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Co-ownership company Pacaso has rebounded from a slow start to 2023 with a bevy of new luxury home acquisitions and its fastest ever sell-out: A four-bedroom, four-bathroom home in Cabo San Lucas, Mexico, called Esperanza that was bought up entirely in the presale stage.
Buyer demand for fully serviced second homes has led the company to pick up a fourth Cabo home, four more in America’s sought-after mountain town destinations and two in Southern California, according to an announcement shared with Inman.
Per the company’s model, each home is split into shares for individual ownership. Buyers can buy as little as a one-eighth share, and all share amounts are entitled to the same level of locally sourced management service, amenities and vendor partner benefits.
June proved to be the turning point for Pacaso’s year, in which the company experienced a 59 percent increase in funded shares compared to May 2023, according to the statement.
Austin Allison, co-founder and CEO of Pacaso, said in a statement that the Cabo growth was helped by the company’s diligent handling of international financing. (Allison will be on stage at Inman Connect Las Vegas in August.)
“We offer a solution that not many others provide to make ownership in Mexico seamless,” Allison said. “Since our expansion into Cabo last year, we have warmly welcomed many happy families to their second home, and the continued strong demand for co-ownership, particularly in Mexico, comes as no surprise. Looking ahead, we’re excited to introduce even more inventory to our marketplace, catering to those who are searching for their own slice of happiness.”
In Lake Tahoe, Pacaso is offering shares of homes in two of the market’s ski destinations: Majestic in Olympic Valley, home of Palisades Tahoe; and Home Run at Northstar California. There’s a property soon to be available in Vail, Colorado, and one state north in Wyoming’s downtown Jackson, buyers can consider West District, a three-bedroom, three-bathroom new construction condominium.
For those not keen on ski vacations, there’s Pacific Place in Newport Beach and Palm Springs’ Desert Ridge.
Baja Mexico is a growing draw for American ex-pats and second-home investors, largely a result of its affordability, proximity and exceptional winter weather. In addition to the quick-selling Esperanza, Pacaso is accepting backup offers on Palmilla and has sold out Casa Cortez. Soon to be available for sale is a 3,595-square-foot condo home within Las Ventanas, a Rosewood Resort, the company said in an email to Inman.
Pacaso’s recent growth comes on the heels of recent legislative wins in Miami Beach and Utah. In both cases, the company won challenges to its co-ownership business model which is often misconstrued as a timeshare or short-term rental proposition.
In 2022, it also found success in justifying its benefits to local markets, demonstrating that it doesn’t reduce or impact middle market inventory.
EBP, a global municipal infrastructure consulting firm analyzing data sourced by Black Knight-owned Optimal Blue, stated that Pacaso’s model actually creates more opportunity for other second homeowners, as well, without affecting median-priced homes.
“Our study found that Pacaso’s unique approach to housing co-ownership provides multiple benefits for the communities it operates in,” said Glen Weisbrod, chair of the board of directors at EBP. “This includes additional household spending going to local stores and services as well as additional tax revenue, compared with other second homes.
The company has launched a number of efforts to engage the real estate community in each market it operates, partnering with a number of national brands to promote co-ownership and market its model’s benefits. It also offers a certification program and pays three percent commissions and 500 restricted stock units for each sale. Upon a resale of a Pacaso share, the original sale agent receives a one percent commission.
Pacaso told Inman that its resale shares sell in about 12 days, with a 12 percent gain.
Allison’s co-founder at Pacaso is real estate technology entrepreneur Spencer Rascoff, who also co-founded Zillow.
