For Immediate Release

PIERCE GROUP ALLIANCE OFFERS LIFELINE TO AILING

CONDO HOTEL LENDERS AND DEVELOPERS

        PICKENS, SC (October – Pierce Group, LLC and Vacation Finance today announced the formation of a strategic alliance to provide comprehensive conversion services to distressed developers and lending institutions with unsold condominium and condo hotel inventory.  With expertise in fractional ownership finance, marketing, sales and operations, the alliance helps faltering projects regain their footing.

     While the real estate market has slumped across the board, condo hotel projects have been especially hard hit by a decrease in buyer interest as dreams of big investment returns have fizzled, and an increase in developer concern as class action lawsuits form to address alleged SEC violations in the industry. 

     “Developers and bankers now are scrambling to find ways to turn what unfortunately have become white elephants into profitable projects,” said Eric Pierce, CEO of Pierce Group, a consulting firm specializing in the design, sales and marketing of private residence clubs and fractional ownership developments.  “For many, fractional ownership may be the answer.”

        Luxury second home properties are one of the few growth sectors in today’s unsettled real estate market.  According to the “2008 Annual Fractional Interest Report” by NorthCourse® Leisure Real Estate Solutions, high-end luxury fractional real estate sales surpassed $1.9 billion in 2007 in the U.S., Canada and the Caribbean, up 18 percent from 2006.

         Fractional ownership – especially private residence clubs – offers distinct advantages to developers and buyers, according to alliance member Bob Waun, CEO of Vacation Finance, specializing in second-home commercial financing for developers and innovative mortgage solutions for buyers.  According to Waun, even in a down market buyers are attracted to residence clubs because of the lower upfront and annual costs and desirable resort locations.  “But developer beware,” said Waun.  “A great opportunity can’t survive a misguided concept.”

     According to Waun, not every project is right for fractionalization, and few developers understand the intricacies well enough to make them succeed.  The alliance was formed, he said, to offer developers and lenders the expertise to assess success potential.  Using data assembled from both thriving and failed fractional and condo hotel projects throughout the U.S., the team designs the private residence club structure, the financing model and the sales and marketing approach to match the unique project needs.  

      “With capital harder to come by, credible projections and the proper capital structure are critically important,” says Kevin Stolz, principal of Kevin Stolz & Associates.  Stolz will provide detailed financial analysis support to the alliance and recommend additional capital outlets and capital structures where needed.  

     The alliance also provides banks with receivership services.  Real Estate Receiver Dennis Heck, owner and operator of U.S. Coastal Development, LLC, has joined the alliance to provide lenders with a simple and streamlined process to convert their fledgling condos into fractional ownership properties.  “Understanding current market conditions as well as future market trends is key to being a qualified real-estate receiver,” said Heck.  “Protecting the lender’s collateral and putting into place solid business and marketing plans to retire the debt also are essential. This is where a well-organized professional team is critical.”

     According to the alliance members, the goal is to offer developers the resources to implement a conversion plan as efficiently and cost effectively as possible and get sales phones ringing again.

     “Pierce Group is now able to provide the fractional industry’s most comprehensive suite of services — from feasibility analysis and financial models to recommended capital structure, consumer financing, development financing, sales and marketing” said Pierce.   “Everything a developer needs is under one collective roof.”

—For more on Pierce Group, LLC visit:  www.PierceGroupConsulting.com

—For more on Vacation Finance and Kevin Stolz visit: www.Vacation-Finance.com

—For more on U.S. Coastal Development, LLC. visit: www.RealEstateReceivership.com

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Here is a sneak preview of a new program that bundles a suite of services to provide condominium and condo hotel developers and lenders a way out of what is now an unfortunate situation: no sales.

The suite of services being launched this week will likely be named the Fractional Conversion Program.  Condo hotel buyers have become few and far between due to a myriad of issues with owner class action suits against developers, some with regards to alleged SEC violations.  Whole ownership buyers are not raising their hands either.  With the economy still in a nose dive, there are not a lot of families standing in line for their own second home. 

Pierce Group, LLC, and Vacation Finance are teaming up to provide a suite of services tailored exactly for this situation.  We have thought of everything. We even have a Court-Appointed Receiver waiting in the wings if need-be.  We also realize that these services need to be affordable.  If conversion is too expensive it’s pointless.

Look for a program that includes a comprehensive feasibility study, financial model, recommended capital structure, commercial financing, consumer financing and sales and marketing management services.

Many are realizing that a more practical solution is to buy fractionally; more specifically buy into a Private Residence Club (PRC).  Yes, purchasing a deeded piece of real estate on valuable resort property is a good idea, but doing it fractionally is an even better idea.  Furthermore, many baby boomers and Gen Xers now realize it and sales continue to increase.  Fractional ownership’s up front and annual costs are nominal compared to the alternative option of a whole ownership million dollar purchase in High-Brow, Florida.  Moreover, owners can use their PRC interest when they choose and as much as they choose.  Throw in all of the high-end services and amenities and fractional ownership becomes a very attractive proposition.

So what to do with a condo development that is producing nothing but headaches for its worried sales people?  Convert it to fractional ownership.

Please keep an eye on this blog and SecondHomes411 for more info. 

Eric Pierce

FORESIGHT COSTS LESS THAN HINDSIGHT^SM