Rocksure is launching two new US funds. The Manhattan fund will buy apartments in New York City and the Liberty fund will buy apartments in 6 US cities. Investors in the funds can use the apartments during the life of the funds.
The Rocksure model is to gather groups of investors who buy portfolios of vacation homes. Rocksure launched its first fund, the "Alpha Fund" in 2005, which bought 6 luxury vacation villas around the world. During the life of the fund the investors can use the homes as their vacation properties and pay modest annual dues for the upkeep of the homes. At the end of the fund, typically after 10 years, the homes are sold and the investors share the bulk of any gains on the real estate.
This new fund will purchase four 2-bedroom, 2-bathroom apartments or town houses in Manhattan. Rocksure says each property will be spacious (approximately 1,500 ft². / 140 m².), luxuriously-furnished and centrally located. The target locations are Midtown x 2, Upper East Side and Tribeca/Lower Manhattan, but others may be considered.
The fund is divided into 60 full units of investment. The first 10 units are offered at a discounted price of $335,000 per full unit with subsequent units valued at an initial price of $350,000. No borrowings are planned. A full unit entitles an investor to an average of 21-nights each year at any of their properties and at times of their choosing, subject to availability. Half and three quarter units will also be available.
The annual management & maintenance charge (AMMC) will be $9,500 per full unit, and covers all the maintenance and upkeep of the homes. There's also a local concierge and relationship manager to help plan and organize each investors bookings and travel.
This fund will purchase six 2-bedroom, 2-bathroom apartments or town houses in New York, Washington DC, Miami, San Francisco, Chicago and Santa Monica. Like the Manhattan fund, each property will be spacious (approximately 1,500 ft². / 140 m².), luxuriously-furnished and centrally located.
The Fund is divided into 75 full units of investment. The first 10 units are offered at a discounted price of $280,000 per full unit with subsequent units valued at an initial price of $295,000. Again no borrowings are planned, so the fund will be debt free.
The AMMC will be $8,500 per full unit and is pro-rated for half and three quarter units. As in the other Rocksure funds, investors also have access to a relationship manager and local concierge.
The third fund that Rocksure is launching is the London Fund, a sort of twin of the Manhattan Fund. This new fund will buy four apartments in London. The target locations are Chelsea, Westminster, Kensington and Covent Garden, but others may be considered.
If you have always wanted that place in the city, these new funds may be the answer, rather than spending millions to buy a place on your own.
Rocksure founder and director David Rogers told me "the pairing of the funds is very deliberate; we see them, London and Manhattan, as a pair and are hoping some people may invest in both. Maybe people will take a half unit (investment) in each of them. We consciously designed them as a pair. The model is the same and they will have similar properties to each other."
He continued "Other clubs and residence funds are aimed at the family market, whereas our apartment funds tend to be aimed more at empty nesters. Investors tend to be 55+ year old, and their children have left and now they want to explore in a way that they haven't been able to (while little Johnny was at home)."
David also manages three villa funds. The Alpha and Bravo funds have been fully sold out for a few years, and the current fund taking in new investments is called the Crystal Fund which has purchased its first two properties, in Andalucia (Spain) and Antigua. The other apartment fund that is open is the Capital Fund which is buying residences in ten European cities. "The US Liberty Fund is also a sort of twin to the Capital Fund in Europe" noted David.
With the launch of these two new Rocksure funds, Alisatair Ballantine is joining as Chairman of Rocksure USA. Alistair has spent virtually his whole career in the luxury travel business. He set up and ran Abercrombie & Kent in the US for 25 years and then spent several years helping to grow some of the world's most prestigious hotel brands.
Talking about the economics of an investment in the Rocksure funds, Alistair noted that the Capital Funds apartment in Paris is like a 2 bedroom presidential suite at a 5* hotel. He added that suites like this cost between Euro 3,000 to Euro 6,000 per night.
SherpaReports own quick survey of pricing for 2 bedroom suites at 5 star hotels in New York, shows the rates varying from $2,000 per night to over $4,000 per night. So if you are looking for the space and privacy that a 2 bedroom apartment provides, these funds can certainly be an economic option.