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Upscale Fractional Ownership Storming the Aspen Market

By Jason Blevins, The Denver Post
Knight Ridder/Tribune Business News 

Dec. 15, 2002 -- ASPEN, Colo.-- Tom McLane keeps a photo collection of Aspen properties currently on the market. 

There's the shot of the 100-year-old ranch house in downtown Aspen for $2.2 million. Here's a 1970s-era condo -- complete with shag carpet -- for $2 million. Here's a mini-mansion for $5 million. 

"People realize that if you went to a broker here and said, `I have $2 million. Show me luxury ski-in ski-out,' they'll laugh you out the door," says McLane, the lead broker for the Ritz Carlton Club at Aspen Highlands, a high-end club where members pay $160,000 to $490,000 for one-twelfth ownership of a top-shelf condominium with all the trimmings of a five-star hotel. 

Such deals are called fractionals, an upscale type of time share. 

"When people see the prices for property around here, we look much more appealing," he says. 

In Aspen and Snowmass Village, where average home prices hover between $3 million and $4 million and the limited supply of home sites sell for $1 million to $2 million, private luxury clubs are flourishing. 

Sales at the Timbers Club and Snowmass Club in Snowmass and the Ritz in Aspen Highlands have also essentially killed the market for condos and duplexes, most of which are 20 to 30 years old. 

In 1998, before fractionals stormed the Aspen market, there were more than 200 condo sales in Aspen. This year there will be fewer than 100. 

Snowmass saw more than 160 condo sales in 1999, and this year, estimates indicate that the aging village will see fewer than 30 sales. 

"They've stripped half the buyers, maybe more than half the buyers who would be looking at condos," says local realty agent Bob Ritchie of fractionals. "They've been siphoning off a lot of buyers." 

And the horizon for fractional ownership in the Roaring Fork Valley looks bright as the three main clubs move into the second and final phases. 

Also, two new projects -- a traditional time share by the Hyatt and the extremely upscale Residences at the Little Nell -- are preparing to break ground in downtown Aspen. 

The fractional move into Aspen shows particular faith in the potential of the market in light of recent regulations the city imposed on the projects. 

"We want our time shares to act, look and smell like a lodge," says Joyce Ohlson, deputy director of Aspen's community development department, noting that several of the city's venerable inns have funded renovations by converting to shared ownership. "This is key for Aspen because we have a history of old lodges that are accessible, and we want to have them keep that accessibility." 

This fall, the city passed rules requiring fractional projects to host commercial and retail enterprises on the ground floor and make rooms available for rental to the public. 

That doesn't sit well with developers peddling privacy and exclusivity, but it hasn't stopped anyone from pushing a fractional project into Aspen, Ohlson says. 

For most of 2000, the Timbers Club was a double-wide trailer on cinder blocks surrounded by mud at the base of Snowmass. 

Inside the trailer was a fanciful model of what the club would offer: granite countertops, stone baths and steam showers, and three stately bedrooms. 

Today, the model has been replicated in 22 2,000-square-foot residences. Eight owners are slated for six weeks of occupancy in each residence. 

After a year of sales, the club is 34 owners shy of selling all 176 memberships, priced between $379,000 and $480,000. 

Construction is underway on two more buildings that will host the final 14 residences, and sales chief Keith Marlow says he is gunning to have the entire club sold by the end of the ski season. 

Adding to the Timbers Club appeal is the massive redevelopment of the base area at Snowmass, a snowball's toss from the heated slopeside pool at the club. 

"It's cool that we have this enclave that's private, and soon owners will be able to walk right over to a new village," Marlow says. 

At the Snowmass Club, owner Aspen Skiing Co. has partnered with resort developer Intrawest to help market and develop its second phase, called The Sanctuary. 

The club's first phase -- 30 condos, each owned by seven buyers -- is nearly sold out, and The Sanctuary's 21 units, each selling to eight owners, is on the market. 

"We've had three price increases, and we continue to see demand for the product," says Jib Street, director of sales for Intrawest's shared-ownership branch, which is opening an office in downtown Aspen to promote its latest fractional offerings. "It's not a waning demand. It is there and definitely still growing." 

The history of time shares conjures up images of patent leather shysters peddling seven days a year at some exotic locale. 

That image faded when fractional ownership was touted by five-star hoteliers, including the Ritz, which has shared-ownership clubs in Aspen, Vail, St. Thomas in the Caribbean and Jupiter, Fla. But one haunting issue remains: the questionable resale value of shared ownership. 

"When you buy a fractional, it's not an investment. You are buying time," says Ritchie, a critic of the latest twist on time shares. "You hope to get only a portion of your money back when you sell. That's their dirty little secret." 

-----To see more of The Denver Post, or to subscribe to the newspaper, go to http://www.denverpost.com 

(c) 2002, The Denver Post. Distributed by Knight Ridder/Tribune Business News. IDR, 


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