Wednesday, March 15, 2006

 

Putting On The Timeshare Ritz of Real Estate

Coming on the heels of the quickly sold-out St. Regis project, buyers are chomping at the bit for units in the Ritz-Carlton Club and Residences project at 690 Market St., a joint venture between the Ritz-Carlton and Alameda-based timeshare developer Jim Hunter.

In the first five days since the developers started accepting reservations for the 101 units in the old Chronicle Building, would-be Ritz-Carlton clubbers have plunked down 60 reservation deposits for a piece of the 1890 building, according to Robert van Dijk, the project's director of sales and marketing. Of the 60, 18 are for condos, and 42 are for monthly slots at the project's timeshare fractional ownership units. Owners of timeshare fractional units pay $200,000 to $300,000 for a one-twelfth, deeded interest.

All potential owners who have put money down on a private residence, have also reserved a fractional timeshare, said van Dijk.

"They are looking at the fractional shares and saying, 'this will be my guest house.'" said van Dijk. "These are individuals used to having a guest house."

In order to reserve a condo, a prospective buyer must put down $100,000 for a one-bedroom, $150,000 for a two-bedroom, $200,000 for a three-bedroom, or $250,000 for a penthouse. The building's four penthouses are already reserved, although reservations are refundable until May 20. At that time buyers will have to put down 10 percent for their units, which are expected to fetch between $1.1 million for a one-bedroom and upwards of $5 million for a penthouse.

Van Dijk said potential buyers include Bay Area empty-nesters as well East Coast and Southern California residents. He said the challenge is to educate prospective buyers about fractional ownership, which is often perceived as a glorified timeshare. The main difference is that fractional owners own a piece of the unit rather than simply the right to use it, which can make it easier to finance or sell. Ritz-Carlton is pitching fractional interest as an alternative to buying a second home. Club members will have sole access to a spa and clubhouse and may visit other Ritz-Carlton Clubs including Aspen Highlands, St. Thomas and South Beach, Fla.

"Our goal is to help families improve their leisure portfolio," he said.

The developers have also shelled out $13.5 million to acquire 660 Market St., the office building next door. Hunter said they plan to build an underground parking garage for the Ritz project there and the ground floor will be used as a Ritz-Carlton sales office. He said 660 Market St. could eventually house amenities for the Ritz building, or possibly even additional condos, although it also may remain office space.

"It's a very pretty building and it's going to match nicely with the Chronicle Building," he said. "We don't know what we'll do with it, but we're definitely going to make it look good."

Built in 1890, the 16-story building was the first skyscraper in the West and home to the Daily Dramatic Chronicle newspaper.

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