RESORT ROUNDTABLE
NEW DEVELOPMENTS IN LUXURY LIVING
Luxury living reaches new heights
through three unique ventures:
Developer Mark Gregg brings Canyon
Ranch Living to Bethesda with private
residences adjacent to an exclusive wellness
center, hotel and high-end retail; Steve Case
and Donn Davis lead the luxury destination club
pack with 300 residences worldwide available
through Exclusive Resorts; and luxury cruise
line developers Don Allen and John Letham
allow you to purchase a second home on the
good ship Orphalese, which travels the world
from exclusive event to event while providing all
the comforts of home and a five star hotel. WL
moderator and Real Estate Weekly publisher
Mark Bisnow leads the discussion.
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Donn Davis
Davis has served as a senior
executive at Time Warner, America
Online and the Tribune company
for the last decade. After cofounding
Revolution LLC with Steve
Case, he now serves as CEO for
Exclusive Resorts. |
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John Letham
As senior vice president of business
development with Orphalese Global
Strategies (OGS), Letham's principal
duties include the selection and
oversight of partnership companies
and their progress towards
completion of shipboard services,
public relations and sales program. |
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Mark Gregg
Gregg serves as managing partner
and president of Penrose Financial
Services, which provides mortgage
banking, strategic corporate
real estate and property
management services. |
Mark Bisnow: Let's start by finding out what each
of you offer for luxury living.
Donn 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 onetime
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 $3 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 a 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 and
majority stockholder.
Bisnow: Mark Gregg from Penrose Group, tell
us about your Canyon Ranch Living project
in Bethesda.
Mark 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 the 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 10 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 exaclty 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.
John 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 theater - truly incorporating the
Orphalese and its residents 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.
Bisnow: 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
reprioritize 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, recharge 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
that 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 year 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 looks
pretty much like the Baby Boomers are in the
bull's eye. Can you say 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
psychographic. 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, excluding 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.
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