(Atlanta, Georgia) – May 18, 2020 – Even in the midst of a global pandemic that has decimated the travel and hospitality industries, there are a handful of companies that are poised for growth. Equity Estates, a Luxury Residence Fund offered via private placement that provides investors the opportunity to own and enjoy luxury real estate, is one such company. Launched in 2006, the company grew by double digits during the last recession and is poised to see similar growth in the current environment thanks to increase demand for private residences when traveling and the prospect of buying opportunities for the real estate portfolio.
Equity Estates secured enough early in the first quarter of 2020 to launch their fourth vacation real estate fund and subsequently surpassed the minimum requirement by 30%, raising a total of $4 million. In addition, the company is experiencing strong demand for their domestic properties, which comprise 60% of their portfolio. In fact, some investors chose to shelter in place in Equity Estates portfolio homes.
“It was delightful and we felt grateful being able to do that,” said Loren Cook of Houston, Texas, who invested over ten years ago into an earlier fund and sheltered in place at the Equity Estates Hilton Head residence for just under a month.
Philip Mekelburg, CEO and Founder of Equity Estates, says that investors care most about how Equity Estates is cleaning and disinfecting their homes and feels that will be a trend.
“Well maintained private homes will lead travel demand in the luxury market,” said Mekelburg.
“Equity Estates has a strict program to support safe travel experiences in our homes including turnkey sanitizing cleaning routines that cover every doorknob and cabinet pull.”
Analysts and experts industry-wide agree with Mekelburg. A recent industry article in Seer Interactive indicated well maintained private homes are poised to thrive in the post-COVID-19 environment and Skift Research’s April U.S. Traveler Sentiment Report indicated 41% of travelers would prefer a private residence accommodation during their vacation, up from 25% in January 2020 prior to onset of the pandemic.
“Throughout the ages, people travel in good times and bad. Those that have the money may be ready for some binge travel to make up for lost time,” added Mekelburg.
The real opportunity for growth for Equity Estates in not only in how their members use the real estate portfolio now, but in how Fund IV is poised to get a head start on the portfolio’s appreciation objectives. Fund IV is slated to raise approximately $50 million and acquire up to twelve vacation residences each valued between $2 million to $5 million. These homes will be located in coveted destinations around the
world including beach, mountain, metropolitan and leisure settings which presents a significant buying opportunity given the current environment.
“The value of the dollar is very strong right now making foreign buying opportunities extremely attractive and when we find sellers challenged by the lack of AirBnB rental activity, we will find some steals,” said Mekelburg.