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Fractional Ownership in the Rockies
Fractional — or interval — ownership has come a long way since the “time-share” days of the 1970s and ’80s. In fact, today big names such as Hyatt, Ritz-Carlton, Sheraton, Four Seasons, Westin, Marriott, Disney, Ramada and Radisson have fractional ownership properties. Overall, the industry has seen an increase of more than 400 percent in the 1990s alone.
One reason highly respected companies have entered fractional ownership is that a high-end market has evolved over the years. “Many of these buyers can afford any type of vacation home they desire, but don’t want the headaches or expense of maintaining these homes 52 weeks a year,” says Chuck Madison of East West Partners, which has developed several such properties in Beaver Creek and Breckenridge. “This is especially true for the increasing number of people who have previously purchased multiple vacation homes and found they could not cost-justify the limited use of their homes. As well, they do not like being tied down to one single destination.”
“Our purchasers see fractional ownership as a viable alternative to traditional real estate,” Madison continues. “They are coming here for only two or three weeks a year, so they don’t want to pay $500,000 to $1 million for a traditional property. But they do want value, equity and the other benefits of second-home ownership.”
He noted that unlike early time-share properties, most of today’s fractional ownership properties offer deeded ownership complete with title policies. It’s an ownership that can be passed down through the generations in perpetuity or resold like general real estate, often through traditional brokers.
There are a growing number of high-end fractional ownership properties in the resorts served by Colorado Mountain Express and Resort Express. Among “brand” names are the Hyatt, Ritz-Carlton and Sheraton. Then there are the so-called “boutique” properties, such as the Vail Mountain Lodge & Spa and the Austria Haus in Vail Village; the Poste Montane, St. James and Park Plaza in Beaver Creek Village; and The Snowmass Club Private Residence Resort in Snowmass.
Not surprisingly, today’s purchasers also have a broader range of options for ownership. In the old days, time-shares were usually sold in one-week blocks. Now, because many purchasers regard their fractional properties as virtual second homes, options include 1/7th, 1/12th, 1/20th and a number of other ownership variations.
In Beaver Creek Village, for example, the Hyatt Mountain Lodge offers mostly 1/20th shares, St. James Place and Poste Montane offer weekly shares, and Park Plaza offers five-week shares exclusively.
In Vail Village, the creek side Vail Mountain Lodge & Spa (formerly the Vail Athletic Club) features a limited number of fractional ownership residences, each offering four-week segments (two fixed in winter, one fixed in summer, and one floating in spring or fall) with an average price of $275,000. In the case of the slope side Antlers in Vail’s Lionshead, a one-quarter share of a two-bedroom condominium costs about $220,000.
You can also buy multiple blocks at most fractional properties; that is, you can purchase more than one ownership.
In addition, you get a greater variety of floor plans — from studios and one-bedroom condominiums all the way up to freestanding and villas — and prices. However, prices depend on the season and the type of residence you get. At the Hyatt Main Street Station, prices for the remaining residences range from $20,000 to $150,000 for a 1/20th (17 days a year) share. A 1/7th interest in a Snowmass Club two-bedroom residence is currently offered at $229,000, and a three-bedroom at $349,000. Prices at The Ritz-Carlton Club, Bachelor Gulch range from $150,000 to $300,000.
In most cases, but not all, purchasers have the option of putting their ownership time in a rental pool if they are not going to be using it. It would be rented out like a hotel room to either outside guests or to other owners who have already used up their time.
Many high-end fractional ownership properties refer to themselves as “residence clubs.” In fact, such properties have become the fastest growing segment of the resort real estate market, according to the American Resort Development Association.
Club membership provides the benefits of a residence along with a bevy of hotel-style services worthy of a world-class resort. These usually include concierge service, ski valets, athletic clubs and spas, and many others. Club membership can be compared to membership in a private golf club; however, in place of tee times, the club memberships offers lodging time along with an undivided deed interest in a portion of the property itself. Some, such as the Ritz-Carlton, Bachelor Gulch and the Snowmass Club, offer golf course memberships as well. Others include ski lift packages
The success of upscale fractional ownership can be seen in sales numbers. The Hyatt Vacation Club at Beaver Creek Village sold out in half the expected time and well before its 1999 opening. The 51 fractional ownership residences of the Hyatt Main Street Station, part of a residential/retail “resort within a resort” sandwiched between the slopes and Breckenridge’s historic Main Street, have already sold more than half of their shares before opening. The Ritz-Carlton, Aspen Highlands also had brisk sales and the Ritz-Carlton, Bachelor Gulch on Beaver Creek Mountain is on its way to being sold out before its scheduled (Winter 2001) opening. Its membership sales have exceeded expectations, and are now 120 percent over plan, according to Bob Phillips, vice president of business development for The Ritz-Carlton Club.
Ownership at many fractional ownership properties also includes membership in one or more of several global vacation exchange companies, including Interval International, and Resort Condominiums International Internal. Under the terms of membership, time can be exchanged at any of the exchange company's member properties around the world.
“Club membership provides the benefits of a residence along with a bevy of hotel-style services worthy of a world-class resort.”
For example, if owners at a Beaver Creek fractional property decided one winter that a seaside vacation sounded better than a slope side vacation, they could trade their time at Beaver Creek for time at, say, a participating Hawaiian or Caribbean property.
Chuck Madison says that while fractional ownership benefits certain buyers, it also benefits the host resort. “Fractional ownership, done right, dramatically broadens the market for resort vacation home ownership. Obviously, there are only a limited number of people who can afford to own in places like Vail, Beaver Creek and Aspen, so fractional ownership broadens the demographics dramatically.”
As a result, continues Madison, the resorts get an economic shot in the arm because fractional ownership runs at about 75 percent occupancy versus the same type of condominiums that are whole ownership and run probably about 35 percent occupancy. So obviously merchants benefit significantly from that additional resort occupancy.
Don Berger is editor of Vail-Beaver Creek Magazine, Rocky Mountain Golf Magazine and is a regular contributor to numerous publications.
Fractional Ownership Is Hot!
One reason highly respected companies have entered fractional ownership is that a high-end market has evolved over the years. “Many of these buyers can afford any type of vacation home they desire, but don’t want the headaches or expense of maintaining these homes 52 weeks a year,” says Chuck Madison of East West Partners, which has developed several such properties in Beaver Creek and Breckenridge. “This is especially true for the increasing number of people who have previously purchased multiple vacation homes and found they could not cost-justify the limited use of their homes. As well, they do not like being tied down to one single destination.”
There are a growing number of high-end fractional ownership properties in the resorts served by Colorado Mountain Express and Resort Express. Among “brand” names are the Hyatt, Ritz-Carlton and Sheraton. Then there are the so-called “boutique” properties, such as the Vail Mountain Lodge & Spa and the Austria Haus in Vail Village; the Poste Montane, St. James and Park Plaza in Beaver Creek Village; and The Snowmass Club Private Residence Resort in Snowmass. 
In addition, you get a greater variety of floor plans — from studios and one-bedroom condominiums all the way up to freestanding and villas — and prices. However, prices depend on the season and the type of residence you get. At the Hyatt Main Street Station, prices for the remaining residences range from $20,000 to $150,000 for a 1/20th (17 days a year) share. A 1/7th interest in a Snowmass Club two-bedroom residence is currently offered at $229,000, and a three-bedroom at $349,000. Prices at The Ritz-Carlton Club, Bachelor Gulch range from $150,000 to $300,000. 
The success of upscale fractional ownership can be seen in sales numbers. The Hyatt Vacation Club at Beaver Creek Village sold out in half the expected time and well before its 1999 opening. The 51 fractional ownership residences of the Hyatt Main Street Station, part of a residential/retail “resort within a resort” sandwiched between the slopes and Breckenridge’s historic Main Street, have already sold more than half of their shares before opening. The Ritz-Carlton, Aspen Highlands also had brisk sales and the Ritz-Carlton, Bachelor Gulch on Beaver Creek Mountain is on its way to being sold out before its scheduled (Winter 2001) opening. Its membership sales have exceeded expectations, and are now 120 percent over plan, according to Bob Phillips, vice president of business development for The Ritz-Carlton Club. 
Chuck Madison says that while fractional ownership benefits certain buyers, it also benefits the host resort. “Fractional ownership, done right, dramatically broadens the market for resort vacation home ownership. Obviously, there are only a limited number of people who can afford to own in places like Vail, Beaver Creek and Aspen, so fractional ownership broadens the demographics dramatically.”