Fractional Vacation Homes Are the Way of the Future

Ostentation may be dormant for the moment, but families still want their children to think back on luxe vacation memories like camping under a Frette comforter. Given the down market, a second home may no longer make financial sense. And, these days, who really gets more than three weeks of vacation anyway? Enter fractional home ownership. Often confused with time-shares, fractional ownership gives owners deeded interest in a property—with all the benefits yet none of the headaches associated with home ownership. “Two years ago, people would wrinkle their nose and say no thanks, as if fractionals were beneath them,” says Rob Harper, head of real estate development for Dallas-based Unity Hunt, owners of The Residence Club at El Corazon de Santa Fe. “Today, those same people are telling me that fractional ownership makes sense.”

Fractional sales are starting to perk. “Sales were horrific until two months ago,” says Ed Schnatterly, director of The Phillips Club in New York City. “We’ve seen a spike in closings and sales, and we will have our first price increase in 18 months.” When The Phillips Club opened in 2001, its first buyer was from Texas. Now at least 25 Dallas families own an eighth of a home across the street from Lincoln Center, including the Garrett Boones and the Don Hodges. Sales have also picked up at San Francisco’s Ritz-Carlton Club and Residences, where you can net a one-bedroom in Union Square for three weeks out of the year for about $185,000. Or you can smell sweets 24/7 inside a landmark chocolate factory at the Fairmont Heritage Ghirardelli Square, where one-tenth of an ownership provides at least 35 days in a building that has undergone a multimillion-dollar historic renovation. Most fractional developers team up with hotel amenities. At Ghirardelli, you get designer interiors, concierge, housekeeping, private chef, exercise spa, and even a Lexus 470 to haul you around town. Starting price: $185,000.