Fractional real estate in San Francisco
A reader asks:I have seen the term fractional real estate used in newspaper articles, etc but do not quite understand it. Can you please explain what fractional real estate is?
Our reply:
Fractional ownerships have been around awhile, particularly in vacation areas. Similar to time shares, developers have recently begun to offer these to San Francisco residents. The Ritz Carlton was one of the first to offer fractional ownerships to capitalize on the condominium market and owners who wanted to own something in the City, but didn't want the burden of owning a second home.
Carol Lloyd, of the San Francisco Chronicle, addressed the nuances of this type of ownership in her quirky January 26th column. She likens this new real estate twist to a ordering a Starbuck's beverage:
Lately, developers have been innovating on the condo concept like it's a Starbucks beverage. Grande? Foam or no foam? Soy, 2 percent, caramel, peppermint, raspberry? Most of the new products -- like the fractional condominiums of the Ritz Carlton and the ultra-luxury condos planned for Rincon Hill -- capitalize on the abundant resources of the richest of the rich.
By introducing San Francisco to its first fractional condominiums, the Ritz Carlton Club and Residences (on sale now and slated to be finished in November) have discovered what one might consider an unlikely niche.
Sometimes referred to as high-end time shares, fractional condos allow people to buy a percentage of the property -- say, 1/12 -- which gives them access to the property one month out of the year.
Unlike many of the negative articles that the San Francisco Chronicle publishes about the real estate market, this one does a good job of explaining the offering and is quite informative. There is also a site called San Francisco New Developments which lists many of the current building projects going up in the City, some of them offering fractional ownerships.
- Mick Orton
posted by SFResidence.com @ 8:31 AM
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