DC4MS

DestinationClubForums had the pleasure of speaking with Adam Capes, President of Equity Estates, LLC today about his new Atlanta-based Luxury “Real Estate Investment Fund” this morning.

We first reported on Equity Estates LLC on January 18, 2008 after reading an article in the Atlanta Business Chronicle about their plan to raise $129 million to buy luxury vacation homes for its investors Equity Estates raises $129 million for vacation homes and Adam stated that there were several changes to this plan and he will try to post the changes on our forum.

Adam stated that his new venture with partners Philip Mekelburg and Timothy Trankina as something different from the traditional Destination Clubs (equity and non-equity) in the industry as members of his fund owns shares in the Equity Estates, LLC and the company owns the assets (properties) free and clear without any mortgages. He did admit that they currently lease a few homes to offer diversity of locations to their members.

Equity Estates is targeting homes in the $2.5-3.0 million dollar range and plans to buy future homes without any debt. The fund is structured so that the members have an equity interest in the portfolio of homes and will receive any appreciation of the real estate when it is sold. There is no minimum for the number of nights used on a trip – you can stay somewhere for a single night, however the maximum stay at one location is 18 consecutive nights.

There are currently two membership plans being offered:

Full membership - $350,000 fee, $16,500 annual dues, 30 nights of use
Executive membership = $185,000 fee, $9,250 annual dues, 15 night of use

Adam stated that 80% of capital contributions are placed into a real estate acquisition account and deployed into real estate, versus an estimated 50% or less for the typical destination club. The remaining 20% of capital contributions establish an operating account at the fund level to pay for sales, marketing, legal and other fund-related expenses. Furthermore, Equity Estates is committed and legally bound to full financial transparency, with annual audits and appraisals shared among all members.

There are currently 36 Full Members and they have a goal of having 7 full members per each home acquired. According to Adam, Equity Estates deliberately underutilizes its assets, so at any given time, the portfolio of properties will likely have open availability of 75% or more. They currently have 7 properties of which they fully own 3 homes (NY, Turks and Caicos, Los Cabos) and lease 4 homes (Deer Valley, Inlet Beach, Naples, Beaver Creek).

He spoke at length on two properties in particular – Place 57 in New York which is a 3 bedroom 3 bath property located on the 26th floor at 207 East 57th Street and The Regent Grand (unit 602) a 4 bedroom 4500 square foot 6th floor lower penthouse with direct views of Grace Bay in the Turks and Caicos.

Place 57 was designed by architect Ismael Leyva with no more than two apartments per floor on average. Homeowners experience luxury living in every aspect, from the rich Santos Mahogany strip flooring and high ceilings rising between nine and twelve feet, to the expansive, floor-to-ceiling windows allowing an abundance of natural light into every home. Master baths feature a full suite of Waterworks fittings, oyster beige marble tiled floors and countertops, walnut cabinetry and decorative marble mosaics in glass enclosed showers. Gourmet kitchens boast top-of-the-line Viking stainless steel appliances, Pietra de Bedonia stone countertops and furniture-inspired, rift-cut oak cabinetry. In addition to its exceptional architectural aspects, Place 57 has an elegant lobby featuring Baccarat crystal lighting and decor and a graceful outdoor garden ornamented with stunning Baccarat chandeliers, both designed by renowned New York-based interior designer, Vicente Wolf.

The Regent Grand is a property I know very well as I actually considered purchasing a unit there myself due to my very favorable impression of the developer - HAB Group. The quality of the building, location, and attention to detail is suburb. The Regent Grand is a luxurious distinctive retreat that is inspired by both neo-classical Italian and Caribbean Architecture and was designed by Simon Wood and Associates to seamlessly blend indoor and outdoor living. There are only forty-six oceanfront residences that offer from two to five bedroom villas on each of seven levels with only four units on each level accessing each elevator. Juliet balconies and hurricane resistant rustic shutters add elegance and Mediterranean charm, while expansive oceanfront balconies with customized railings and balustrades bring the beauty of Grace Bay into each unit.

Equity Estates
800-413-3340
website - Equity Estates Fund - Enjoy all the benefits of owning vacation homes with none of the hassles.

DC4MS

I called Adam again just to clarify what happens if someone wants to resign (sell) their membership.

He stated that the Equity Estates Fund 1 has a 15 year lifespan and will expire in November 2021 and the properties will be liquidated.

Scenario 1
Each member will get back their capital contribution plus 80% of the profits of the sale of the properties in November 2021

Scenario 2
If the fund is not closed, a member can sell after 2 years on a 1:1 basis and get back 92.5% of the capital contribution rate.

Scenario 3
If the fund is closed to new investors, a member can sell to anyone they want and for whatever price they are able to negotiate pursuant to their operating agreement.

-----------------------

The fund can be closed at any time, but their goal is to have 300 Full Members and can have a maximum of 150 Executive Members. Thus, the fund can have a maximum of 375 total members when it closes.

DC4MS

Here is a PDF of the Fund 1 Executive Summary.

.

Attached Files

Exec_Summary_3.5.08.pdf (523.1 KB, 22 views)

DC4MS

Here is a PDF of The Regent Grand residence floorplans of unit G-602 in Turks and Caicos.

.

Attached Files

Unit_G-602.pdf (507.0 KB, 13 views)