|Marineland resort units sell out in less than 3 hours|
Posted by on December 09, 2005 at 08:26:15:|
Investors pay an average of $2.4 million for first 51 oceanfront villas and casitas to be built at former Marineland park site in Rancho Palos Verdes.
Pasadena financial adviser Robert Floe was among 51 people who plunked down an average of $2.4 million this week to purchase vacation properties at the planned Terranea Resort in Rancho Palos Verdes.
For Floe, 50, "The No. 1 reason is the beauty of the location.
"I also think it's going to be a good investment on a long-term basis for the real estate. And I also like the idea they're going to be able to rent them out."
Floe and the others who buy into Terranea can stay a maximum of 60 days a year at the luxury casitas on the craggy coastal bluff once occupied by the Marineland theme park.
Then they will reap about 60 percent of the rental fees the resort will charge guests who stay at the units the rest of the time.
The allure of an income-producing vacation property as well as the opportunity to get in on the ground floor of the county's only luxury coastal resort is why all 36 casitas and 15 villas put on the market Sunday sold in just 2½ hours for a cumulative $120 million.
"The location is fabulous and (I like) the opportunity to have a vacation property, but not to own something I have to hire housekeepers and maintenance people for," said buyer Dena Donahue, 47, a mother of three from Sunnyvale. "Where else can you buy (such coastal) property in Southern California?"
You can't, since there is no comparable resort, said Michael Hardisty, executive vice president of Brentwood-based resort developer Lowe Destination Development.
Still, Hardisty said he was "pleasantly surprised" by the overwhelming response.
"I would suspect that for our average buyer it certainly is their second if not their third or fourth home," he said. "People want to go some place within driving distance. They want to go some place safe and familiar with family and friends."
Most buyers are expected to use their vacation homes for about one month a year. A majority are from Southern California, although one is from Japan, Hardisty said.
The remaining 17 of the 32 casitas and 14 of the larger 50 villas will go on the market next spring. An on-site "Discovery Center" includes a full-size mock-up of a typical kitchen and dining area and information on different floor plans and furnishing options.
Prices are likely to spiral upward even further than the starting price of $1,950,000 for a casita and $2,950,000 for a villa that buyers paid Sunday.
For sale properties at luxury resorts have become increasingly common in the last five years, said Bruce Baltin, senior vice president for a hotel and tourism consulting firm retained by Lowe Enterprises.
Resort developers use the strategy to lower their financial exposure in the volatile industry, while consumers can couple an investment opportunity with a luxury vacation. It's the first time, however, that Lowe Enterprises has used the strategy, said Chief Executive Officer Bob Lowe.
What do casita and villa buyers get for their money at the $320 million resort?
They get access to three swimming pools and a 25,000-square-foot spa and fitness facility on the 102-acre site, which also boasts 400 conventional hotel rooms. Those are available at rates expected to start at about $350 a night once the resort opens early in 2008.
Trails along the mile of secluded coastline will connect to adjacent coastal paths and a secluded beach cove with private cabanas.
Amenities include 60,000 square feet of convention space, 6,000 square feet of retail space, several restaurants and either a driving range or small nine-hole course. (The addition of a driving range at nearby Trump National Golf Club has the resort's developers reconsidering construction of an approved driving range.)
While owners of the three-bedroom, 2,040-square-foot casitas are limited to no more than 60 days annually, buyers of the 1,850-square-foot to 2,800-square-foot villas may occupy their units for a maximum of 90 days.
Owners cannot stay more than 29 days in a row in the furnished casitas and villas.
Among the luxuries are two-car garages, private courtyards and terraces with hot tubs, top-of-the-line Sub-Zero and Wolf appliances, Alderwood kitchens with granite countertops and plasma television sets.
Lowe subsidiary Destination Hotels & Resorts will operate the property, one of almost three dozen luxury hotels and resorts in its portfolio.
Terranea is expected to generate an estimated $5 million in city taxes.
Floe, the financial adviser, hopes access to an affluent clientele will provide him with a similarly healthy return on his investment as well.
"What we'll do is build an advisory business down there, so we'll hold seminars at the resort," he said. "It doesn't hurt to be living right at the ocean either while you're doing that."
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