Here’s an interesting new resort category being proposed in Florida. The idea of developing a resort with thousands of homes built specifically for vacation rental is unique as traditionally, vacation rental homes are owned by individuals and not generally in the same geographic area.
Published by: Tony Wilbert/CoStar News
Published date: January 2021
Cayman Islands billionaire Ken Dart is planning a $1 billion redevelopment of a former golf resort near Disney World in Florida that his U.S. real estate company is betting would create a new rental category that captures pent-up demand for vacation homes when people start to regularly travel for leisure again.
Dart Interests, the U.S. arm of the Dart family operation based at Camana Bay in Grand Cayman, announced plans for Evermore Orlando Resort, a 1,100-acre redevelopment of the Villas at Grand Cypress in southwest Orange County, Florida. Dart Interests had closed the Villas at Grand Cypress just before the coronavirus pandemic hit in anticipation of launching Evermore.
The billion-dollar bet is centered on the belief that the vacation rental and leisure travel markets will bounce back over the next two years. If the project is successful, Dart Interests could develop similar projects in markets less affected by seasonality across the United States, such as Charleston, South Carolina, where it has other operations. Other developers probably will be watching how it unfolds and could adopt the concept of building resorts specifically for people who want to rent vacation homes with resort amenities as well.
The concept is not without risks. If leisure travel does not return to prepandemic levels or the coronavirus changes the types of accommodations people seek, the large investment could be imperiled. And completing such a large project is often filled with unexpected hurdles. That said, with the backing of Ken Dart, Dart Interests will be the sole owner of Evermore and will not use debt to fund the project. Also, Dart is known for its penchant for long-term projects and being patient with them.
The idea of developing a resort with thousands of homes built specifically for vacation rental is unique, said Peter Ricci, a professor at Florida Atlantic University and director of the school’s hospitality & tourism management program. Traditionally, vacation rental homes are owned by individuals who own between one to to 20 properties not typically in the same geographic area.
“There’s nothing on this side [of the Orlando market] that’s sparked anybody’s interest,” Ricci said in an interview. “It’s really an area of a hodgepodge of rentals.” He adds that developing vacation rentals for multiple families could make sense, especially from a pricing standpoint.
The Evermore plans alone show the size, and inherent challenge, of the bet: They call for a large-scale resort with as many as 10,000 bedrooms in rental homes and flats centered on a 20-acre artificial tropical beach with an 8-acre Crystal Lagoon water feature that would be the first in the Orlando area. Miami-based Crystal Lagoons sells its self-cleaning technology to commercial and residential developers interested in swimming pools with beaches that look more like lakes than swimming pools.
Evermore also seeks to include a 433-room Conrad Orlando hotel by Hilton that would include dozens of suites.
Dart is a Michigan native whose family owns Dart Container, a major maker of food-and-beverage packaging, particularly foam cups and containers. He’s worth $6.42 billion, according to the Bloomberg Billionaires Index. He renounced his U.S. citizenship and is the largest private developer in the Cayman Islands. His Cayman-based company, Dart Real Estate, is known for the country’s largest-mixed property called Camana Bay and the new Kimpton Seafire Resort + Spa. While Dart Real Estate grows in the Caribbean country, Dart is also expanding his real estate business in his native country with major projects including Evermore.
The first phase of Evermore is expected to cost about $500 million and contain nearly 1,500 bedrooms in vacation rental homes, including 69 houses ranging from five to 11 bedrooms designed for extended families who travel together. The resort plans also call for 76 four-bedroom flats, 41 two- and four-bedroom villas and the luxury Conrad hotel.
Chris Kelsey, president of Dart Interests, formerly known as Third Palm Capital, said Evermore would be the first wholly owned, large-scale community in the United States of purpose-built vacation rental homes that are operated to hotel-quality standards and have resort amenities available.
“We’ve taken the vacation rental model and I think we’ve solved the real core problems of vacation rental, particularly in Orlando, where the universe of vacation rentals is quite large, tends to be of lower quality and tends to be in lesser neighborhoods,” Kelsey said in an interview. “Innovation occurs pretty slowly in real estate. I think this one qualifies as a legitimate innovation in how we develop product.”
The coronavirus hammered the leisure and business travel markets in 2020 as people canceled or postponed vacations to lower their chances of getting the deadly virus. Dart Interests is betting the market will have rebounded by the time phase one of Evermore opens in the summer of 2023.
“We think that our timing is going to be really good,” Kelsey said. “There’s going to be a massive amount of pent-up demand. Small group and business travel will be on a huge upswing.”
Moreover, Kelsey said, Evermore is aiming to offer leisure and business travelers “a brand-new, bright-and-shiny resort,” as opposed to a property with owners that have not been able to spend money on upkeep because their revenue dropped dramatically during the pandemic.
Kelsey said multigenerational families who travel to the Orlando area would be able to rent large vacation homes at Evermore for an average of about $125 per room, or less than half of the cost of comparable hotel rooms in the area. “So you’ve got the consistency of a hotel experience but the pricing model and benefits of being able to rent a home,” he said.
Kelsey also acknowledged that another challenge will be in executing on the concept: The project won’t be successful unless it can achieve consistency of the quality of the rentals, he said.
“Our approach solves the No. 1 problem for vacation renters: uncertainty in the quality of the home,” Kelsey said. “Almost all vacation rentals are owned by individuals, each with their own unique tastes and willingness to maintain the properties.”
Also, Evermore is designed to try to provide its renters “an experience that’s really an oasis from all of the energy and activity” renters engage in during a day at the area’s theme parks, Kelsey said.
Dart Interests plans to break ground on the Conrad hotel in the first quarter. Bookings for Evermore are scheduled to begin in 2022 with the first guests and grand opening expected in the summer of 2023.
The property’s existing Scottish links-style golf course is expected to remain open for play throughout construction, and a new, 18-hole, Jack Nicklaus-designed course is planned to open with the resort.