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ROFR metric / Ongoing ROFR Activity

It seems like the are taking everything back lately. ROFR.net is showing a lot of failure.. I have lost 4 contracts this year alone and am starting to feel like it's a waste of my time. Good luck to anyone out there who is successful
 
beachgirl79 said:
It seems like the are taking everything back lately. ROFR.net is showing a lot of failure.. I have lost 4 contracts this year alone and am starting to feel like it's a waste of my time. Good luck to anyone out there who is successful
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You're doing a good deed by helping someone sell their week at least.
 
I did a sales presentation today and the manager said their rofr team has a $90M war chest and will only pass on those selling over rerail price.

Sent from my SM-A505G using Tapatalk
 
goaliedave said:
I did a sales presentation today and the manager said their rofr team has a $90M war chest and will only pass on those selling over rerail price.

Sent from my SM-A505G using Tapatalk
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Total BS.

The $90M may or may not be right, but passing only on those over retail price is total BS. In their investor presentations - which are legally required to be factual - Marriott Vacations Worldwide has explained they have a target mix of new versus repurchased inventory and total inventory targets that they manage too. As ROFR opportunities are presented, they likely evaluate each one based on their need for repurchase inventory to meet their total inventory availability and their inventory mix goals.
 
I always hate buying early in the year, as my assumption is they have more money to spend. I was looking at Maui Napili/Lahaina 3BR OF weeks and the last one reported in ROFR failed at $52K in Feb, 2019. A Week 48, right after Thanksgiving.

Pure points purchases continue to clear in the $3-$/Point range.

$54K for that unit is $5.09/Point..so it was the week they wanted, not the 'cheap' price.

Interestingly, 2BR OF weeks seem to be safe at $32K, $4.28/Point,

Has anyone heard of any other Maui Lahaina/Napili 3BR sale ROFR data points?

I guess the big question is how high will they go for a prime, rare fixed week.
 
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TXTortoise said:
I always hate buying early in the year, as my assumption is they have more money to spend. I was looking at Maui Napili/Lahaina 3BR OF weeks and the last one reported in ROFR failed at $52K in Feb, 2019. A Week 48, right after Thanksgiving.

Pure points purchases continue to clear in the $3-$/Point range.

$54K for that unit is $5.09/Point..so it was the week they wanted, not the 'cheap' price.

Interestingly, 2BR OF weeks seem to be safe at $32K, $4.28/Point,

Has anyone heard of any other Maui Lahaina/Napili 3BR sale ROFR data points?

I guess the big question is how high will they go for a prime, rare fixed week.
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I suspect they do have an annual budget number for ROFR, but I suspect there are other factors related to their target inventory levels that drive how aggressive they are with ROFR at any point in time.

During their October Investor day presentation they made a couple of relevant points:
  • They try to match their inventory spend with their sales pace. Over the four years 2016-2019, they averaged $170 million per year cost of inventory sold and they averaged $168 million in inventory investment over the same period.
  • Their target is 33% of their total inventory spend from low-cost repurchases and 67% from new development.
  • They want 1.5 to 2 years of completed unsold inventory in the Trust to support consistent sales growth.
My suspicion is if sales grow more than expected and their available inventory starts to drop toward the lower end of their target range, they would tend to get more aggressive with ROFR at higher price points, and conversely, if sales slow a bit or a lot of development inventory comes on line and the inventory starts to grow, they might tend to scale back their ROFR activities to stay within their target range.

As far as why they exercised ROFR at a fairly high price for that 3BR OF at Maui Lahaina/Napili, consider that week is worth 10,225 points and has a maintenance fee cost of only $0.34/point. So, that one helps drives down the average maintenance fee cost for the Trust and since MVC has to cover the maintenance fees for unsold Trust points, the carrying cost for those re-acquired points is less, so maybe they are willing to pay a bit more for that. It is also desirable inventory for the DP system. The 2BR OF that seems safe to pass at $32K has a mf/point of $0.39/point, so since that one is slightly less cost efficient, maybe they are more willing to let those go at a slightly lower price. Just speculation.
 
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Thanks Jim, I'm still reaching out to brokers to see if any MOC 3BRs have passed ROFR and the price point. Obviously a low volume, but I remember a few summer and fall units on Redweek being sold. I just don't track them as closely as winter. We'll see...
 
Folks, I am curious on the ROFR process. If someone were to place their unit for sell. Someone accepted and then Marriott exercised their ROFR could you pull your unit at that point or does Marriott only exercise at a point in the process where you can't stop the transaction?
 
mkahanek said:
Folks, I am curious on the ROFR process. If someone were to place their unit for sell. Someone accepted and then Marriott exercised their ROFR could you pull your unit at that point or does Marriott only exercise at a point in the process where you can't stop the transaction?
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Why would you want to pull it? They will give you the same sale price as the contract.
 
mkahanek said:
Folks, I am curious on the ROFR process. If someone were to place their unit for sell. Someone accepted and then Marriott exercised their ROFR could you pull your unit at that point or does Marriott only exercise at a point in the process where you can't stop the transaction?
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Marriott simply takes over as the buyer on the contract you have with the original buyer. It would kind of be like backing out of a real estate contract or any other contract. Would Marriott force you to sell or sue? Probably not. But you are still not fulfilling the contract you signed with the buyer (who is now marriott after ROFR).
 
mkahanek said:
Folks, I am curious on the ROFR process. If someone were to place their unit for sell. Someone accepted and then Marriott exercised their ROFR could you pull your unit at that point or does Marriott only exercise at a point in the process where you can't stop the transaction?
Click to expand...

Sellers back out of contracts all the time. I have have 3 or 4 sellers back out.

I had a broker tell me they pull the sale, raise the price by 1k, and re-submit. I don't know if they were being truthful.
 
Marriott just ROFR'd our Kauai Beach Club 1bd oceanfront annual for $8,500.

The signed document came to me directly from Marriott (using the email address attached to our Marriott ownerships and which is unknown to the others in this transaction).

I am stunned.
 
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TXTortoise said:
Just one since 2019 on ROFR, but agree seemed like a big jump for them.

Not at home, but curious to calculate the $/Point value that is when I get a chance.
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Worth 3375 points, so $2.52/point.
 
I wonder if the purchase agreement were to be written along the lines of: Buyer agrees to pay "X" dollars for this timeshare and will transfer funds to seller within (e.g.) 10 days (or some other short period). If buyer does not transfer funds within this time period, the sales price will (for example...) increase by $5,000. This (I think) would be an enforceable contract and would put Marriott on their toes. I've heard that when Marriott exercises ROFR, they take a longer period of time to transfer funds to the seller. What would be interesting is Marriott notifies seller that they are exercising ROFR and take longer than the allowed time period. That would either mean they would have to pay a bunch more ...or would default and back out.

What do the legal-type people think of this? I think that it might be enforceable.
 
I discussed this with a closing agent that was aware of such a clause/addendum that was written to time box Marriott's closing/funding window. They exercised ROFR and exceeded the funding limit. In that case the buyer did not pursue enforcement of the addendum and the exercised ROFR went through. I suppose the value of the deal influences how hard a buyer is willing to pursue the letter of the contract.
 
What I'd like to see in approach tried where, for example, the resale market price of a week is $16k, ROFR is expected to be $15K-$17K, but the selling price is $20K, with an addendum that if the week is accepted by Marriott, the buyer gets a $4K finders fee/rebate from the buyer. That way a seller could try and buy slightly above expected ROFR and if the week is taken both the seller and buyer benefit.

In many cases, the seller just needs someone to get a contract in front of Marriott, they don't care who actually gets to buy it.
 
TXTortoise said:
Just heard that a summer Marriott Maui Ocean Club week, 3BR OF, just cleared ROFR at $51,750, call it $52K. Marriott waived ROFR.
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Wonder if this was an offer put in before everything blew up? Not sure I would be sinking $50K in to anything in the current environment.
 
dioxide45 said:
Wonder if this was an offer put in before everything blew up? Not sure I would be sinking $50K in to anything in the current environment.
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Yes, it definitely was. Closing agent had it queued last week and delays in the ROFR office had it not getting reviewed until today. I expect that will be a $35K week shortly, with even fewer buyers, similar to 2009+.
 
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