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Imagine: a time-share for rock stars. At the new Setai Resort & Residences on South Beach, Lenny Kravitz is laying down tracks in his recording studio on the seventh floor. Sheryl Crow and her cycling sweetheart Lance Armstrong are sunning next to the infinity pool. Down at the spa, Janet Jackson's bathrobe malfunction is causing a ruckus. This is definitely not your grandmother's time-share on Myrtle Beach.
The Setai, a landmark Art Deco property with an adjacent 40-story tower managed by Amanresorts founder Adrian Zecha, has been transformed into a combination condo-hotel. It's one of the biggest trends in the travel business. When unoccupied, 50 tower residences (which went for $1 million to $12 million and were decorated by Jean-Michel Gathy, who created the looks for Amanwana and Aman-i-Khas) will be turned over to management for its high-end rental pool. Beyond that, private club membership will provide VIP access to Aman properties worldwide. It's no wonder that every apartment in this Modernist Miami-meets-Shanghai palace was sold out to celebrities (and mere millionaires) before the doors even opened last December.
Back in the sixties, when some genius first decided to sell blocks of time rather than bricks and mortar, fractional vacation ownership had some cheesy undertones, with promotional bus trips and sales pitches involving Ginsu knife sets and steam-tray buffets. Lately, however, the concept has morphed into a broader spectrum, with condo hotels, resort residences, fractional real estate properties, and vacation-ownership clubs—all of which evoke a very different image. And in a mind-boggling process of segmentation, new variations on the theme are cropping up everywhere from Palm Beach to Palo Alto to Telluride.
Even before breaking ground, the MGM Grand sold all 576 furnished apartments (with price tags of up to $1.5 million) in the first of three projected condo-hotel towers on its 116-acre Las Vegas campus. Gated-community developers are partnering with Four Seasons and Ritz-Carlton on projects in resort destinations. By 2006, Canyon Ranch and Miraval will expand their wellness empires with holistic-living communities in Miami Beach and Maui, respectively. Ian Schrager is getting in on the act at his latest New York hotel, the Gramercy Park, with a connected residential component of 23 apartments designed by London-based architect John Pawson. And AOL cofounder Steve Case has just acquired a majority stake in Exclusive Resorts, a members-only vacation-home company.
So what's the appeal? For a start, baby boomers are thinking about retirement homes, while boomers' children are looking for their second homes. Neither age group appears to have enough time or interest to manage real estate. When you factor the use you might get out of a weekend residence against the aggravations of ownership, it's easy to see why some people favor this kind of part-time tenure. Setai developer Jonathan Breene explains: "Having the fridge stocked in advance or clothes cleaned and stored by someone else is incredibly alluring for overscheduled individuals. Today, people want everything done for them." Services have reached a new level, from private chefs to 24-hour butlers. Concierges can also arrange jet or yacht charters and snag elusive restaurant reservations.
Then there's the social dynamic. Having weathered parody and counter-culture disparagement, the notion of a country-club community still endures. Deep down in his DNA, Homo sapiens likes to cluster, especially while improving a golf handicap or tasting wine. But these new clubs don't require an Ivy League degree and an ancestor who was on the Mayflower for membership; a hefty down payment is the only requirement. Auberge Resorts—whose Esperanza project in Los Cabos, Mexico, is nearly sold out—also has Calistoga Ranch, a fractional real estate club in Napa Valley consisting of 27 lodges. Buyers pay $710,000 to become equity owners and rub shoulders with noteworthy local winemakers. "Napa is a place where you can take your foot off the pedal," says Mark Harmon, Auberge's president. "The only thing you have to worry about is when you can get back here again."
Anyone who has recently suffered a comprehensive pat down by a TSA agent at the airport knows that the definitions of ordinary travel have changed dramatically in these post-9/11 times. This is being employed as a subtle sales pitch by off-the-beaten-path developers. Peter Forsch, responsible for the Little Nell in Aspen and the Four Seasons Jackson Hole, is currently promoting Spanish Peaks, a 3,500-acre private club-second home community in Montana, with fly-fishing streams, championship golf, and its own high-speed lifts to Big Sky slopes. "When 9/11 happened, we had an uptick of buyers from urban areas," Forsch says, "because this is a safe haven. Let's put it this way: there's no Al Qaeda in Montana." A pristine wilderness setting with high-speed Internet access and other luxury trimmings also happens to have great appeal for those who don't care to jostle for a pool cabana at 1,000-room resorts and who want to know who their neighbors are.
Another key to the burgeoning of the mixed-use sector is a phenomenon known as "togethering," a term coined to describe multihousehold travel, whether it involves a family gathering or a getaway with close buddies. Even top hotels can lack satisfactory accommodations for travelers who demand additional space for nannies and rambunctious teens, heightened privacy, or other special services.
Given a choice between cramming a clan into several suites or spreading out in a multiple-bedroom villa with a private pool and the same amenities available to hotel guests, there are those who can rationalize forking over big money for the sake of more memorable reunions. At least, that's what Brent and Brad Handler were hoping when they established Exclusive Resorts in 2002. "My brother and I traveled together often with our families," Brent says, "but we started to recognize the frustration of doing so as our children grew up and everyone needed more space." The result is a real estate club designed to eliminate both the burdens of owning additional properties and the uncertainties of villa rental. "Renting a villa is like borrowing somebody's car," Brent remarks. "You never know what you're going to find in the glove compartment."
Club membership is also calculated to make high-end real estate more accessible, much as mortgages once made home ownership affordable to a larger segment of the public. Admission to Exclusive Resorts includes a one-time fee of $375,000 (80 percent refundable upon resignation) plus annual dues starting at $15,000. Unless you're good at deconstructing amortization tables or adding up all those à la carte services on a presidential suite, that sounds like a huge payout for 30 days of vacation a year. But Exclusive provides access to houses with an average value of $2.5 million, and 20 percent down on a $2.5 million property is quite a bit higher than the club's membership fee.
