1/9 of this luxury home could be yours

Erica Solvig
The Desert Sun

The Coachella Valley's fractional ownership developments continue to garner buyers' interest while the overall market struggles.

The Residence Club at PGA West in La Quinta and Stone Eagle in Palm Desert have seen buyers looking for a second home in the desert but not wanting to deal with year-round maintenance.

Their answer: fractional ownership, where furnished luxury homes are sold in one-ninth shares and stays are managed like timeshares.

But unlike timeshares, the buyers actually own part of the home, paying property taxes and receiving the benefits of owning real estate.

"It's the Bel Air of the timeshare business," said Ted Lennon, developer of Stone Eagle.

"It's owning just what you need. A lot of people who own these own other places, too."

The three homes at Stone Eagle are under construction and should be completed by October. Developers have sold six shares - or two-thirds of a house.

"People want unlimited access to a second home, but they don't want a second home sitting here in the desert unused for six months out of the year," The Residence Club developer Marc Bailes said.

About 40 percent of The Residence Club has sold since going up for sale in 2006. Nine of the 117 sales were this year.
Seventeen homes are built. The final 15 villas will be built as demand continues.

Shares at both developments start at about $300,000.

Clients for these homes are typically wealthier.

Bailes said they're willing to invest in a "discretionary purchase" like a fractional ownership despite the current housing market.

"They're not as affected with these short-term market changes as other people," Bailes said.

The desert has just begun to see fractional ownership developments.

Officials with the local Building Industry Association weren't aware of any other developments that offer this feature.

The trend started in 1993 and has "gained considerable growth and consumer acceptance," according to industry tracker ResidenceClub.com. Big names such as Marriott and Ritz-Carlton have invested in the concept.

Lennon and Bailes said they plan to build out the rest of their developments. Neither have immediate plans for another.