I’ve become a Twitter fan.  And recently I’ve started following some professional athletes because let’s face it, it’s more fun reading about who the Mariners are going to trade than tweeting about fractional real estate all day long.  So as I read through various tweets - namely Matt Hasselbeck and various other members of my beloved Seattle Seahawks - I can’t help but notice that these machines that perform every Sunday are actually real live people.

As I read these tweets I am learning more about these athletes and what they do from day to day.  For example, last Sunday Hasselbeck was in the middle of a water balloon fight, I will assume it was with his kids and that he’s not risking another back injury trying to beam third rounder Deon Butler.  If there were no Twitter I would have thought he was simply plugged in to an outlet at Microsoft headquarters waiting for a software upgrade.  But now I realize that he’s a human being and does normal stuff.  He’s kind of like me, similar age, has kids, you get the picture.

Now I find myself really dreading the first Seahawks loss of 2009 (if they actually lose that is… we can all dream).  Not only am I going to feel totally annoyed and depressed because my favorite team lost - as I did 12 times last year (ehhem) - I will feel even worse for the players that I follow on Twitter; unless of course one of them tweets “Tough loss, going to Sushi!”

Also, the press conferences after the game will really be a let down from now on.  Twitter will confirm for me that 99% of what athletes will say will be complete B.S., because after the press conference I’ll be able to read what they really have to say on Twitter.  The frustration will lie in the acknowledgment that these real life humans will decide on their own to give robot responses like, “We just need to take it one game at a time.”

I’m looking forward to reading something real on Twitter this season.  Instead of the robotic “We just didn’t execute for a full four quarters” response, I want to read Hasselbeck tweeting, “Housch made the Pack’s secondary look like a glacier” or Walter Jones complaining about how “some joker poked me in the ear hole today!”

Twitter is doing for professional sports what Fantasy has done; it is leading fans to care not only about the team, but the individuals on it.  That’s powerful stuff, if I’m Bud Selig, Roger Goodell, David Stern or Gary Bettman, I’m a Twitterbacker.

Now for me, the fan, I’m heading to buy a Costco-sized supply of Pepto.

Eric Pierce - A Seahawk, Mariner, and former Sonic fan now residing in Boise, ID

Some intriguing numbers…

Let’s take a look at how the Shared (Fractional) Ownership industry compares to the Whole Ownership industry today and in 2004. We know that both industries grew during 2005 and 2006, started to decline in 2007 and experienced a virtual stand still towards the end of 2008.  However, what we see here is that Shared is holding its own and has actually gained a percentage point in market share from Whole.

Shared Ownership                    Whole Ownership

2004     $1.54 B                                     $165.7 B

2008     $1.52 B                                     $76.8 B

%              -1.3%                                        -53.7%

*Shared Ownership numbers from Ragatz & Associates and includes Fractional, Private Residence Club and Destination Club sales.

**Whole Ownership numbers from National Association of Realtors® annual Investment and Vacation Home Buyers Survey

While the fractional ownership industry has been getting a lot of press lately and many believe (as do we) that it will lead in bringing back the resort real estate market, resort developers should keep in mind that there is still room for whole ownership.  And while whole ownership sales levels are expected to remain lower than in years past, it still has a place.

Let’s review the most common objections that fractional sales teams hear:

1. I’m looking for my own place
2. I don’t like to share
3. We want to be able to come for several months
4. We want to be able to send anybody we want
5. We want to be able to rent out to cover some of our costs

For those prospective buyers that continue to harp on these needs and insist that fractional ownership is not for them, why not have offer something else?  Many developers are either purpose-building or converting 100% of their units to sell fractionally and therefore risk losing prospective buyers to whole ownership competition.

There are several safeguards that must be in place to pull off a multi-use residential sales plan so let’s review them here.

1. One sales team for each product offering - no exceptions
2. Separate the residences - Physically and legally
   • A whole ownership buyer will not be paying fractional dues multiplied by 8 - two separate HOA’s will be needed
   • By no means should the opposing sales teams be selling the same product.  This gets ugly… very ugly, no exceptions here either.
3. Cost per night must make sense - The price points should be structured so that fractional ownership on a cost per night basis is still a better alternative than whole ownership with rental revenue.
4. Structure the legal documents - allow for flexibility in the contracts for altering the product (residence) mix if need be.
5. Create a strong referral program - a little competition between sales teams isn’t bad, as long as it’s a little.  An internal referral fee between sales teams is a good idea.

If the fractional and whole ownership products are structured properly, there are benefits to multi-use residential sales.

1. Fewer contracts to sign - if a project has 20 residences and they are all sold at 8:1 then there are 160 contracts that need to be signed.  If 10 of those however are sold wholly, then only 90 contracts would need to be signed.
2. Faster sell out - in the example above, the sales teams have 44% less sales to make which should translate to a sell out period that is at least 44% shorter.
3. Lower carrying costs - Real Estate 101, sell faster and watch expenses disappear.
4. Higher closing percentage - it only seems logical that if a buyer is firing away with those common objections they will likely go to nearby whole ownership competition.  Be that competition.
5. Larger target audience - Let’s face it there are those who choose not to buy fractionally.  In their minds they have earned the right to have a home sit vacant for 11 months every year.  Provide something for them as well.

Of course, proceed with caution when putting together co-existing fractional and whole ownership programs.  Common mistakes can be made up front that can extend the sales cycle thus shooting expenses into orbit.

The Bottom line:  the market will recover, be ready.

The first step in being ready is a proper feasibility analysis.  Discover Pierce Group’s comprehensive and affordable feasibility study here.

FORESIGHT COSTS LESS THAN HINDSIGHT^SM