We spent some time on the phone recently with Michael Beindorff, COO of Exclusive Resorts, who walked us through the destination club’s real estate development plans for the next two years.

The bottom line: Exclusive Resorts boasts an impressive development plan that adds over 100 homes in 7 locations to their portfolio over the next 24 months. Each of these residences is custom-developed and owned by Exclusive Resorts. By 2008, the club’s portfolio will grow from 300 homes to over 400 homes, a 33% increase.

Here are the highlights for each location:

• Poro Poro, Costa Rica: 20 residences (3800 sq. ft, 4 bedrooms, 4.5 baths)
• Kapalua Bay, Maui: 28 residences (2,800 sq. ft., 3 bedrooms, 3.5 baths)
• Viceroy Resort, Anguilla: 11 residences (3,850 sq ft, 4 bedrooms)
• Ritz-Carlton, Grand Cayman: 5 condo units and 16 residences
• Arrabelle at Vail Square: 10 condo units (3 bedrooms each)
• Ho’olei, Wailea, Maui: 12 two-story adjoined townhomes (3 bedrooms each)
• Castello di Casole, Tuscany: 10 estates, each on 50-acre parcels (4,500 sq. ft., 4 bedrooms)

Helium Report Perspective:

Exclusive Resorts demonstrates their ability to partner with developers and resorts to build homes and townhomes from the ground up, giving them a lower cost basis, which should be good for their business model. The strategy also enables Exclusive Resort to influence the development in terms of home specifications and amenities.

The resort development plan signals an evolution of Exclusive Resorts’ model, now betting on more homes in “fewer” destinations so that they can provide home availability and cost-effective services, such as on-site concierge, and achieve economies of scale from the density of homes.

The cost of this approach will be probably be that Exclusive Resorts will not open as many locations where they can only acquire or develop only one to three homes. Also, in some locations, such as Maui, over 40 residences clustered together will probably have more of a “resort feel,” than stand-alone private homes.

The two ends of the destination club category are being defined more clearly now: one is the very small, boutique club, such as Solstice; the other is the large, diversified club, such as Exclusive Resorts, Private Escapes, or Quintess, Catch the Dream.

Over the next 6 to 12 months, the “mid-sized” clubs with 25-50 members will find it increasingly difficult to compete with larger clubs. Helium Report expects to see more consolidation in the industry as club’s assess their ability to provide homes to their growing base of members.

Images © Exclusive Resorts