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SWOT ANALYSIS SECOND HOME MARKET

PREPARED BY

Adam Greenfader


DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

Table of Contents The Goal of this Study

.................................................... Pg. 3

Scope of Study

.................................................... Pg. 3

About Axyon

………………………………… Pg. 3

General Assumption

………………………………… Pg. 4

Market Research Sources

...................................................

Market Area

.................................................... Pg. 5

Housing Supply & Demand

………………………………… Pg. 5

Key Facts Brighton

………………………………… Pg. 6

Current Competition

………………………………… Pg.7-31

S.W.O.T Strengths

………………………………… Pg34-41

Weakness

………………………………… Pg.42-49

Opportunities

……………………………….. Pg.50

Threats

………………………………… Pg.50

Conclusion

Pg. 4

………………………………… Pg. 32

Addendum Past Sales Report

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

Key Facts: Brighton Country Club

Project Name:

Brighton Country Club

Location:

Dorado, Road # 693, Puerto Rico

Construction Year:

2000

1st phase:

88 Units

Units Closed:

4

First Close:

2005 (54 months)

Options:

53 (Not in Bank /Qualified)

2nd Phase

58 Units

Units Closed:

4

Average Closings P/ Month:

N/A

Unit Type:

Townhouses, 2 story

Construction:

Concrete

Finishings:

Excellent, multiple options

Unit Models:

3,023 SQFT (Living Area)

Average Sales:

$477,300

Recreational Facilities

Under Construction (Gazebo, Basketball, Club house, Olympic Swimming)

Other:

Controlled Access

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

S.W.O.T ANALYSIS (Strengths, Weakness, Opportunities, Threats) Strengths: Internal forces that could positively affect the sale of the project

1. Strength: Location Brighton Country Club location is very good. It is located walking distance to several shopping malls. The Dorado town center is approximately .5 miles from the project.

2. Strength: Small Community The project is relatively small compared to its competitors. There are a total of 85 homes. This small size creates a feeling of intimacy. 3. Strength: Controlled Access Brighton Country Club has a controlled access system. This controlled access will help BCC residents distinguish itself from older communities. 4. Strength: Unique Design The homes in Brighton Country Club have a very unique exterior design. The homes feel as if they are part of another world.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

5. Strength: One Entrance Brighton Country Club has only one entrance and egress. This will limit vehicular traffic and control circulation. 6. Strength: Home Finishings The Brighton Country Club home finishes are significantly more elaborate than its competitors. These finishings include central air conditioning, marble floor tiles, granite counter tops, and gypsum board moldings. Weakness: Internal forces that could negatively affect the sales of the project 1. Weakness: Distressed First Phase The first phase of Brighton Country Club has suffered many setbacks. Potential clients will be hesitant about purchasing in Brighton Country Club. 2. Weakness: Temporary Entrance

The temporary entrance at Brighton Country Club is aesthetically displeasing. The area that belongs to Brighton should be maintained.

Weakness:Abandoned buildings Brighton Country Club abuts to an abandoned building. The building is not closed off.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

4. Weakness: Adjacent commercial/residential community

The adjacent commercial and residential community “over-power” Brighton Country Club’s quaint ambiance. Special care should be taken to block the views with landscaping and walls.

5. Weakness: The Sales Center

The sales center at Brighton Country Club is difficult to find. It is located far from the project and has no signs welcoming visitors.

6. Weakness: Option Program – Home Finishings The option program at Brighton Country Club appears to over-complicate the management of the home delivery. In Puerto Rico, options are not common. This is due in part to contractual and management limitations.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

7. Weakness: Construction Control

As of present, the construction crew and residents are not separated. Construction vehicles and tools can be seen through resident’s area. This makes the residents very uncomfortable.

8. Weakness: Working Guard House The guard house should be activated as soon as possible. This will give the residents a feeling of protections. 9. Weakness: Perimeter Fencing The project should close off its perimeter. This will provide security for the residents.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

10. Weakness: Recreational Facilities As of present, the recreational facilities at Brighton Country Club are not built. The facilities are a key sales element in any project. Brighton Country Club should build a temporary signs to highlight the key areas throughout the project.

12. Weakness: Single Carport Many of the units have only 1 covered carport. This can be viewed by prospective clients as an inconvenience. This is especially true from the target market that are comparing Brighton with single family homes that all have double garage.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

Opportunities: Positive external forces that could affect the sales of the project.

1. Opportunities: New entrance The new entrance will help Brighton Country Club improve its curb appeal. 2. Opportunities: Improvements to commercial facilities There is a significant amount of commercial development under construction adjacent to the Brighton Country Club project. This development will help the area and make Brighton Country Club increasingly attractive. 3. Opportunities: Marina Facilities There are plans to build a marina in the Dorado area. The developer Frederico Stubbe has received community support for his development and should begin construction in 2006.

Threats : External forces that could negatively affect the sales of the project Threats: Future Developments: There are numerous residential projects under development throughout the Dorado market area. Each new project will draw prospective clients away from Brighton country Club. Threats: Crude-Oil Prices In the past two years, the price per barrel of crude-oil has more than doubled. If prices remain high this will have a major impact on Puerto Rico’s economy. Threats: Status Issue The local economy is currently suffering from “status paralysis”. The “status” issue has divided the local government. There is a rift between the legislative and executive branches. If the two government bodies do not seek peace, the short/mid term growth forecast of the island will be limited. Threats: Community Opposition Puerto Rico is currently undergoing a strong anti- development movement. The proposed site has suffered from this phenomenon.

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DIAGNOSTIC MARKET ANALYSIS Brighton Country Club

May 21, 2005 Dorado, PUERTO RICO

Threats: Higher Interest Rates Interest rates are at historic low levels. Any significant rise in rates will make housing less affordable. A 2% increase in interest rates is equivalent to $600 additional monthly payment on a $477,000 mortgage. This payment increase would require an additional $23,000 more of yearly income.

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