Equity Estates

One of the industry's fastest growing destination clubs, Equity Estates is a member-owned company that plans to ultimately own between 43 and 50 homes and include no more than 300 members. Despite near universally considered an equity destination club, Equity Estates is quick to distance themselves from the label and refer to themselves as a "luxury residence fund."

Equity Estates functions as a Regulation D exempt security where members are in essence owners of the properties of the club. Based on this model, the club may only work with accredited investors and cannot actively market their club. Despite the restrictions placed on the club's marketing, Equity Estates has quickly emerged as one of the leading clubs in the industry.

Founded in 2006 and launched in 2007 by Adam Capes and Philip Mekelburg, the club was able to sell 17 memberships prior to even acquiring a residence, due notably to the clubs operating model. Properties are acquired debt free and member's capital contributions, the equivalent of a membership deposit, are used for two different functions. Operating under strict covenants, the club is required to allocate 80% of the capital contribution towards purchasing new real estate and the remaining 20% is used for operating expenses. The club's annual dues completely cover property taxes, insurance, maintenance, HOA dues, and other costs associated with each home.

Based in Atlanta, the club plans to liquidate their real estate assets 15 years after the inception of the club at the beginning in 2021. The club will use the funds to repay members their outstanding membership deposits and a portion of the proceeds. "We have a five year window to liquidate some or all of the fund's real estate holdings. We expect a normal selling market, but if we are in another real estate downturn, the five year window allows us to wait for real estate to recover," said President and Co-founder Adam Capes.

The club has two different membership plans, full and half members. Full members are entitled to 30 nights of annual travel and the club models to never exceed a seven to one member to property ratio. After two years of membership, members can resign their membership on a one in, one out basis and receive the current contribution capital price less a 7.5% transfer fee.

During the fourth quarter of 2008, when industry power players High Country Club and LUSSO Collection were both forced into bankruptcy and nearly every other club was forced to restructure their financial and organization makeup, Equity Estates quietly enjoyed thier best quarter of the year, growing the club over 50% from 2007 and brought in nearly $3 million in member interests in December of 2008 alone.

MEMBERSHIP PLANS

The leaing equity based destination club Equity Estates offers two different offerings to members: Full and Half Memberships. Each of the two has their own usage, pricing, and resignation policies, but both have remained popular options for accredited investors looking at Equity Estates.

Ultimately, Equity Estates will liquidate their real estate holdings in 2021 and repay members' capital contributions. By this time, Equity Estates plans on owning between 43 and 50 properties available exclusively for their 300 members.

Full Membership

For a one-time capital contribution of $350,000 and dues of $16,500 annually, full members are provided with 30 nights of annual access to the growing Equity Estates' properties.

Full members looking to resign their membership receive 92.5% of the current value of their membership and can make their reservations as far in advance as they wish, but cannot exceed 23 nights of reservations at one time.

Half Membership

For a one-time capital contribution of $185,000 and dues of $9,250 annually, half members receive 15 nights of annual access.

Like the Full Membership, Half Memberships can be redeemed for 92.5% of the current value of the membership, but pay a non-refundable $10,000 administration fee. Half members can make their reservations as far in advance as they wish, but cannot exceed 11 nights of reservations at one time.

MEMBERSHIP PRICING

Limited to accredited investors, Equity Estates will offer membership in their equity destination club to just 300 full members. In 2021, the club will begin selling their collection of 43 to 50 elite properties and distribute the proceeds to members.

Equity Estates offers two different membership plans: Full and Half Memberships.

While each are popular options within the club, both provide for different levels of usage, have different pricing, and resignation policies.

Full Membership

Full members pay a one-time capital contribution of $350,000 to join the club. Members are provided with 30 nights of annual access to the growing Equity Estates' properties.

Half Membership

Half members make a capital contribution of $185,000 to join Equity Estates. Members are allowed 15 nights of annual access.

Half Memberships can be redeemed for 92.5% of the current value of the membership, but pay a non-refundable $10,000 administration fee. Half members can make their reservations as far in advance as they wish, but cannot exceed 11 nights of reservations at one time.

ANNUAL DUES

One of the fastest growing equity based destination clubs in the sector, Equity Estates offers two different membership plans to join the club: Full and Half memberships.

Full Membership

Full members within Equity Estates receive 30 nights of annual usage at the club's ever growing collection of luxury vacation properties.

Members pay $16,500 per year in annual dues.

Half Membership

For $9,250 per year in annual dues, Equity Estates half members are provided 15 nights of annual access to the club's properties.

Both the Full and Half Memberships are only available to accredited investors due to Equity Estates' structure as a private offering.

PROPERTIES

Averaging $3 million each, each of Equity Estates' properties are made available exclusively to members. One of the fastest growing clubs in the destination club sector, Equity Estates' properties typically feature four or five bedrooms and are in excess of 4,000 square feet.

Limited to just 300 full members, Equity Estates plans to ultimately acquire between 43 and 50 properties in some of the world's most sought after destinations.

Currently, Equity Estates counts the following properties in their portfolio.

• Turks & Caicos
• New York, New York
• Deer Valley, Utah
• Hilton Head, South Carolina
• Telluride, Colorado
• Los Cabos, Mexico
• Inlet Beach, Florida
• Naples, Florida
• La Jolla, California
• New York, New York

Beginning in 2021, Equity Estates will begin to sell the club's properties, repaying member's their capital contributions and a portion of the additional proceeds.

USAGE

One of the destination club industry's leading equity based clubs, Equity Estates offers accredited investors two different membership plans.

Full Membership

Full members receive 30 nights of access each year. Members may stay at one of the club's properties for as little as one night or as many as 18 consecutive nights.

Both Full and Half Memberships allow member the ability to make reservations as far out into the future as they wish, but full members can only have 23 nights reserved at a given time. As the member travels, those nights come off the reservation cap and the member is again allowed to add new reservations.

Full members are entitled to one holiday reservation annually.

Half Membership

Not surprisinly, half members receive half a full member's inventory of annual usage. Half members are provided 15 nights of annual access each year to the Equity Estates portfolio of properties.

Like the Full Membership, Half Memberships allow members the ability to make reservations as far out into the future as they wish. Half members can only have 11 nights reserved at a given time. As the member travels, those nights come off the reservation cap and the member is again allowed to add new reservations.

Half members can stay at a property for as few as one night or up to their full 15 nights of annual access.

Equity Estates maintains a member to property ratio of seven to one and states "the portfolio of properties will likely have open availability of 75% or more."

HOLIDAY ACCESS

One of the world's leading equity destination clubs, or as they like to call themselves, a "luxury residence fund," Equity Estates quickly established themselves as a player in the highly competitive industry.

Limited to just 300 full members, Equity Estates will eventually acquire between 43 and 50 luxury vacation homes throughout the world available exclusively by members. Offering two different membership options, full members are entitled to 30 nights of annual travel privileges and half-members receive 15.

"To give fair access to all members for holiday travel, Equity Estates conducts lotteries twice a year for holidays occurring during the first and second halves of the year. Due to our low member-to-property ratio and the fact that many families already have annual plans during times like Christmas or Spring Break, members will typically get one of their top choices for holiday travel."

"We conduct two lotteries per year, one in July and one in January. Our July lottery is for holidays in the first part of the year and our January lottery is for the second part of the year," said club Co-Founder Adam Capes. "Nearly everyone that provided at least three selections got one of their top choices."

There are several different holiday usage structures used throughout the destination club industry, each with their own unique benefits and drawbacks.

MEMBERS

In a time when many destination clubs were filing for bankruptcy and ceasing operations, Equity Estates would post their best months in history in terms of new membership sales.

One of the destination club industry's fastest growing clubs, Equity Estates counts nearly 100 member owners in their equity club. Limited to just 300 total members, Equity Estates will ultimately include between 43 and 50 luxury residences available exclusively to members.

Beginning in 2021, Equity Estates will begin to liquidate their real estate holdings and distribute a portion of the proceeds to members. "We have a five year window to liquidate some or all of the fund's real estate holdings," said President and Co-Founder Adam Capes. "We expect a normal selling market, but if we are in another real estate downturn, the five year window allows us to wait for real estate to recover. Likewise, if we see a bubble in 2019 or 2020, we have a fiduciary responsibility to our business partners and could contact our members about the opportunity."

Equity Estates offers two different membership options: full and half equity interests. Full members receive 30 nights of annual access to the club's residences and half members receive 15 nights.

Dedicated to organic growth, Equity Estates is also one of a small number of large clubs that have not grown through mergers and acquisitions. "Equity Estates has grown organically through direct sales," said Co-Founder Philip Mekelburg. "Abercrombie & Kent Residence Club promotes an equity play, but they started by gobbling up two other destination clubs. Ultimate Escapes is a conglomerate of a bunch of other clubs. There is strength in growing organically."

RESIGNATION

Ultimately, Equity Estates plans to own between 43 and 50 properties around the world, each in the $3 million range.

In 2021, the club will begin to sell the properties within the portfolio and repay members the initial capital contributions paid to join the club, plus a portion of the additional proceeds.

"We have a five year window to liquidate some or all of the fund's real estate holdings," said President and Co-Founder Adam Capes. "We expect a normal selling market, but if we are in another real estate downturn, the five year window allows us to wait for real estate to recover. Likewise, if we see a bubble in 2019 or 2020, we have a fiduciary responsibility to our business partners and could contact our members about the opportunity."

For members who elect to resign their membership prior to the planned 2021 liquidation date, members are eligible for redemption after 24 months with the club. When a member elects to resign their membership, they receive 92.5% of the then current value of their membership. For every one new member that joins the club, one member will be redeemed from the club.

Half members looking to resign their membership prior to the 2021 liquidation date will also incur a $10,000 non-refundable administration fee.

In addition, Equity Estates also publishes that "a bank will provide a loan to qualified investors and take the membership interest as collateral, similar to a mortgage on your home."

EXECUTIVES

Created by a former destination club membership director and member, a seasoned corporate consultant, and a financial expert, all of the members of Equity Estates' management team bring an entrepreneurial spirit to their equity based destination club.

"Equity Estates was started because the founders recognized the appeal of owning and enjoying vacation homes around the world," the club writes. "By structuring the membership as an equity interest, its members are owners of the portfolio of luxury vacation homes acquired by the fund. Owners benefit from and participate in the 5 star concierge supported use of these phenomenal properties and in any appreciation of the real estate when it is sold."

In 2021, the club will begin to liquidate their real estate holdings and distribute 80% of proceeds to club members.

One of the fastest growing destination clubs in the industry, Equity Estates will accept 300 full members before that time who will have exclusive access to between 43 and 50 multi-million dollar vacation residences around the globe.

Adam Capes
President and Co-Founder

Philip Mekelburg
Chief Executive Officer and Co-Founder

Timothy Trankina Finance

Equity Estates also has an Advisory Board composed of members that provides "advice with respect to investments, financings, service related issues, and relationships with strategic partners."

The Equity Estates Advisory Board consists of:

Andy MacLellan
Board of Advisors Member

Stephen R. Gross
Board of Advisors Member

Timothy Trankina
Board of Advisors Member

Aaron Goldman
Board of Advisors Member

Janine Ellman Cifelli
Board of Advisors Member

Brennan Ryan
Board of Advisors Member

Michael Thompson
Board of Advisors Member

Tim S. Schrager
Board of Advisors Member

PARTNERSHIPS

Founded originally in 2006, Equity Estates has quickly risen through the ranks to become a major player in the destination club sector. Created by Adam Capes and Philip Mekelburg, two Cornell graduates, Equity Estates prefers the "luxury residence fund" brand over the more traditional "destination club" identification.

"Equity Estates was started because the founders recognized the appeal of owning and enjoying vacation homes around the world," writes the club. "By structuring the membership as an equity interest, its members are owners of the portfolio of luxury vacation homes acquired by the fund. Owners benefit from and participate in the 5 star concierge supported use of these phenomenal properties and in any appreciation of the real estate when it is sold."

"Enjoy all the benefits of owning vacation homes with none of the hassles. As professionals in the luxury real estate and hospitality markets, we have expertise in caring for homes that will appreciate, and be appreciated. So, when you arrive, all you have to do is enjoy."

Like many other leading equity based destination clubs, Equity Estates maintains a lean operational mentality that trickles down throughout the organization. As such, the club keeps much of the vacation experience provided to members in house.

One notable partnership available to Equity Estates members is a strategic alliance with The Hideaways Club, one of Europe's leading destination clubs.

"This alliance between Equity Estates and The Hideaways Club is ideal as it facilitates international growth for both companies and enhances the already stellar value proposition for owner members of both funds," said Capes when the partnership was announced early in 2010.

"Our companies have a common model and a common goal: to provide unparalleled vacations coupled with a sound investment, so it seems natural to create this strategic alliance for the benefit of our individual companies and our respective owner members," said Mike Balfour, Chairman of The Hideaways Club. "This is a unique exchange relationship in the industry and greatly enhances our opportunities for growth moving forward."

PRESS RELEASES

One of the destination club industry's leading equity based clubs, Equity Estates is structured as a Regulation D exempt security. Officially launched in 2007, the club has quickly become one of the fastest growing clubs in the industry, due largely in part to its business model.

Of each member's capital contribution paid to join, 80% is allocated towards real estate acquisitions and the remaining 20% used for the club's operations.

In 2021, Equity Estates will liquidate the club's real estate assets. At this time, Equity Estates plans to have 43 to 50 properties within their portfolio. Members will be repaid their original capital contribution paid to join the club and 80% of the proceeds from the sales of the properties.

Equity Estates Forms Strategic Alliance With The Hideaways Club
Date: January 11, 2010
Equity Estates and The Hideaways Club have announced a strategic partnership that will allow members of both club the ability to access the other club's collection of luxury real estate, creating a total portfolio of nearly 30 properties in 23 of the world's most prized destinations.

Equity Estates Adds Two Trophy Residences To Portfolio
Date: April 14, 2009
Following their banner fourth quarter, Equity Estates is proud to announce the addition of two trophy properties. Located in Telluride, Colorado and Hilton Head, South Carolina, each averages $3 million and are "sure to become owner member favorites" according to the club.

Equity Estates Posts December As Best Month On Record
Date: February 17, 2009
During one of the worst economic storms that the destination club sector has seen since its creation, Equity Estates has announced that they have had the best month in the history of their club and have doubled their enrollment in 2008 from their 2007 numbers.