# [2008] Detailed Review:  Phillips Club NYC (part 1)



## Texan in NYC

Effective today, my wife and I are the happy owners of a studio in the Phillips Club, a fractional hotel/condo property located on the upper west side of Manhattan.  The property is located next to Lincoln Center in a desirable (if touristy) section of town.

*Building*

The Phillips Club was originally developed in 2000 by Millenium Partners, a developer/operator of various other luxury properties.  This project, known as Phillips Club 1, was highly successful, and was fully sold.  (For some reason, the earliest recorded sales I could find were in 2003;  before then, I think the building was an extended stay hotel, not a fractional property.)  The building is now controlled by the owner’s HOA.  I believe there are around 80 units in a mix of studios, 1BRs, and 2BRs.  

The project was so successful that Millenium Partners immediately embarked on a second phase next door, which shares common space with Phillips Club 1.  That project is known as Phillips Club 2.  I believe there are around 88 units in Phillips 2. 

Owners in both Phillips 1 and Phillips 2 have a 1/8th fractional, deeded interest in a particular unit;  thus, each unit is sold 8x by the developer.  On average, a 1/8th interest would equate to 46 days of use per year.  Each unit is covenanted such that other owners of the same unit type in the club may use your unit through the Phillips reservation system.  Thus, even though you have a “deeded” interest, upon check-in, there is no guaranty that you will actually stay in “your” unit.  

Units in Phillips 1 and Phillips 2 are served by a common infrastructure (e.g., concierge, 24-hour business center, residents’ lounge, limited storage for personal items, etc.)  Owners also have, during their stay, day pass access to the Reebok Club, an excellent gym nearby that is also operated by Millenium Partners.  (The Reebok club access is not protected by long-term contract or covenant, however, and should be considered an incidental benefit of the fact that Millenium Partners has the management contract at both properties.)

Units in Phillips 1 and Phillips 2 are NOT identical.  Phillips 2 units are, on average, slightly larger.  For example, the studios in Phillips 1 are approximately 500 sq. ft., while the studios in Phillips 2 are approximately 625 sq. ft.  Additionally, because it was more recently built, Phillips 2 has better furnishings (e.g., flat panel HDTVs, Bose Sound dock, etc.)  The stylistic décor is broadly similar (e.g., neutral colors, consistent photography décor, Herman Miller desk chair, etc.)  You can get a sense of the differences and similarities by comparing these photos:

Phillips 1 décor

Phillips 2 décor 

The studios also have one other significant difference:  Phillips 1 studios have a kitchenette only, whereas studios in Phillips 2 have a full kitchen.

I was impressed with the property during my walk through.  Original build quality is excellent, for example, all windows are triple-paned glass with no air or sound leakage.  Common areas are well kept.  The building appears to be conducting adequate opex.  The staff with whom I interacted were professional, courteous, and helpful.  Overall, I would describe the Phillips Club as a well-run W or a high end Starwood hotel—not tippy top grade (e.g., Mandarin Oriental), but upscale and more than adequate for brief visits to NYC.

*Other Privileges*

The Phillips Club enjoys no formal exchange program with any other properties.  However, Millenium Partners (for reasons unknown to me) has informally arranged exchanges with the Four Seasons Aviara north of San Diego, and the Four Seasons Troon in Scottsdale, both of which are also fractional properties.  I have no idea how Millenium does this.  This benefit, like the Reebok club, should be considered an incidental benefit, and not one protected by contract.  I have no visibility into how available exchanges actually are.

*Reservation Rules*

The Phillips Club reservation system works as follows:  

Once a year around May, residents have an opportunity to make an “annual reservation”, which is a 1 week booking (max)  for sometime in the next 12 months.  Some residents use the annual reservation to book ahead for peak times such as Thanksgiving, Xmas week, etc.  However not all residents opt to use the annual reservation in May because they cannot plan that far ahead.  Instead, they make the reservation later in the year.  However, when they do this, their annual reservation is granted on an as-available basis.  If there are conflicts among owners for the annual reservation slot, ties are broken using a rotating tiebreaking system in which in each year, owners have a different “priority number”.  I have been told that conflicts among annual reservation requests, and use of the tiebreaker rules, are rare.

In addition to the annual reservation, owners are permitted to place two “advance reservations” on the book at any time (excluding the annual reservation).  The advance reservations may be up to 1 week in length, but need not be.  Nor does the advance reservation need to begin on a certain day of the week.  Advance reservations are filled on a first-come, first-served basis.  You may change your advance reservation at any time, but you may never have more than two of them on the book at any time.  Note that under the rules, you are permitted to put both advance reservations on the book for the same week, in which case you would hold 2 units for up to a week.  Or you could put them back to back, in which case you would be permitted to stay in the club for up to 14 days.  The only way to stay longer than 14 days would be to use the two advance reservations in conjunction with the annual reservation.

In addition to the annual and advance reservations, owners may also place “short term reservations”.  These reservations must be made within 5 days of use, and can be no longer than 3 days in length.  Short term reservations are made on a space available basis.  If the short-term reservation is within 48 hours, if your unit type is full, and if the management company determines that there is likely to be excess capacity of a different unit type, the short-term reservations may be fulfilled with units other than the unit type you own.  For instance, the owner of a studio may be booked into a 1BR unit if no studios are available, and management determines that there is a surplus of 1 BR units.

Members may make reservations for non-members such as friends and family.  There is no charge for this.  Members need not accompany the non-members at check-in.  Members may NOT, however, rent out their units (without HOA approval, which I’m sure is never granted).  I’m not sure how the Phillips Club enforces the anti-renting rules, but if you are found to have violated the rules, the renter can be ejected by the club, and the club can commence legal proceedings against you including collecting its attorney fees.

Finally, while a 1/8th fractional interest on average works out to 46 days of use, the Club has no explicit limit on how many days you may stay per year.  In the past, some members have used in excess of 46 days (while obviously, most members use fewer than their allotted amount).

*Fees*

Like any condo, owners pay a monthly HOA fee.  25% of the fee goes to paying property tax;  25% goes to building a reserve fund;  and the remainder of the fee is used for common charges.  Studio apartments in Phillips 1 have maintenance fees of $3600/year, and studios in Phillips 2 have maintenance fees of $4900/year.  

Phillips 1 maintains a large reserve fund at the moment, however I will not reveal the size of the fund on a public forum.

Increases to monthly fees in Phillips 1 are determined by the HOA, since the building is now entirely owner-occupied and owner-controlled;  increases on Phillips 2 are controlled by the developer at this point, but will revert to the HOA after a certain percentage of units are sold.  Historically, the increases in maintenance fees for Phillips 1 have tracked the rate of inflation;  the exception to this was when Mayor Bloomberg implemented a large property tax increase in 2002.

In addition to monthly fees, owners pay certain usage fees.  Studios are charged $21/day for mandatory housekeeping, and a $40 cleaning fee upon check-out.  (Larger units are charged more.)  If the owner has taken advantage of the portable wardrobe to store personal items between visits, there is a $7/visit moving fee for the staff to bring the wardrobe to and from the basement.  The Phillips Club allows owners to bring pets, and I believe there is a $50/visit cleaning fee for owners who take advantage of this.

*Resales*

Through my due diligence, I determined that unit values on the Phillips 1 have appreciated over time, although the rate of appreciation was modest.  For example, in 2005, studio apartments purchased from the developer in Phillips 1 were selling for approximately $125k.  In the past 12 months, those same units have resold for between $145k-$149k.  Thus, in two years, unit prices have increased about 18%.  (The original price on Phillips 1 studios, offered in 2003, was apparently $120k)

This appreciation has materially underperformed the broader NYC real estate market.  One reason for this, I suspect, is simple oversupply:  remember that each unit is sold 8x, so there is a lot of “invisible supply.”  My view is that long-term appreciation for units in the Phillips Club is limited, and that you should be happy with price increases in line with the rate of inflation.  

Moreover, as with all timeshare/fractional properties, the sales commissions for a reselling owner are very high.  Millenium Partners, who now is the operator for Phillips 1, and is the sponsor/operator for Phillips 2, will resell on behalf of owners, however they charge a 15% commission.  Units can also be privately resold through a real estate broker, however brokers typically charge 8% rather than the NYC standard of 6%, due to the additional difficulty of explaining, showing, and selling fractional interest properties.  

Net net:  Phillips Club units have very modest price appreciation potential, and almost all gains are likely to be wiped out by sales commissions.

*Our Story*

My wife and I are probably unusual owners for the Phillips Club because we actually live in NYC.  

We have purchased a unit for two reasons:  First, to have a “guest bedroom” for the family and friends who until now have slept in our living room when they came to town.  Second, my wife and I do not intend to stay in NYC long term, but we like the city, and would not mind owning an affordable pied a terre long-term.  My wife and I purchased the Phillips 1 studio with cash, and my parents (who came to town 20 days last year to visit their newborn grandchild), will pay all maintenance fees.  We expect that guests will pay user fees.

When I started to analyze the Phillips Club, my starting point was that to be economical, the cost-per-night had to be superior to the cost of comparable hotel rooms.  Some quick analysis showed that this was viable only with studio sized units—in my opinion, 1 bedroom units (whether in Phillips 1 or Phillips 2) are more expensive than hotel accommodations, under any set of reasonable assumptions.  The trick in my mind, therefore, was finding the cheapest available unit.

Studios in the new development, Phillips 2, are selling for $195k.  Prices are non-negotiable.  I learned that through Millenium Partners one owner in Phillips 1 was selling a studio for $160k (probably negotiable to $155k).  It was immediately clear to me that purchasing in Phillips 1 was the sensible decision;  sure, it would be nicer if my guests could watch TV on a 42” Panasonic plasma instead of an old-style tube TV—but I realized that if I bought in the newer development, it would be tantamount to paying $40k for a TV.  That made no sense.

The next question was whether I could do better on price than what was being resold through the developer.  The obvious way to do this, I figured, was to cut out the sales fee, and capture that discount for myself.  So I paid $10 for a subscription to an online service that allowed access to NYC property records, and I used the city’s ACRIS website, and I quickly found the names and addresses of a number of Phillips 1 studio owners.  Then I went to Google, and managed to find telephone numbers and/or email addresses for approximately 8 owners.  I researched their respective cost basis, and started calling them, to find out whether they were interested in selling to me directly.

As luck would have it, within 1 day, I identified a seller who was looking to sell because she had just rented an apartment full-time in NYC.  We quickly agreed on price:  $140k.  This price was cheaper than anything I would be able to source through a broker or the developer, and at the same time would give more money to the seller than she would be able to get if she sold using a middleman.  I instructed my lawyer to conduct fast-track due diligence, and we closed.  (Closing took a frustratingly long time, due to the holidays and some difficulty in the seller assembling closing documents.)

One telling fact emerged from my purchase effort:  existing studio owners at Phillips 1 are highly satisfied;  while I managed to get in contact with everybody I could identify, 7 out of 8 owners refused to sell to me because they wanted to keep their interest in the club.  I found this fact tremendously telling.

[TO BE CONTINUED]


----------



## Texan in NYC

*Review Continued*

*The Math*

The math is compelling, in my opinion.

After-tax “lost” interest from tying up cash:  [$140k * .05%]  x [55% for federal state local taxes] = $3850

Annual HOA dues:  $3600 *

Daily cleaning fees (assuming maximum use):  $21 x 46 = $966

Check out cleaning fees (assuming 7 visits):  $40 x 7 = $280

Wardrobe movement fee (assuming 7 visits) = $7 x 7 = $49

* 25% is deductible real estate taxes



Total cost of ownership:  $3850 + $3600 + $966 + $280 + $49 – [45% x 25% x $3600] = $8340

Cost per day (46 days) = $181

A few things to note about this back-of-the-envelope calculation.  First, it is important when calculating the opportunity cost of committing capital, that you adjust for taxes, rather than merely take the risk-free rate.  (I have pointed this out to Steamboat Bill in a private message, and I think that generally people on the TUG should think in these terms.)  If you fail to make the tax adjustment, you’re overstating the opportunity cost, because in reality, you can’t capture all of the interest from wherever your cash is parked, due to the drag of federal, state, and local taxes.

Second, although in the “Resales” section above, I wrote that “Phillips Club units have very modest price appreciation potential, and almost all gains are likely to be wiped out by sales commission”—I believe this statement is true only on average, and only for owners who are not sophisticated in their purchase and sale of the asset.  In particular, if you’re able to purchase into the club at a price lower than comps (by splitting some avoided sales commissions with the seller) AND you are also able to sell your interest privately and without a middleman—I believe it is possible to turn a modest profit on your unit that tracks the rate of inflation.  To put it differently, I believe if you can buy and sell smartly, it will be possible to have a zero opportunity cost.

If you agree, the cost-per-night falls dramatically, to $97/night (i.e., [$8340 - $3850] / 46).

In any event, under either analysis, the economics are clearly superior to the hotel alternative.  According a recent article in the NY Post (July 2007), hotel rates in New York City during the first half of 2007 averaged $273/night.  (It wasn’t clear if this statistic included NY sales tax, NYC sales tax, and NYC hotel occupancy tax—all of which are around 21% combined).  I can tell you that anecdotally, the after-tax, all-in price per night for a “luxury” hotel room in NYC could easily run $350/night.  I can also tell you that, because of a 5-year condo conversion boom in NYC, the supply of hotel rooms is thin, and most people believe that hotel room rates will continue to rise before they begin to decline.

*Conclusion*

I’m delighted at our purchase, even though neither I nor any of my guests have even stayed at the property.  But I’m certain from my walk through of the building, that the user experience will be absolutely first-rate.  I’m especially impressed that 7 out of 8 current owners I managed to contact politely refused to sell their unit to me, and instead sang the praises of the Phillips Club.

I’m delighted that the price we paid was lower than all recent comps;  you’d have to go back to August 2006 to find a sale as low.  The most recent comp sales in 2007 ranged between $145k and $149k, so on paper (and absent transaction costs), I have theoretically booked a “profit” on the unit already.  And recently, Millenium Partners increased the prices on studios in Phillips 2 by $5k, to $195k, thus increasing the price umbrella over my older property.  (I believe in the old adage of buying the cheapest house in the most expensive neighborhood.)

I’m delighted that houseguests will no longer have to camp out in our living room for a week at a time, which is neither hospitable nor particularly comfortable for us.  I also love the fact that buying the fractional for us is much cheaper than the alternative—renting or purchasing a 3 BR apartment, just so we can have a guest room.

Finally, I’m delighted because, knowing what I know about the Phillips Club, and given the economics we’ve managed to structure, I feel that my wife and I have purchased an asset that we’ll want to hold long-term, either as a “guest bedroom” or as a pied a terre for when we ultimately leave New York!

Hope you found this review helpful.


----------



## stevelb

Thank you for taking the time and effort to post this information.  It is very helpful to all and to me as I contemplate a purchase in NYC.


----------



## stevens397

This was most certainly well worth the wait!  We are headed there this weekend and will take your "bible" with us.  In all my years on this board, I have never seen a more complete and useful review.

This would be for our personal use and I really want the living room, so I'll have to rework the numbers.

Again, many thank!


----------



## Steamboat Bill

Awesome review...

I have a few questions.

1. How easy or difficult did the current members indicate it is to get reservations? Specifically, what is the less than 60 days availability look like for any given time.

2. What price would you charge TUGers to use your place?

I will be in NYC Jan 24-27 and may visit this property.


----------



## Texan in NYC

*Initial impressions*

The Phillips Club maintains an email list of availability that goes out every Monday by email.  Any prospective purchaser should request to see this list, to get a sense for the availability of their unit type.  A couple of observations:

1.  Availability seems to depend somewhat on the type of unit you purchase.  There are only 7 studios in Phillips 1, whereas there are 39 1 BRs.  Although demand should be larger for 1 BRs, in just eyeballing the availability, it seems 1 BRs are still easier to get.

2.  Planning ahead matters.  As of yesterday, a studio room was available every day from 2/23 until the end of July (albeit on some days early on, only 1 unit was available).  By 3/13, there were multiple (e.g., 4+ studios of 7) available through July.

3.  Short notice weekends look tight.  The weekend of 1/18-1/20 is fully booked for all studios and 1BRs, and 3BRs;  the "executive 1BR" and 2BRs had partial days available, but not the entire Friday - Sunday block.

4.  Mid week is easy.  Despite the short notice, for the M-Th from 1/14 - 1/17, there is availability in studios. 

5.  Initial impressions of the staff is very positive;  highly responsive and knowledgable.  I called over to alert them to the change of ownership, and I have received written confirmation already that the recordkeeping changes are in process.

6.  I recently learned that in 2008 there will be a small special assessment on Phillips 1 owners, as well as a partial spend-down of the large reserve, in order to "modernize" the units to conform to Phillips 2.  I dont have the details of this, but I'm told this may involve new furniture, electronics, appliances, etc., and would likely occur in the slower summer months.


----------



## Steamboat Bill

Texan in NYC said:


> First, it is important when calculating the opportunity cost of committing capital, that you adjust for taxes, rather than merely take the risk-free rate.  (I have pointed this out to Steamboat Bill in a private message, and I think that generally people on the TUG should think in these terms.)  If you fail to make the tax adjustment, you’re overstating the opportunity cost, because in reality, you can’t capture all of the interest from wherever your cash is parked, due to the drag of federal, state, and local taxes.



Although I 100% agree with your math in "your" example, I find it "easier" to use a raw or gross lost income opportunity rate as after-tax rates are different for everyone. I know my own personal tax rate often changes from year to year depending if I have capital gains/loses vs income only.

Besides, too many people overestimate this rate at 8-12% anyways.

I also think you made a FANTASTIC well educated buying decision that sets the bar for fractional purchases. I am now seeing tons of fractional properties for sale at various upscale resorts and the prices are shockingly high ($250k for 1/12 share of a 2 bedroom in Stowe). 

You got a fantastic bargain for NYC and I congratulate you and I am sure your family and friends (hint-hint) will appreciate it.

---------

I am free Jan 24th in the evening as I will be at the Marriott Marquis in NYC if you want to meet-up. My wife will be joining me (without kids) on the 25th and I will not have any free time (if you know what I mean) after she arrives.


----------



## stevens397

Just got back from a one night stay at the Phillips Club.  It's certainly not like a timeshare or a hotel - much more like an apartment building.  That is not a knock - I believe it is exactly what they want it to be - your own apartment in the city.

Easy check-in, very quiet and very few people floating around.  The location is wonderful.  There are so many wonderful locations in NYC but I'm an Upper West Side guy and 66th and Broadway, right next to Lincoln Center and a 15 minute walk to the theater district is about as good as it gets.

We were placed in the newest section, Phillips Club 2.  The apartment is lovely.  The bedroom is small with only a bed, dresser and desk but it is more than adequate and the bed is very comfortable.  The living room area is beautiful and very comfortable.  The only downside is the bathroom.  It is on the small side and I much prefer a separate stand-alone shower stall.  This was a combo unit and was on the small side.

That said, it would not deter me from buying here.  My issue is that I simply don't see needing if for anything approaching 45+ days a year.  We travelled there with my business partner and his wife, hoping that he would be as interested as I was, but no such luck.  I'm still hoping I can get my brother-in-law interested.  Two families sharing one unit would be great for me and the numbers would certainly work.

But anyone expecting a bar in the lobby, etc, will be disappointed.  But as a pied-a-terre for someone who either doesn't want or can't afford solo ownership, it seems like a fantastic idea.


----------



## Texan in NYC

Thanks for posting your user experience, Steven.  I'd never stayed there before I bought, so your first-hand positive experience is a welcome reassurance that the asset is what I believed it would be.

Buying in the Phillips Club is clearly an affluent person's luxury--it's very difficult to fully utilize the 46 days/year for most people, I suspect.  Of course this is precisely what makes the Phillips Club such an attractive asset to own--the promise of excess capacity, i.e., flexible usage.

My own (non-scientific) due diligence suggests that PC owners come from a broad cross-section:  Europeans, Tri-staters/Eastern seaboard, a fair number in Florida and California.  Anecdotally, I think people buy for different reasons:  to have a reliable "crash pad" in the City after a theater show, people who regularly do business in NYC, to use as a seasonal pied a terre, to visit grandchildren, people who used to live in NYC and who want to maintain a connection, etc.

The variety of uses (and thus the lower likelihood of correlation between users for dates), plus the fact that NYC is a year-around destination, make the Phillips Club a workable fractional.  The liberal "friends and family" guest policy also helps, since you can let people use your interest.  A fractional in a seasonal location (e.g., ski country) might be less workable.  (At least this has been the experience of a friend of mine who owns at Old Greenwood in Lake Tahoe).


----------



## Texan in NYC

*Update*

I'm tickled pink by this development, so I thought I'd toot my own horn by bumping this thread.

Back in January, my wife and I closed on a studio in the Phillips Club I for $142k ($140k + 2k in fees/costs).  I've been periodically checking real estate sites for comparable sales, and today I noticed that the exact same unit just entered contract at $165k:

http://www.streeteasy.com/nyc/sale/194023-condo-155-west-66th-street-lincoln-square-manhattan

Take away 8% in broker fees, and we're still up nearly $10k pretax;  if we were able to sell privately w/out a broker, we'd be up $23k!  Needless to say, this is a delightful ROI that far exceeds our opportunity cost from tying down capital.

On a different note, the Phillips Club has turned out to be a great asset for us;  by the end of June, our friends/family will have used 30 days, which puts us on a 60 day/year run rate (well above our 46 day fractional interest).  Now add in the 7 day annual reservation, and we're on pace to use 67 days this year.

If we can keep up this run rate, our CPN (considering only HOA dues and usage fees) is going to be $84/night!  And, as noted, if you considered capital gains, we've actually made a profit!  

All of our guests have been very happy with the property.  I have nothing but good words for the Phillips Club.  My only "criticism" (if it could be called a criticism), is that we have tried 3x for short term reservations;  we've succeded only once.  I expect that short term reservations may be hard to get in general, although we'll see if this remains true during the club's supposedly slower time of year, summer.


----------



## Steamboat Bill

Greate review and property...as I posted before, I hope to be your guest one day (especially at $84 per night).


----------



## m61376

Great review- and interesting concept, especially how you have put it to use. I am surprised, however, with the ability to allow friends/family to use it freely, that there has been such good availability. I guess that the owners, for the most part, have large discretionary income that maximizing usage is not a priority.

Given the real estate appreciation in NYC in general and the large demand for pied a terres, that this will hold up price wise and may actually turn out to be a good investment in the long run, especially with the huge price increases over the last five years. In the late '90's and early 2000's studio purchases were attractive as pied a terres; however, now that studios in nice buildings are in the half million dollar range and have monthly MF's in the $750-950 range, I am sure this option becomes increasingly attractive. Also- many full service buildings in the city no longer even allow pied a terre ownership (while you would think HOA would find occasional users more attractive, many Boards will no longer allow pied a terres because they want owners to be full time occupants. These rules have cropped up over the last several years so as to exclude parents from buying apartments for their college aged children to occupy; they need to enact a full time owner occupancy rule so as to avoid age discrimination). Anyway, just another reason why this may turn out to be even a better investment for you. 

I have friends who have mulled the prospect of buying an apt. in the city for occasional use (business, personal) now that their kids are in college and the city and I am going to pass this info. along, because it is an interesting concept. Over the past 5 years apt. prices in the city have increased so dramatically that there no longer are "cheap" studios in nice locations in doorman/concierge buildings.


----------



## zentraveler

Thank you Texan in NYC for this fabulous report and the discussion it generated.  I am a Four Seasons Aviara owner (and a former New England resident who loves NYC) and have put in to exchange a week in the fall 2009 for the Phillips Club. I have meetings that are held at the Waldorf every year so have ended up being and east side gal, but that west side location will get me out of my rut  .

Do you have an update on the upgrade that was going to be done in 2008 on the Phase 1 units? I had requested a Phase 2 trade, though if Phase 1 has been renovated it  wouldn't matter.


----------



## stevens397

When I spoke to a realtor regarding a resale there, I was told that a big difference between Phases I and II was that only #I came with the ability to trade to Aviara.  Are you sure you can get this trade?


----------



## zentraveler

stevens397 said:


> When I spoke to a realtor regarding a resale there, I was told that a big difference between Phases I and II was that only #I came with the ability to trade to Aviara.  Are you sure you can get this trade?



When I spoke to the FS Owner Service rep she did not indicate anything amiss about my request for Phase II.  She said, of course, she could not guarantee it, but would be happy to request it. I have had other conversations with OS reps and no one has any anything specific to say about restrictions on the Phillips Club.


----------



## GregGH

zentraveler said:


> When I spoke to the FS Owner Service rep she did not indicate anything amiss about my request for Phase II.  She said, of course, she could not guarantee it, but would be happy to request it. I have had other conversations with OS reps and no one has any anything specific to say about restrictions on the Phillips Club.



Hi

I mentioned an option in this thread .... http://www.tugbbs.com/forums/showthread.php?t=45924&page=2&highlight=aviara    ....  "  I think the lack of trades is based upon the EXACT MATCH issue ( where you GET a week and then see if someone wanted THAT SAME week ). The common sense way is to meet someone from SP or PC and agree the weeks each party wants ( like here at TUG) --then book and swap --the success ratio would go way up - it become a win-win instead of a poor ratio we have. "


Can we 'off the record' talk to other location owners - like Philips Club members -- and agree for the date - then go to Aviara Owners Services and set up the swap?

Or can we 'gift' the weeks and do the swap between members?

What is the common sense way to put both owners in a better position to get the exchange???

Greg


----------



## atwnsw

I had a thought and would like to know the best way of researching it.

Since there are many bank foreclosures on properties around the country, it occurred to me that somebody owning a Phillips Club timeshare may also be in bankruptcy.

Unlike a house, these units are standardized so there is no risk of buying a unit that is run down or in need of repair.

How would I go about finding a property for sale via foreclosure?


----------



## zentraveler

> Can we 'off the record' talk to other location owners - like Philips Club members -- and agree for the date - then go to Aviara Owners Services and set up the swap?



I think we can if we can find them  . I asked Owner Services whether there was any way at the Phillips Club to let owners know about weeks we want to exchange and she said there was no forum for that, i.e. no PC listserv, or newsletter etc. I also posted reply on a FlyerTalk forum to see if there were PC members there and have not heard back. From Owner Services, 1 BDRM units exchange most easily there. I have a request for a direct exchange there in the fall.



> Or can we 'gift' the weeks and do the swap between members?



Not sure, but that would also involve finding the PC members.



> What is the common sense way to put both owners in a better position to get the exchange???



Great question. Owner services does work with PC staff to try to make the trades, but not clear how aggressively both of those staffs try to match people up.


----------



## Texan in NYC

Hi, happened to check in and saw this thread bumped.

1.  Have never done a trade, so I dont know how it works, or whether it is in fact based on an "exact match"--I sort of doubt it, though.  My impression is that swaps generally work.

2.  I am certain that PC1 can swap with 4 Seasons Aviara and Troon.  Studio owners apparently cannot swap with 4 Seasons Jackson Hole, but apparently the larger units (at least in PC2) can.  (Too bad for me.)

3.  No clue on how one would go about finding foreclosure sales;  I doubt there would be all that many, though, since timeshares wouldnt have any speculators in there to begin with, so few (if any) would buy the asset hoping to flip.  If you are interested in PC listings, check out Streeteasy.com;  I saw a number there, including a good deal on a 1BR in PC2 for $182k.  Listings have definitely increased since the economy turned down.

4.  We have now been owners in PC1 for almost a year.  It's been a great experience.  Our second half usage slowed down compared to the first half, and we will end up using 52 days in 2008 (vs. our fractional 1/8th which implies 45 days of usage).  So I'm pleased, as our costs have been well amortized.

5.  The soft upgrade planned for PC1 has yet to happen;  we've paid the special assessment, and the reserve fund is waiting.  Apparently, they're planning to do the upgrade in post-Xmas winter, when the club is slower.  No idea for how long the upgrade process will take.

5.


----------



## zentraveler

Texan in NYC said:


> 1.  Have never done a trade, so I dont know how it works, or whether it is in fact based on an "exact match"--I sort of doubt it, though.  My impression is that swaps generally work.
> 2.  I am certain that PC1 can swap with 4 Seasons Aviara and Troon.  Studio owners apparently cannot swap with 4 Seasons Jackson Hole, but apparently the larger units (at least in PC2) can.  (Too bad for me.)
> 5.  The soft upgrade planned for PC1 has yet to happen;  we've paid the special assessment, and the reserve fund is waiting.  Apparently, they're planning to do the upgrade in post-Xmas winter, when the club is slower.  No idea for how long the upgrade process will take.



According to the FSA, there does need to be a PC owner who wants the week at FSA to swap for the unit. Or in a pool of FSA owners who want PC and vice versa the weeks need to even out. 

FS Jackson Hole units are 2-3 BDRM so don't exchange with smaller units and are just hard to exchange at all I think. I suspect people buy them to use primarily and I think they are hard to get even in the FS sytem. 

Thanks for update on the remodeling. We have a request in for September.


----------



## Texan in NYC

zentraveler said:


> According to the FSA, there does need to be a PC owner who wants the week at FSA to swap for the unit. Or in a pool of FSA owners who want PC and vice versa the weeks need to even out.
> 
> FS Jackson Hole units are 2-3 BDRM so don't exchange with smaller units and are just hard to exchange at all I think. I suspect people buy them to use primarily and I think they are hard to get even in the FS sytem.
> 
> Thanks for update on the remodeling. We have a request in for September.



See what strikes me as weird, as that at the Phillips, we dont put in out swap requests until May.


----------



## zentraveler

Texan in NYC said:


> See what strikes me as weird, as that at the Phillips, we dont put in out swap requests until May.



Well it is certainly inconvenient to have FS on a Jan-Jan booking cycle and the Phillips Club on July-July. So they have my request, for September at the PC with a November week to trade at FSA,  and will hold it until the PC owners start making requests in May and they can match them up.


----------



## ozergroup

*Former TPC owner*

My partners and I purchased a 2 bedroom unit at TPC and I loved every minute I was an owner.  The analysis submitted above is dead-on.  Since my partners and I travel with families (for leisure) and during the week for business, it was a perfect solution for NYC stays.  We actually got our usage up over 70 nights a year.

When we sold our companies and our usage went way down, the economics no longer made sense.  I was very sad to sell, but we did.  If my NYC ever increases again (as I hope it will), I would gladly buy again.

I do believe that fully understanding the reservation system helped us maximize usage.  There are tips.

The staff was always friendly and - as some have described - it's more like living in an apartment than a hotel (which I loved).  Having the ability to keep some personal things there was a big plus for me, because for short stays I didn't need to pack much.  All the 2BR had washer/dryer in the room, another big plus for families.

I also loved using the library (off the lobby) for meetings.

Rock on Phillips Club!

-Mark


----------



## zentraveler

ozergroup said:


> I do believe that fully understanding the reservation system helped us maximize usage.  There are tips.



Anything you would like to share, particularly as it may apply to exchanging with the Fours Seasons?


----------



## Texan in NYC

ozergroup said:


> When we sold our companies and our usage went way down, the economics no longer made sense.  I was very sad to sell, but we did.



I'd also be curious to hear your experience with resale of your unit (how long, broker or FSBO, price appreciation/loss, etc.)

By the way, to the extent that anybody on the forum is interested in buying a unit, the Phillips Club maintains a website for owners in which we can list units for sale.  It's password protected (and I wont share that), but I'll happily look to see if there are any units being offered for sale, and pass along the contact information of the seller.


----------



## TPCIIOwner

*My Phillips experience has been incredible*

have been an owner for exactly one year of a one bedroom.  Love everything about it including staff, unit quality, maintenance, location, value.  We have used our unit over 75 days and in the year have only once not been able to get a reservation.  Some have been within a week, but since you can have two reservations on the books at any time for up to 7 days AND can make another reservation the minute you check out, we have not had a problem.  IN ADDITION to the two reservations you can have on the books, you can reserve another reservation of up to three nights at your size level if one is available.  This third reservation must be made within five days of check in.  If your unit size is not available you can reserve any unit size that is available for one or two nights 48 hours before check in.

Life is not a balance sheet -- and the "rate of return" or "rates per night" are tough to calculate because use is variable and projected returns on alternative investments is so unpredictable in these times.  Since the economic crash when I do my calculations (given a 25% decline in my investment values), the cost on our per night use is probably negative!  

I think the availability is high (except for peak weeks like the week before Christmas) because most people grossly overestimate how much they are going to use second homes, even if they are a fractional.  

This is one of the best decisions I have ever made in my life because I have the best of all worlds:  ownership for about what I need or what without purchase of an apartment that I would never use enough to justify it.  Also, no politics of coop or condo board are involved here.  You deal with professional sales, reservations, housekeeping and other staff.


----------



## Texan in NYC

If any of you are interested, I just noticed a studio in Phillips 1 on sale.  It was listed 5 days ago at 148.900 which seems like a pretty good price (ie below recent comp transactions of $165k).

http://www.streeteasy.com/nyc/sale/375902-condo-155-west-66th-street-lincoln-square-new-york


----------



## rsnash

A couple of you have mentioned more nights of usage over the 1/8 ownership amount (~45 days, but have used 60+ days). How does that work? Do you pay extra when you book more than you own? If no units of your ownership size are available, do they upgrade you?


----------



## Texan in NYC

rsnash said:


> A couple of you have mentioned more nights of usage over the 1/8 ownership amount (~45 days, but have used 60+ days). How does that work? Do you pay extra when you book more than you own? If no units of your ownership size are available, do they upgrade you?



1.  No.  Usage above your 1/8th ownership is "free", subject only to the standard housekeeping and cleaning fees.  There are no limits on usage, other than compliance with the reservation rules.

2.  If your unit is not available within 48 hours (maybe 72 hours, I can't remember), you will be upgraded to any available unit, and will pay the applicable housekeeping/cleaning fees for the unit you are booked into.

For what it's worth, our usage for Q1 2009 looks like it will be on a 100 days/year run-rate.  (This is a distorted number, however, because Q1 is the seasonally easiest time to get reservations).


----------



## tombo

Texan in NYC said:


> 1.  No.  Usage above your 1/8th ownership is "free", subject only to the standard housekeeping and cleaning fees.  There are no limits on usage, other than compliance with the reservation rules.
> 
> 2.  If your unit is not available within 48 hours (maybe 72 hours, I can't remember), you will be upgraded to any available unit, and will pay the applicable housekeeping/cleaning fees for the unit you are booked into.
> 
> For what it's worth, our usage for Q1 2009 looks like it will be on a 100 days/year run-rate.  (This is a distorted number, however, because Q1 is the seasonally easiest time to get reservations).



Simple math tells you that this can't work indefinetelly. If 3 people use 100 days each a year, then a total of 65 days are left for the other 5 owners (averaging 13 days usage a year for the remaining 5 owners, not the 45 days they paid for).  Of course there have to be days where a unit is not available for maintenance so a full 365 can't be available for owners anyway. It is impossible for 5 owners to do 75 days each because that would be a total of 375 days and 3 owners would not get to use a single day. If owners can reserve unlimited weeks and trade them, use them, or give them to family and friends,then there will be big problems ahead. No one wants to pay that kind of yearly fees and initial investment to be told when they finally can get away that there is no room at the inn.


----------



## Texan in NYC

tombo said:


> Simple math tells you that this can't work indefinetelly. ...  If owners can reserve unlimited weeks and trade them, use them, or give them to family and friends,then there will be big problems ahead.  No one wants to pay that kind of yearly fees and initial investment to be told when they finally can get away that there is no room at the inn.



Clearly, not everybody can overuse the asset, because usage is zero-sum.  That said, it isn't clear to me what the overall usage patterns are for all members--and whether there are a small number of overusers, with a vast majority of underusers;  or alternatively, whether every owner is aggressively competing to be an overuser, with only some owners being successful at this and most feeling like that asset is not worthwhile.

I suspect most people are under-users.  Assuming 7-day stays, one would need to take 6.6 trips/year to fully use a 1/8th fractional interest.  This is pretty high usage for anyone from out of town, let alone somebody from Florida, California, or Europe where a number of users live.  I suspect that usage is directly proportional to proximity to NYC--very high usage by in-town owners like myself who use it as a guest room;  fairly high usage from TriState residents;  next highest usage probably from Northeast owners within a 3 hour car drive and/or people within a 2 hour flight;  and then the least usage from Europeans and owners on the West Coast.

I think historically, the PC runs at around a 90% utilization, which is misleading, because weekends (particularly long weekends), and certain seasons (like Spring, Thanksgiving, Xmas/NYE, US Open, etc) the club is probably 100% full, whereas during winter, and during the week, usage is lower.

I did want to comment on your point that "_f owners can reserve unlimited weeks and trade them, use them, or give them to family and friends,then there will be big problems ahead."

Owners cannot reserve "unlimited weeks";  they are limited to 2 advance reservations (max 7 days each) "on the book" at any given time, plus 1 "short term" reservation made within 72 hours of check-in, plus 1 "annual" reservation made each May.

Also, the Phillips Club 1 has been fully sold for quite a while (except, I think there are a few 3 bedroom units still unsold), and the reservation rules have been functioning quite well as far as I can tell._


----------



## dexter87

Texan in NYC said:


> I'd also be curious to hear your experience with resale of your unit (how long, broker or FSBO, price appreciation/loss, etc.)
> 
> By the way, to the extent that anybody on the forum is interested in buying a unit, the Phillips Club maintains a website for owners in which we can list units for sale.  It's password protected (and I wont share that), but I'll happily look to see if there are any units being offered for sale, and pass along the contact information of the seller.



My husband and I have been interested in the Phillips Club since it opened but are finally ready to become owners now that our children are ready to leave home and we can look forward to spending more time enjoying New York City.  We are interested in studios or one-bedroom (peferred) units in both Phllips Club 1 & 2.  If you could help us with any information regarding the available units for sale and any other helpful suggestions, we will be very grateful.


----------



## roberts270

I have been interested in purchasing a 1 bedroom unit at Phillips Club NYC.  Can you tell me if anything is for sale by owner? What price are they asking? Thanks,  Robert


----------



## jss223

I'd be interested in a 2BR if any are available.


----------



## tbone586

*Question - Phase 1 vs Phase 2*

Hi, appreciate advise. Considering a one bedroom purchase. Other than newer furnishings in Phase 2, could anyone please explain the pros and cons of purchasing a one bedroom in phase one (resale), vs. a Broadway or Club one br in phase two?

Any major differences in building construction, soundproofing, or other issues between the two phases, with regard to one bedrooms? Looks like the phase one 1-br is a little smaller overall vs a phase 2 club 1-br, but also looks like the older phase might have slightly larger bathroom, is that true?

Other than TV's, what has recently been updated in the phase 1 PC units?

And anyone with information on private resale of a one bedroom can feel free to respond via private message.

Thanks!


----------



## TPCIIOwner

*Phillips Club II website with sales prices is public now.*

Go to www.phillipsclub2.com for current pricing.  To my knowledge the sales office is only handling Phillips Club II sales since they want to sell out that building.  Owners in TPC I appear to be selling through brokers/on their own.

Current prices are DEEPLY discounted from 18 months ago when Broadway one bedrooms sold for $220,000.  Now selling for $175,000.


----------



## mccaskey

*A web site of Phillips Club units for sale*

A web site listing sellers of some Phillips Club I units is at www.phillipsclubunits.com.


----------



## Florida Family

Texan in NYC said:


> I'd also be curious to hear your experience with resale of your unit (how long, broker or FSBO, price appreciation/loss, etc.)
> 
> By the way, to the extent that anybody on the forum is interested in buying a unit, the Phillips Club maintains a website for owners in which we can list units for sale.  It's password protected (and I wont share that), but I'll happily look to see if there are any units being offered for sale, and pass along the contact information of the seller.



My husband and I have had our eye on Phillips Club for many years!  We are from Florida but visit the city 4-5 times per year.  We are interested in sharing the ownership of the unit with a partner but have been unable to talk any of our friends into doing it.  I was wondering if there is a way to contact current owners to see if they would be interested in selling half of their share to us and forming an LLC to own the fractional ownership together?


----------



## zentraveler

Phillips Club Review (September 25-October 2, 2009 as a direct trade for Four Seasons Aviara)

Overall we  thought this property was lovely and perfect in many ways:
fabulous  location steps from Lincoln Center and the new Alice Tully hall and
the  stop for the 1 subway line, access to a state of the art gym, and
helpful  staff.

Check in and pre-arrival phone calls with questions were efficiently
handled. We shipped a box ahead and it was waiting in our  apartment when we arrived. We had other packages shipped to us as well. Arrangements for a departure limo were not quite  as smooth, and if I had not called twice to verify there may have been a  hitch. Similarly, we requested newspapers two days in a row and neither day did we get them over the weekend. It seemed to work better during the week.  There was daily maid service. Towels were replaced daily and sheets seemed  to be changed every 3 days or so.

Free Wi-Fi was available  (password given on check in) although
disappointingly, there was a charge  for every phone call made on the phones
in the unit (my least favorite  nickel and time tactic) and my AT&T service
worked so badly that I  could not really make calls. My husband's T-Mobile
was fine.

Our  apartment was a 1 BDRM in the phase 1 of The Phillips Club (TPC) which
had  been renovated a year earlier according to staff. We had a 3rd floor
unit  on the West 66th St. side, but on the back side of the building that
was  exceedingly quiet and peaceful. Out our windows were some trees and  the equipment that was back there was shielded by lattice and was very  pleasant. It was north facing, and there were tall buildings in the  vicinity, but
plenty of light for what we needed. There were two closets,  ample drawer
storage in the bedroom, bathroom and kitchen.

The  kitchen had a full refrigerator, oven and dishwasher, microwave, basic
and  minimal but adequate dishes (for 4) and very basic cooking gear. The
coffee  pot was your basic glass pot automatic and the wine glasses were also basic  (neither the worst I have had but certainly not the best either).

The  living room was nicely furnished with sofa, chair, desk and table with  2
chairs and a very large (42 inches?) flat panel TV. There was also a  nice
Bose stereo with subwoofer and inputs that allowed for playing music  from
your computer or iPhone if you had the proper cable.

The  bedroom had a king bed, dresser, chair, safe and another TV (35
inches?).  Pillows were king foam and they brought me a feather pillow when  I requested it. Linens were perfectly nice.

Bath was amply sized,  with a 1 sink, a decent shower and Frette towels, but
had a lousy hair  dryer and no make up mirror. Lots of storage. Full tub.

The  neighborhood was terrific. We had access to the Reebok/Sports Club NY
which  was 3 very short blocks away and terrific. Very full class schedule
(yoga,  aerobics etc.), good pool, café, and big locker room. As good as they
come.  Next door to TPC is a mid-sized, upscale grocery with a large
selection of  prepared food, good cheese, fish, meat etc. Open every day
until 9  pm.  There is a newsstand 1/2 block away and an AMAZING wine store  at 67th and Columbus (4 short blocks) close to the gym and a large (but  always busy) post office.  There is a farmer's market across from  Lincoln Center a few days a week and a huge Borders 1/2 block away. Many  good restaurants in the area and the cross-town bus is a block  away.

The property seemed to have a mix of longer term stays and  shorter term Bell
staff were helpful and available.

Happy to answer questions.


----------



## Cathyb

Thank you for a great review!  What exchange company did you use and how much in advance did you place your request?


----------



## DeniseM

> a direct trade for Four Seasons Aviara



Looks like this was a private exchange between 2 owners.


----------



## alwysonvac

Cathyb said:


> What exchange company did you use and how much in advance did you place your request?



Four Seasons Residence Club and the Phillips Club have a direct exchange program.
Posts #13 thru #22 in this thread talks a little about the direct exchange program between FS and PC


----------



## zentraveler

> alwysonvac said:
> 
> 
> 
> Four Seasons Residence Club and the Phillips Club have a direct exchange program.
> Posts #13 thru #22 in this thread talks a little about the direct exchange program between FS and PC
Click to expand...



Yes, this was a direct exchange that was done directly through the Four Seasons Residence Club. Exchanging directly with a TPC owner would also be possible, but not how this happened.


----------



## ozergroup

*Resale info*

The best place to find resales is from brokers - not the TPC itself or the owner resale website. TPC charges a 20% sales commission compared to much less for brokers. In my experience, the owner website of resales is more people just testing the water for resale and not motivated sellers.  Allison Connor is a broker at Brown Harris Stevens. She seems to get the largest number of these listings.  There are multiple for sale right now.  

As a former owner, I know this property well and would love to own again.  Feel free to ask any questions. 

-mark


----------



## letsgobobby

this sounds very appealing. Since the 1/8 share ~45 days is truly 'yours' can you also exchange it, ie through a home exchange program? Do others rent their days out (I would not want to do that)?

What are current annual fees, and how have those evolved over time? It currently looks like ~ $9k per year + nominal per-day/stay fees (cleaning, wardrobe, etc). In about 2001, when the New York Times wrote an article about TPC, the fees were about $6k per year, implying 50% over 9 years or approximately 4.6% per year during that time frame. That's somewhat higher than inflation, but the figures are rough estimates.


----------



## Texan in NYC

The annual fees for a studio are much less than $9k a year.  We prepaid our 2010 HOA fees, which ran around $4000 this year.  If you assume 45 days of full usage, that is another $950 in usage costs;  if you assume your 45 days were spread across 9 different stays, that would be an additional $350 in checkout fees.  So total cost of ownership for a Phillips 1 studio is $5300 per year, or $117 per night (excluding cost of capital charges, which would be near zero in this investment environment).


----------



## letsgobobby

Thanks for the clarification on fees. What about renting or exchanging? If I am only going to need 20 days, can I offer up my remaining 25 days to someone (for free or a fee) in exchange for utilizing their flat in, say, Paris?


----------



## Kagehitokiri2

yes. i dont know of any fractionals that restrict, as they are ownership. (maybe castiglion del bosco does, but nothing else comes close to it.)

* if youre looking at fractionals, look for ones that allow unlimited space available use. (with DCs, only m private residences offers that right now.)

elan might even be DC-style >


Kagehitokiri2 said:


> http://www.elanprc.com/FAQ/
> 
> Owner-Members may also stay at other properties within The Élan Collection on an available, flex-time basis.
> 
> Twice a year, Owner-Members will submit a priority time reservation request for their vacation residence. If they would like to stay at another property within The Élan Collection, they may exchange their guaranteed use rights for flex time. They will also benefit from unlimited additional access whenever space is available in their own residence, as well as the other residences within the portfolio, subject to the policies of The Élan Collection Reservation System.



karma also has a hybrid where you own a hotel residence (in rental pool) but have DC-style use, and possibly DC exchange.

some DCs allow anyone to use your nights, but renting for profit is officially not allowed. (like jet fractionals/cards)


----------



## juilliardstudent1

*Any Phillips Club Members...?*

Hello to all the Phillips Club Fans,
I'm a student at Juilliard graduating May 20th and although my parents stay at the Phillips Club as a hotel very, very often, I do not have access to the Library. I need a place to congregate my extended family for an afternoon and was hoping a member of Phillips Club I could write a short letter on my behalf. I understand it's quite a liability, but I hope someone will be generous enough to understand. My email is mcj@juilliard.edu . Please help and graduating Juilliard Student go out into the world! If you're a member, it'll only take a few minutes. Thank you!

Mark
mcj@juilliard.edu


----------



## AreAre22

*The Phillips Club*

I am thinking about purchasing into The Phillips Club and cam across this thread.  I see most of these entries are old and wondered what everyone's thoughts are now - and if there is any advice you could impart.

Much appreciated.


----------



## Multicity Resident

*Review of Phillips Club II by owner of 2 years*

I joined TUG a few years ago when we were thinking about purchasing at The Phillips Club and were doing research.  I had not logged on prior to today since our purchase in 2009 and only logged on today because I am reviving the old computer that I was using at that time for a guest room; in clearing browser history, I found all of my old TUG visits so I just logged on for curiosity to see what, if anything, people have said about either The Phillips Club (TPC) or Ritz Carlton Club (RCC) recently.  I saw the recent inquiry and am now responding as someone did for me back in 2009 (thank you Texan in New York if I recall correctly).  We have owned at The Phillips Club for 2 years now and absolutely love it, as do all of our friends and family.  We use well over 40 days per year and cannot speak highly enough of this operation.  It is genius.  Take the time to understand the system, look up the other owners through ACRIS, purchase, and you will be delighted.  I only wish that RCC would take a page from TPC book.  While we love our RCC membership, the overall management and cost-effectiveness of RCC pales in comparison to TPC. Well, there you have it.


----------



## DeniseM

Welcome back!

Are you aware that we have a separate TS reviews section?  If you'd like to see additional reviews, click on TUG Resort Databases in the red bar at the top of the page, log in, click on reviews, and search for the resort by exact name.


----------



## kbmaj

*Share a Phillips Club unit with my family*

Im interested in buying a phillips club unit but know I wont use it for 45 days.  If you or someone you know might be interested in sharing a unit please let me know.  Most interested in a 2BR unit, but have some flexibility in the regard.  Am a lawyer so know how to structure an LLC to make it work.  Message me through tug or email me direct at: k b maj mud ar (at) hotmail dot com.
thanks ken


----------

