BISNOW: Let’s start by finding out hat each of your offer for luxury living.
DAVIS: Exclusive Resorts is the leader in the new category of luxury destination clubs. Members have access to hundreds of homes in dozens of destinations around the world (from Maui to Miami, Telluride to Tuscany) with full services and amenities, but without any of the hassles of home ownership, and with the flexibility of owning many homes. Exclusive Resorts works much like a country club. Members pay a one-time deposit, 80 percent of which you get back if you ever leave, and annual dues. That entitles you to two, three, or four weeks in any of the homes around the world each year at the times you choose. Our members have 35 destinations and 300 residences for less than a down payment on just one home.
BISNOW: You call it a home? But these seem to be more than that. What is the typical value of one?
DAVIS: These are $2 million residences – they might be penthouses in the core of a ski destination or five-bedroom homes on 50 acres in Tuscany.
BISNOW: And is it a fractional ownership or destination club?
DAVIS: Those are two very separate things: luxury destination clubs, of which Exclusive Resorts is a leader, and fractional real estate. With Exclusive Resorts, you don’t own anything – you don’t have a real estate deed. Essentially you belong to a country club. In fractional real estate, you own an eighth or tenth share in a specific destination so you can go there three or four weeks a year.
BISNOW: What makes you the industry leader?
DAVIS: Within the luxury destination club industry, Exclusive Resorts is the leader. We had about 20,000 weeks of vacation taken by our members with 96 percent satisfaction. This is the highest satisfaction level ever in luxury hospitality.
BISNOW: Who measures it?
DAVIS: The members.
BISNOW: What’s the Steve Case Connection?
DAVIS: Steve Case bought control of the company three years ago when it was a pure start-up company and currently serves as its chairman ad majority stockholder.
BISNOW: Mark Gregg from Penrose Group, tell us about your Canyon Ranch Living project in Bethesda.
GREGG: We are developing the Rock Spring Centre, which is a mixed use development in Bethesda that will have 350,000 square feet of retail, a 157-room Canyon Ranch Hotel, with 400 residential condominiums and a 10,000 square foot health and wellness center operated by Canyon Ranch Living. This will be the first such facility in the mid-Atlantic.
BISNOW: Even though most WL readers know what Canyon Ranch is, tell us a bit more.
GREGG: Canyon Ranch started about 25 years ago in Arizona when Mel Zuckerman decided to start a company that would focus on health and wellness. They started in Tucson, expanded to the Berkshires, and the first Canyon Ranch Living Facility was built in Miami Beach. The Bethesda development will be the second live-in wellness facility. It furthers the concept of taking that healthy lifestyle and letting you do it every day rather than just going for a week.
BISNOW: When do you break ground and when would you deliver?
GREGG: We break ground in June, 2006, and we will deliver in 2008.
BISNOW: Do you have plans even beyond he number of units you described?
GREGG: This is an exclusive opportunity. There will only be 434 condominiums available for purchase with a membership to the health and wellness center. The health and wellness center will have everything from the typical health spa amenities to physicians. The average person in the U.S. spends less than 1- minutes a year with their doctor – here’s an opportunity to have that access year round not only to deal with disease, but prevention as well.
BISNOW: Where in Bethesda is this exactly and is there anything else like it in this region?
GREGG: At Rock Spring Center right off of Democracy and Old Georgetown Road. I think it’s a unique opportunity because when you purchase your condominium you get a health assessment, which opens the door to prevention, pleasure and learning, which is what this is all about.
BISNOW: John, tell us about the luxury residences you are building aboard the Orphalese.
LETHAM: The Orphalese is truly the first luxury liner designed to have 200 permanent residences as well as 265 hotel rooms. It is also the first event-driven cruise ship in the country. The ship will visit the top 40 most exclusive events every year, such as the Cannes Film Festival, the Grand Prix in Monte Carlo, America’s Cup in Spain, and Wimbledon. The Orphalese is about 1,000 feet long and 114 feet wide and can go through the Panama Canal. It’s larger than an aircraft carrier, but about as agile as a yacht. The residences will come fully furnished ranging from $1.8 million to $10 million (for a two bedroom, two bath to a five bedroom, five bath). Modest monthly assessments include food, major medical, light, gas, water, and all [shipboard] facilities. Other cruise ships are great, but they go from place to place – palm tree to palm tree- rather than event to event. For example, when we go to Cannes, we invite exhibitors on board to screen their films in our 750-seat – truly incorporating the Orphalese and its residences into the event.
BISNOW: And the name Orphalese?
LETHAM: The Orphalese was inspired by Kahlil Gibran’s book “The Prophet.” The prophet spent twelve years waiting for his ship to arrive in the city of Orphalese to return him to his home.
BISOW: What do you three think is driving the luxury resort and healthy lifestyle trend?
GREGG: American Lives did a study for Canyon Ranch, and it reported that one third of Americans seek healthier, more balanced lives and 75 percent of adults seek to reduce stress and re prioritize their lives. These models offer that.
DAVIS: People want quality experiences. Maybe our parents were ok with just going to a beach or playing golf, but what today’s consumers really want is to relax, rejuvenate, and discover. It’s about the combination of a great place that happens to be a canvas that allows you to have great experiences with your family and friends, learn a lot about yourself and enjoy the time away in a manner that is very active and experiential, not just relaxing. They are also very open to a different and better way of doing things. Whether it is a 99 cent download from iTunes, or a$1 million fractional jet from Marquis or NetJets – these are both business models that didn’t exist ten years ago.
LETHAM: Couldn’t agree more. Today’s 50 year old is yesterday’s 40 yar old. The boomers are living longer, are more active and take better care of themselves and their health.
BISNOW: Anybody’s welcome to apply, but it look like the Baby Boomers are in the bull’s eye. Can you ay a little more about your demographic targets?
GREGG: We are a lifestyle community and looking to attract people in the range from 50-75 years.
LETHAM: We tend to start a little younger when it comes to females: 42 at the starting age, and for males right around 52. The Orphalese is a second home, not a retirement facility. We are looking for people who are still working and who have hit a particular level in their career that will allow them to have a second home.
DAVIS: Exclusive Resorts is a bit different. We don’t have a demographic. We have more of a psycho graphic. In other words, our people don’t fit into the brackets of age, income, or kids. Our members are from ages 35-75. Their net worth is from $3 million to $300 million; their families range from seven kids at home to empty nesters. But, all want great vacation experiences with no hassles. There are three million people in the United States whose net worth is $3 million or more, including their primary homes. So when you start to talk about the depth of wealth in America today, it is astounding. At Exclusive Resorts, for example, we have more members in Iowa than London. America has an extreme amount of affluence.