Asset Repositioning Strategy
Strategic repositioning for hospitality real estate assets.
Shared Ownership Conversion Advisory
If you have an underperforming hotel or mixed-use residential project or simply wish to achieve the highest value from your asset, FGS Realty Advisors provides a service to evaluate and execute a plan to convert all or part of the units to a shared ownership product, including timeshare, vacation ownership, vacation club, etc.
FGS Realty Advisors has brought this concept to several property owners with great success. One recent example was The Hotel Blake Chicago - please click here to see more.
Key Considerations for Conversion
Issues of consideration in determining whether your project is a candidate include:
- Any zoning or land use limitations?
- Is the project in a zone for condominiums and second homes?
- Registration issues?
- Likely to be required in both the situs state and marketing states
- Real estate licensing
- Internet sales issues
- Prohibited by the CC&Rs?
- Is shared ownership and/or timeshare allowed?
- Is your project mixed-use already?
- Do the CC&Rs authorize, prohibit it, or are they silent on the issue?
- Documents may need to be amended
- Must review master CC&Rs
- Is your location appropriate?
- Is the location urban or a resort?
- Is it in a prime location?
- Is your property considered a drive-to destination within a 4 hour drive?
- Is your location a destination or regional resort area?
- Is your product compatible for shared ownership?
- What are the sizes and configuration of the units?
- How many units exist now?
- Quality of furnishing package?
- What is the current ADR, and what are the comparable rental rates?
- Lender restrictions?
- Are there any construction loan or permanent loan covenants?
- Issue getting partial releases
- Change of use covenants
- Are there end-loan issues?
- FNMA, FHA prohibition
- Adequate amenity package?
- Golf
- Beach
- Ski
- Urban amenities such as shopping, restaurants, theatre, etc.
- Are there any competitors with shared ownership and/or whole ownership in the vicinity?
If your property is a candidate, some of the economic benefits of implementing a “shared ownership/timeshare” program would include:
- Increased occupancy percentages
- Higher ADR through occupancy compression
- Lower fixed operating expenses (costs get allocated to the HOA of the shared ownership product)
- Higher overall net profits
- Increased return on investment through the sale of underutilized hotel inventory