Esperanza, Castello di Casole, One Steamboat Place, and The Rocks are some of the most popular and well-known resort properties. These boutique, private residence clubs were all developed from the ground up by the lesser known Timbers Resorts of Carbondale, Colorado. The company currently manages six stand-alone, luxury resorts in the U.S., Cabo San Lucas, Tuscany, and St. Thomas.

Helium Report spoke with David Burden, President and CEO of Timbers Resorts, to learn more about his firm’s fractional real estate model and future development plans.

Private Residence Clubs vs. Destination Clubs

We started the discussion by asking David Burden (photo, right) about consumers’ interest in private residence clubs and destination clubs. He explained the demographics for each industry are similar, but the key difference is that a private residence club owner is choosing a specific resort as their primary vacation destination.

Burden has seen an increasing number of owners purchase multiple fractions or join a destination club in addition to owning a fractional residence. Indeed, Burden himself is an Exclusive Resorts member and he points out Exclusive Resorts owns units at each of the Timbers Resorts properties. His firm’s website indicates approximately 15% of Exclusive Resorts’ estimated $1 billion in real estate assets are Timbers Resorts properties:

“Timbers Resorts and Exclusive Resorts, www.exclusiveresorts.com, announced in early 2004 a non-exclusive strategic alliance to include each other in the pursuit of one-of-a-kind resort locations in which both membership concepts may co-exist. Exclusive Resorts has purchased over $150 million of SV/ Timbers properties to date.”

(Read Exclusive Resorts reviews for insights from members.)

Privileged Reciprocity

In Burdens words, Timbers Resorts developed six “world-class resort properties in single destinations.” Each is sold as a stand-alone product, but owners receive the added benefit of a feature Timbers Resorts calls “Privilege Reciprocity.” The firm’s website describes the benefit in more detail:

“Members wishing to request a trade simply visit their resort’s website and list it on the password-protected, Members’ Trading Post page. By clicking on the links for the other properties, they can then see what trades are offered by other members. Once a member finds a trade that interests them, they contact the potential trade partner via the contact info listed on their trade page. Next, when both parties have agreed on trade dates, they send written confirmation to their resort consenting to the trade.”

Burden said Timbers Resorts decided not to join other fractional exchange networks and opted to facilitate exchange among its owners instead. He says the feature is positioned as a perk, but not as a major selling pitch since owners are anchored to their favorite locations. Burden noted Calistoga Ranch is included in the program as well due to the relationship with Auberge du Soleil through the Esperanza Resort in Cabo San Lucas.

Resale of Private Residence Clubs

In January 2003, a 1/8th share of a 2-3 bedroom unit in Esperanza was priced at $209,000 according to Burden. Three years later, he says comparable units were selling for $385,000. Four bedroom units saw a similar increase from $460,000 to $660,000 (1/8th share) over the same time period and three luxury villas climbed from $750,000 to $1.4 million for a 1/6th fraction.

Burden says Timbers Resorts’ fractional real estate products are designed to perform alongside whole ownership options. However, he suspects that in general the private residence club industry does not see the tremendous appreciation that took place at Esperanza in Cabo San Lucas. He noted that Timbers Resorts tries to differentiate its properties by developing niche ocean-front or slopeside resorts that are “one-of-a-kind” such as the Timbers Club in Snowmass, Colorado. He concedes that in some locations such as The Rocks in Scottsdale, it’s more difficult to differentiate a golf resort from alternatives.

International Expansion

Burden expects international locations will constitute a large part of Timbers Resorts’ growth. Currently, half of the resorts in Timbers’ portfolio are based outside of the United States: Castello di Casole in Tuscany, Italy; The Preserve at Botany Bay on the entire western tip of St. Thomas in the U.S. Virgin Islands; and Esperanza Resort in Cabo San Lucas.