Harbor Hill Condominium Trust filed for bankruptcy and the HOA was acting as if the land asset was theirs to dispose of as part of the bankruptcy. Lemonjuice stepped in to remind all parties that the real estate of Harbor Hill belongs only to the owners of Harbor Hill timeshares; sale of the real estate should be concluded by owners, and not the bankrupt Trust. Bankruptcy sale for an asset not owned by the Trust could violate property rights and muddle the title. Lemonjuice Capital worked with the Trustee and the Courts to properly terminate the timeshare regime and ensure that the owners in good standing benefitted from their ownership. Lemonjuice also bid in a public foreclosure auction for defaulted Harbor Hill timeshares and acquired some of the lots of debts as well as provided a tender offer for some owners who were not interested in waiting out the entire process before getting paid.
Beech Mountain, NC
Cedar Village Board of Directors proactively sought a solution for this legacy timeshare property, which was losing owners and accumulating bad debt. They discovered Lemonjuice Capital who proposed a tender offer process. A tender offer often occurs when an investor proposes buying shares from every shareholder of a publicly traded company for a certain price at a certain time. Such an approach had been unheard of in the timeshare industry. With an 84% vote, owners chose to move forward with the tender and move towards termination. Many owners accepted the tender offer, thankful that they were allowed to “exit with dignity”. A few owners decided to wait until the final sales to get a distribution of the proceeds. Lemonjuice did all the title research to assure clean title and the timeshare regime was terminated. The property will sell as wholly owned condominiums in Spring 2019.
Ocean Beach Club
New Smyrna Beach, FL
When Ocean Beach Club was developed in 1980’s, the developer retained the management contracts. These contracts were drafted by the developer for the developer – giving most of the choices and control to the management. Those contracts were later resold multiple times and it became clear that the owners were being shortchanged. The Association wanted to have new management arrangements where the Board and owners were in control of more decisions. They turned to Lemonjuice Capital for funding to buy out the legacy management contracts. In addition, an affiliate of Lemonjuice Capital bought out all of the management company’s voting in the resorts – providing needed capital for the Assocation. The resort is now self-managed at a lower cost and with a focus on what’s best for the owners.
Myrtle Beach, SC
With several years of questionable management, the Yachtsman Board decided to take control. Carol Simpson, President of the Board, replaced the management company and also brought in an outside investor, Alex Krakovsky. Alex is president of Lemonjuice Capital, a real-estate invest¬ment group with expertise in working with legacy resorts. Lemonjuice Capital bought over 800 intervals from the Association. This gave The Yachtsman a much-needed cash infusion of $1.5 million. This cash gave the Association some breathing room, allowing them to address deferred maintenance and make some strategic plans for the best and highest use of the property. The idea is to right-size the timeshare portion of the property for sustainability by converting some units into wholly-owned condominiums. Lemonjuice will complete the title research needed for the eventual sale of individual condominiums. Additionally, Alex serves on the Board providing his expertise in solutions for common issues faced by legacy timeshare resorts and has brought in a robust rental program to the property to keep heads in beds throughout the year – not just high season.
Borderlinks I and Villas of Ocean Pines
Ocean Pines, MD
A community that was always mixed with whole ownership and timeshares was facing problems. Borderlinks timeshared units are split between two associations, Villas of Ocean Pines (VOP) and Borderlinks I Timeshare Association aka “Atlantic Resorts” (BTIOA). 53% of VOP timeshares are paying maintenance fees. BTIOA, however, with just 38% payment rate. As fewer people pay, those remaining must pay more. This, in turn, causes more ownership flight. There is no resale market for any timeshares, except for the very prime weeks. Ageing owners give up their units or simply stop paying. Lemonjuice Capital bought out the prior management and put in place some more aggressive procedures in addressing the issues. Adding a rental program with dynamic pricing and full reach to all the online travel agencies (OTAs) more fully utilized the property year-round. Lemonjuice Capital also bought large portions of Association owned inventory and provided a tender offer for some owners. Like at the Yachtsman, this influx of cash allowed the Boards to start addressing some long-deferred maintenance. Lemonjuice Capital has also extended a line of credit for larger projects that cannot be accommodated within the budget. Working with the Boards, the plan is to right-size this resort. Right-sizing converts some units to wholly-owned condominiums and consolidates the timeshare owners into the correct number of units.
Ocean City, MD
An amazing, waterfront resort near tons of activities and restaurants, Bay Club had let the physical condition of the resort deteriorate. Lemonjuice Capital bought many of the Association owned weeks – providing some of the capital needed to upgrade kitchens, reconstruct the balconies, and give the outside a facelift with paint and landscaping. Also, Alex serves on the Board providing his expertise. Together, they put out an RFP for management and have started making changes that the owners requested through surveys. This year, Bay Club has introduced a rental pool for all owners that will keep the resort full, the rentals equitable, and the oversight consolidated.