Aiming to entice wealthy vacationers who can easily afford a second home but prefer the amenities and low maintenance of a time share, resort industry veteran Tom Fulton has created a new kind of high-end residence club.
The catch: Membership is limited to five people per unit, which guarantees an open spot whenever you want, Fulton says.
That promise circumvents a common challenge within the fractional property and destination club industry – securing space during peak times, like Christmas or July 4.
Fulton’s guarantee, however, does not come cheap for those interested in his enterprise, called Epiphany Clubs & Resorts.
The cost for its Club at Solaris in Vail is a $1.9 million buy-in, plus $35,000 in annual dues.
“This is not for the faint of heart,” Fulton said.
Solaris is one of two clubs that the Greenwood Village-based company is selling. Ninety-five memberships are available for 19 luxury condominiums located in the $180 million Solaris development in the heart of Vail Village.
At The Club at Tristant in Telluride, Epiphany has sold 55 of the 100 available memberships, with prices starting at $685,000 and annual dues of $18,500.
While there is plenty of competition in the high-end residence club market, the buy-ins are much lower. Prices at North American clubs average $247,700 per fraction, according to Oregon-based resort consulting firm Ragatz Associates.
No doubt, the residence club industry is booming. Overall sales grew 92 percent last year to $1.1 billion, Ragatz said.
Eric Lyon, managing broker of the Vail Plaza Club, which is selling club memberships starting at $250,000, said he believes many higher-end buyers will be enticed by the Epiphany model.
“Nobody else is doing what they’re doing,” he said. “It’s the closest you can come to owning a second home without actually buying a second home, and the price point reflects that.”
Fulton helped create one of the first fractional ownership models at Telluride’s Franz Klammer Lodge and co-founded the Abercrombie & Kent Destination Club. He says Epiphany can achieve long-term success because its high price point allows each club to own all of its real estate outright and cover all operating costs.
Its guarantee works like this: Members get five week-long “high season use credits,” meaning that if they request dates at least 30 days out, a residence will be available. If the club is full, Epiphany will rent a comparable space for the overflow.
The 5-to-1-member-to-unit ratio is “a hard line in the sand,” said Fulton.
“We’re a very inefficient model. Our average annual occupancy is going to be 28 percent. But if you want to guarantee your members can use it whenever they want, that’s the kind of number that you can’t exceed.”
The company has begun to lure support, most recently in the form of a $40 million initial investment from RREEF, the real estate investment arm of the Deutsche Asset Management.
“They had a model that we thought was sustainable within the industry,” said RREEF director Jon-Paul Momsen. “We certainly intend to expand the platform with them.”
Epiphany clubs will offer amenities such as twice-daily housekeeping and pre-arrival grocery shopping.
Like several clubs, Epiphany’s members get a full refund if they choose to resign from the club, plus 60 percent of any net appreciation on the real estate.
The RREEF investment will help Fulton work toward his goal of opening at least 25 more Epiphany Clubs worldwide in the next decade. A third club in Punta Mita, Mexico, is in the works; other desired locations include New York and Aspen.
“I think that the market for the Epiphany Club model is worldwide,” Fulton said.
Staff writer Julie Dunn can be reached at 303-954-1592 or jdunn@denverpost.com.
