy: a key-coded building, gas fireplaces, plasma televisions, wireless internet access, use of a BMW sport utility vehicle (one per unit), a full-time concierge, pre-visit shopping, daily housekeeping, personal storage, belongings placed in residence before arrival, round-trip transportation to and from ferry or airport, Bose stereos, and more. The units are fully furnished and feature generous private balconies overlooking both the harbor and the streetscape below.
"Buyers are all over the place," Ms. Rivard reported. "There are young couples with young kids, empty nesters, retirees, former vacation home owners, you name it." Ms. Sardini concurred: "The Residence Club is a little microcosm of the Vineyard. Our buyers are from all over the U.S. and from all age ranges. It's a great mix of people. We're convinced they'll become neighbors in the true sense of the word."
Pre-opening sales are "very strong" according to Mr. Urban, with one-third of the available fractions already sold. Once the property is officially open for occupancy and for tour on August 20, he projects even brisker business.
Both rentals and resales of existing units will be handled in-house; residents will be eligible to participate in The Registry Club, a high-end fractional resort club system that facilitates exchanges with other units worldwide. He doesn't anticipate a great deal of interest, however. "People who buy at Edgartown Residence Club love the Vineyard, love our downtown location, and look forward to feeling that they've acquired a home away from home. I think they'll just keep coming back to enjoy the Island year after year."
While there are timeshare properties on the Vineyard like the Harborside Inn in Edgartown, Harbor Landing in Vineyard Haven, and the Island Inn in Oak Bluffs, the Edgartown Residence Club is, for the moment at any rate, the only resort that offers Vineyard enthusiasts the privilege of owning one-twelfth of a one- or two-bedroom home replete with luxury amenities in downtown Edgartown.
Karla Araujo is a tennis instructor and freelance writer who lives on Martha's Vineyard and Key West.