This article summarizes the program of Lifestyle Asset Group, developed by a team of vacation home industry veterans to respond to the desires of today's fractional vacation home purchasers. The Program offers ownership in a portfolio of vacation properties.

Vacation home real estate, as with most products, has evolved over the years to meet changing market conditions. What began as the proverbial cabin in the woods owned by a group of friends morphed into condominiums, timeshares and condominium hotels to incorporate professional management, increased amenities and services and more saleable price points.

These were followed by fractional ownership to offer a higher end shared ownership product and beginning in the mid-1990's by Private Residence Clubs, the highest end of the fractional ownership market segment, combining real estate ownership with the services, amenities and vacation experience typical of a fine club.

PRCs were then followed by destination clubs, offering a network of properties available to the purchaser, but generally not offering real estate ownership, which generally remained in the developer/sponsor.

It soon became apparent that the vacation home buyer, basically a real estate purchaser, wanted real estate equity in addition to the variety of a network of properties. In the current climate, the desires of vacation home buyers have evolved further. These include (a) greater cost consciousness; (b) greater focus on the security of his/her investment; (c) a more simplified usage system than has been typical of most shared ownership; (d) a structure where the interests of the developer/manager are more aligned with those of the buyer, rather than simply being a seller of real estate; and (e) some comfort on an available exit strategy when vacation plans inevitably change.

The Lifestyle Asset Program has been developed to provide this desired profile. The program offers the following benefits, the combination of which is unique in the shared ownership market segment and is especially responsive to current market conditions:

1. Lower Ownership and Operating Costs

The cost of Luxury Asset Group ownership and operation is lower than in shared ownership generally because:

 a.        Cost of Ownership
 The cost of ownership is based upon the actual acquisition cost of the Residences without the markup traditionally found in shared ownership.

 b.        Cash Purchases
 All Residence purchases will be in cash, increasing negotiating leverage with current owners to further enhance the ability to buy favorably in the current buyer's market.

 c.        Debt Free Acquisitions
 All Residences will be acquired debt free, reducing expenses by eliminating costly financing charges.

 d.        General Maintenance Fees
 General maintenance fees will be reduced since they reflect only the services necessary for management and upkeep of Residences, leaving each Owner the option to purchase only those additional services desired.

2. Increased Real Estate Security

Owners hold an undivided interest in a portfolio of Residences as opposed to an interest in one Residence only. Accordingly, their security is maximized because they are exposed to less real estate volatility and reduced risk on resale.

3. More Flexible Usage Rights

Owner usage rights are in a variety of Residences and destinations, not restricted to the use of only one Residence. Usage rights are based on a simple first-come, first-serve basis. Owners may make reservations for each year as far in advance for as long a period of use as desired, choosing any arrival or departure day and subject only to availability and simple reservation policies. This is unlike most other vacation ownership forms which have complex and rigid use.

4. Performance Based Management

Management compensation is based solely on performance; namely, only upon acquisition, management and projected resale. This provides management the incentives to make the best purchasing decisions, ensure owner satisfaction and sell Residences at the end of the Agreement Term at the highest possible price. This approach is fundamentally different from most other developers who bundle their profits into the initial sale and thus are free of obligations to Equity Owners thereafter.

5. Transparent Disclosure

Lifestyle Asset Group Management will furnish all Owners with quarterly financial statements and annual audits, accompanied by competitive market analyses allowing ongoing portfolio valuation and report aggregating satisfaction data from each Owner's stay.

6. Lifestyle Asset Group Business Plan

The shared ownership industry has experienced significant growth over the past 15 years and has performed well in current economy. The Lifestyle Asset Group business plan is to expand operations. Given the additional benefits to Owners in the Lifestyle Asset Group program, this additional growth can be reasonably expected and the business plan is to expand operations.