Recently, the Equity Residences Managing Director Greg Salley was interviewed on WBBM-AM Noon Business Hour — a podcast about the economy and financial markets with some of the top experts in the nation. On the show, Greg answered common questions about the investment fund that covered topics such as destinations, travel services, and future plans.
Listen to the interview or read our transcript below.
Give us a thumbnail sketch of the investment fund.
We have a luxury real estate investment fund where we are raising $50 million to buy a portfolio of 20 homes all in different locations around the world. Investors can use the homes rent-free. In about a decade, we sell homes to return the original investment plus the profit from the homes.
So the idea is that this isn’t an investment like the stock market, you actually get to enjoy the investment when traveling?
Absolutely! You are going to some of the most beautiful places in the world like Turks and Caicos, Lake Tahoe, Hawaii — all over the place!
How do you juggle who gets to go when?
We use a very personalized approach to understand what is important to someone like going to the Caribbean a certain week or skiing in February in Park City, Utah. We are able to put the schedule together like a puzzle. We also have two affiliates that give us access to thousands of homes around the world, so if there is a conflict we can usually just grab another home at the same locations. We have little conflict in the end.
When they get to the luxury home, are they on their own for a family vacation or is there help?
We have concierge services that include pre-stocking groceries and private chefs that can come in to prepare meals or dinners. We have already planned dream trips for each location of what to do while you’re there that can be customized for each experience.
Are there any contingency plans for if there is an issue with the market and it happens to go down?
We have prime locations that we buy, so we are already up significantly. If we are in a down real estate cycle, the fund manager has the discretion to wait up to 2 years to avoid selling in the downcycle and wait for the next upcycle. They also would get 2 more years of access to those properties to travel.
So do you foresee people reinvesting after the 10-year profits?
Yes, a lot of our investors have already brought up that they would like to stay longer than the 10 years. We are launching a whole portfolio of funds, even though we already have 2 active now, there will be more in the future. People will be able to invest in multiple funds, which several of our investors have already done.
When you talk to the investors do you get new ideas of new locations where you may want to find properties?
Yes, we survey our investors to find out their preferences, and that factors into where we evaluate new locations to find the right investment opportunities.
Can you tell us about some of the locations?
We have homes in the Caribbean, Turks and Caicos, St. Johns, Bahamas, Florida, and Hawaii. We have mountain homes in Vail, Park City, and Tahoe. We have Italy, Tuscany too — we have homes all over the world!
