15 Year Extension at OKW for $25 per point

[Frederic Civish]

Unlike the other properties that expire in 24 years, Old Key West is a unique property in several ways. Not least because it has two expiration dates. Upon further reflection, I think it is quite likely that Disney has already made their decision and developed their plan for what to do with Old Key West in 24 years.

I think that if you look at the fact that they are buying OKW 24 year contracts on ROFR, and then turning around and selling them as 39 year contracts, then it seems very likely that they have already decided to 'extend' OKW, in general, until 2057. They might, or might not offer the same 15 year extension once again, to current owners of OKW, but whether they do that or not, I think they are likely just going to 'take' whatever contracts expire in 2042, and continue to sell them as DVC properties, with an expiration date in 2057, just as they are already doing with the secondary market.

I think this also makes a lot of sense when you consider that they will also be getting large numbers of properties into DVC from Boardwalk, Beach Club, Boulder Ridge, Hilton head, and Vero beach at the same time. If they can remove the remainder of old key west from the pool by continuing to sell it with the 2057 expiration date then it actually decreases competition for sales on all of the properties.

Will the price for these new '15 Year DVC Memberships' cut into the market value for full term properties? Or will it become kind of an 'entry level' DVC purchase for new people who don't care about a longer period of time?

What about the massive number of “new” DVC properties that Disney gets from the other expired contracts at the other resorts? All at the same time? They will certainly have a very large number of DVC units to sell at a wide variety of locations. If they’re not careful they could overwhelmed their market. Clearly it would probably also be a disaster to have new DVC units being built at about that same time in 24 years. Therefore I expect that construction of new units will stop for at least several years.

 

[ScubaCat]

Unless they take the option that they did with wilderness Lodge where you have Boulder Ridge and Copper Creek as separate DVC units

I wonder if/how they'd be able to pull that off at OKW. It's still a physical real estate ownership interest and the current OKW condo declaration encompasses the entire property. At WL, each condo association is physically separate.

 

[ScubaCat]

I think that if you look at the fact that they are buying OKW 24 year contracts on ROFR, and then turning around and selling them as 39 year contracts, then it seems very likely that they have already decided to 'extend' OKW, in general, until 2057.

The ground lease to DVD was extended to 2057. The only way deeds "expire" is by owners signing a quit claim over to DVD for the last 15 years. Those who didn't sign or pay the assessment will still technically be owners, albeit not able to book a room.

 

[Dean]

Unlike the other properties that expire in 24 years, Old Key West is a unique property in several ways. Not least because it has two expiration dates. Upon further reflection, I think it is quite likely that Disney has already made their decision and developed their plan for what to do with Old Key West in 24 years.

I think that if you look at the fact that they are buying OKW 24 year contracts on ROFR, and then turning around and selling them as 39 year contracts, then it seems very likely that they have already decided to 'extend' OKW, in general, until 2057. They might, or might not offer the same 15 year extension once again, to current owners of OKW, but whether they do that or not, I think they are likely just going to 'take' whatever contracts expire in 2042, and continue to sell them as DVC properties, with an expiration date in 2057, just as they are already doing with the secondary market.

I think this also makes a lot of sense when you consider that they will also be getting large numbers of properties into DVC from boardwalk, beach club, Copper Creek, Hilton head, and Vero beach at the same time. If they can remove the remainder of old key west from the pool by continuing to sell it with the 2057 expiration date then it actually decreases competition for sales on all of the properties.

Will the price for these new '15 Year DVC Memberships' cut into the market value for full term properties? Or will it become kind of an 'entry level' DVC purchase for new people who don't care about a longer period of time?

What about the massive number of “new” DVC properties that Disney gets from the other expired contracts at the other resorts? All at the same time? They will certainly have a very large number of DVC units to sell at a wide variety of locations. If they’re not careful they could overwhelmed their market. Clearly it would probably also be a disaster to have new DVC units being built at about that same time in 24 years. Therefore I expect that construction of new units will stop for at least several years.

IMO there are possible issues. DVD will own roughly half by 2042, by accounts roughly 1/3 extended and they've added some by ROFR. I have no idea what they'll do. They could just rent their portion, sell it new for 15 years, use it for promotions, use it for college housing like they did before THV came on board. I'm sure we could come up with other options as well. What they can't do it do a major renovation and extend the entire property at then current owner's expense and they cannot extend just the portion they own and resell for a longer period. My guess it'll be a combination of things but unlikely they'll try to sell it new unless they use it as a promotion to combine with other newer property sales or extensions of other resorts.

As noted, the entire resort has already been extended because of the way the wording is in the POS the fact membership is tied to the ground lease. It'll be interesting if anyone didn't sign and is willing to fight DVD, my guess is they'll end up with the extension for free. They have enough infrastructure now in place to allow some of the properties to expire but to let them all expire in 2042 that are applicable but keep the program going is going to present major challenges and likely make the 7 month window reservations slightly to mildly worse in the process.

 

[chalee94]

Wouldn't you think that they would plan for significant renovations while still under the DVD original contracts? It would only make sense to have the owners foot the bill to renovate/refurbishment vs letting contracts expire and sell new again, maybe with some incentives for original owners. It will be interesting to see but i am glad i am not in the experimental 2042 group and won't have to worry about our contract expiring until we are in our 70's.

This would be illegal, so that is one answer.

DVC counsel has made assurances that capital reserves for OKW will be subsidized for 2042 owners at the end of their contract. We will have to wait to see how that plays out...

https://www.disboards.com/threads/extensions-on-2042-contracts.3659537/page-4