Paul Poscente Outlines Future of M Private Residences

By: Destination Club News
Date: March 23, 2008

Following "good sales in the first quarter" and a "very positive response" from a recent direct mail campaign, M Private Residence and President Paul Poscente have updated members about progress on the club's real estate front with two new properties in Phoenix.

We are currently under negotiations for two 2500 sq. ft. 3 bedroom units in the renowned district of the Biltmore in Phoenix. The Fairway Lodge is a new development situated along the 10th fairway of the Biltmore Adobe golf course (one of two championship golf courses on the property), and is located adjacent to the Arizona Biltmore Resort and Spa. We have a rare opportunity to be able to purchase quality units in an area with so much to offer our shareholders.

The famed Frank Lloyd Wright designed resort began construction in 1929 and is still among the most desired places to stay in the area. Every president from Franklin D. Roosevelt to George Bush has stayed and played golf at the resort. The development and the location offers an unmatched experience for the Phoenix area.

Located approximately 15 minutes from Phoenix Sky Harbor airport, the Biltmore area is generally recognized as starting from 24th and Camelback and extending north to Thunderbird. The Biltmore Fashion Park, which is a 3 minute drive from The Fairway Lodge, is a well-known upscale shopping plaza with tenants from Macy’s to Saks Fifth Avenue, as well as a number of excellent restaurants. Continuing east from the Biltmore for an additional 10 minutes is the world renowned Scottsdale Fashion mall. In terms of an epicurean experience, restaurants like Morton’s, Roy’s, Capital Grill, Tomassos, Mastros, The Ocean Club, and Wrights, are all within 10 minutes of the units.

5 minutes north the Fairway Lodge is the Phoenix Mountain Reserve (North Mountain Reserve). The reserve is a set of local Phoenix Mountains with about 25 different hiking trails ranging from novice to expert. At 2,104 feet, North Mountain (Squaw Peak) is a Phoenix landmark in its own right. The North Mountain area offers more than summit climbs; an array of trails of all levels of difficulty offers something for everybody. North Mountain Park is open from 5 a.m. to 11 p.m. and offers trailhead parking and reservable picnic ramadas.

Another distinctive feature of the property (just across the entrance to the Fairway Lodge) is the Dr. Art Mollen Fitness path for hiking or biking. Celebrity fitness expert Dr. Art Mollen teamed up with the Biltmore and the City of Phoenix to develop a network of fitness paths (44 miles) running along the Arizona canal.

From enjoying the views of the city of Phoenix from your unit, having a swim in the infinity pool, to having a latte at an outdoor café overlooking the grounds of the Biltmore, to hiking and golf, this opportunity at The Fairway Lodge offers the ultimate Phoenix experience.

We are under negotiations for a ground floor unit and a third floor unit and should be able to reach some conclusions in the next 14-21 days. Given the fluid state of the local real estate market, complete due diligence has become of even greater importance. Deeper assessments of appraisals and more investigation of potential encumbrances is a necessary requirement in the current environment, and thus the purchase process takes more time.

We believe this opportunity represents a better alternative for our shareholders than that of Kierland. Also, to address pent up demand for this area we are attempting to purchase 2 units. The purchase of these condominiums does not represent a change in real estate purchase strategy. We will still be buying predominantly single family homes. However, this situation allows us to offer a unique experience for shareholders and purchase two properties to address availability.

Later in the club's newsletter, Poscente cites the advantageous scenario that M Private Residences has in the future regarding real estate acquisitions. "Policy changes by the Federal Housing Commission will loosen credit markets and allow for greater latitude in mortgage qualifying. Having said that the sins of the past will not be quickly behind us. Five or six times the historical average of real estate inventory will cause further increases in foreclosures before any tangible improvement. All this is good news for M in terms of purchase opportunity. It does however highlight the need for hyper due diligence in our purchase processes."

As Canada's largest destination club, M Private Residences has long focused on not only the luxury vacation experience, but responsible financial spending. While members of every destination club are always eager to have new properties available to them, monitoring the market to make the most efficient decision possible regarding real estate is a near requisite component of a well run destination club in today's changing markets.

While M Private Residences and other destination clubs are conducting "hyper due diligence" during their purchase process, you should also be conducting a thorough analysis of destination clubs you are considering prior to joining. For a list of suggested due diligence questions, a background about the destination club industry, and overviews about the sector's leading players, request a free copy of our Destination Club Guide.