A Quintess member sent Helium Report a recent management communication to members. Seems like the luxury destination club is making progress on all fronts.

2006 ended with more than 300 members and 49 homes – maintaining a sub-six member-to-home ratio.

Real estate acquisitions are in the works for the following destinations:

• Anguilla (2 homes)
• Florence, Italy (2 luxury city condos)
• Napa, Calif. (2 homes)
• Tuscany, Italy (1 home)
• Telluride, Colo. (2 homes)
• Deer Valley, Utah (2 homes)
• Santa Barbara, Calif. (2 luxury city condos)
• Newport/Laguna, Calif. (1 home)
• St. Thomas (1 home)
• Bend, Ore. (2 homes)
• Lake Tahoe, Calif. (1 home)
• Palm Desert, Calif. (1 home)

But the club does warn that about half of these deals could be delayed or not close as they are always subject to the dynamics of the local real estate market.

The company is now at a break-even point on a monthly cash basis meaning monthly inflows exceed monthly outflows, excluding capital investments.

The board just voted to raise additional capital, allowing Quintess to start to develop new homes ahead of demand.

Helium Report Perspective

Each destination club is different, but the break-even point for a club could prove to be a very important milestone, as it allows the club to tell investors that less of the new capital is funding operations, and much more of it will go to new home development and acqusition. This is important to break the ‘chicken and egg’ issue – prospects are reluctant to join a club with too few homes and clubs need members to buy homes.

Investor capital can fund home acquistion ahead of member sales and help solve that problem. The road ahead for Quintess? Improving from last year, since it has consolidated some its competitors, and appears to have continued access to new capital.