Our Path Forward Our Path Forward WELCOME Alison

Our Path Forward …

Our Path Forward … WELCOME Alison Warren President Ocean’s Reach Board of Directors

Our Path Forward … THE REASON WE’RE MEETING TODAY: • We’ve arrived at a pivotal point with our rental program • After experiencing steadily increasing occupancy and revenue levels for the past 8 years, new circumstances are coming into play • Together, we need to determine how to best sustain the return on your investment for the future

Our Path Forward … WHAT YOU’LL HEAR TODAY: 1) Local experts will share an up-to-date picture of Sanibel condominium rentals, real estate, insurance and island trends.

Our Path Forward … WHAT YOU’LL HEAR TODAY: 2) OR board members to share internal findings and information aimed at determining a path for our future within these options: • • • Enhanced Facilities New Amenities Common Area Development Office Redesign Technology Upgrades Future Funding Opportunities

Our Path Forward … THE PROCESS: • Owner discussion / working lunch at end of meeting today to determine interest levels in various potential improvements • Board meeting tomorrow -- 9 a. m. Thurs in Unit 1 D 1 -- to bring the board to consensus on lead preferences • Teams will be commissioned to follow up on key ideas • Detailed information and program proposals to be shared with owners by end of fiscal year (Sept 2014)

Our Path Forward … INTRODUCING OUR MODERATOR Stuart Langton, Ph. D. President Stuart Langton and Associates

Our Path Forward … C. A. S. I. “THE PULSE OF THE ISLAND” Sonja Smith Suitor Executive Director The Condominium Associations of Sanibel, Inc.

CONDOMINIUMS ON SANIBEL A Look Forward. . . From November 2013 CASI * The Condominium Associations of Sanibel, Inc.

CITY POLICIES FOR CONDOMINIUM ISSUES 2006: Build back ordinance granted condominiums the right to rebuild after a natural disaster 2010: Resort redevelopment ordinance granted condominiums the right to voluntarily rebuild or redevelop

SHORT TERM SANIBEL RENTALS • • • Total short term rentals: ? ? Hotels, Inns, Cottages: 739 units Timeshares: 384 units Mobile homes: 80 units Resort Condominiums: 2068 units in 32 Properties; 13 have on-site rental offices

GOAL: ISLAND PARADISE * Maintaining pristine beaches & wildlife sanctuaries * Retaining wildlife & arts foundations * Provide world class shopping, dining & accommodations

CITY: CONDO FOCUS • Permitting process & fees • Water quality • FEMA • Beach maintenance • East End cell tower / Wi. Fi • City attractions • Shared use path • Cultural center • Commercial redevelopment

OTHER ISSUES AFFECTING SANIBEL CONDOS • • • Aging Properties & Rental Units Insurance - Citizens, Flood Lee County Foreclosures FEMA

Our Path Forward … REAL ESTATE OUTLOOK Jay Richter Managing Broker John R Wood Real Estate

Our Path Forward … INSURANCE UPDATE Phil Gaylor President Lott & Gaylor Insurance

Our Path Forward … SANIBEL ISLAND TRENDS Ric Base President Sanibel-Captiva Chamber of Commerce

Tourism Update Ocean’s Reach Condominium Association November 6, 2013

Our Path Forward … QUESTIONS & ANSWERS with Our Expert Panel

Our Path Forward … OWNER PROFILE & COMPETITION Andy Boyle General Manager Ocean’s Reach Condominiums

Our Path Forward … 58 CURRENT OWNERS IN RENTAL PROGRAM: • 33 have owned for more than 20 years • 11 have owned for 10 – 20 years • 14 have owned for less than 10 years -- 5 have bought within the last 3 years; 2 by owners, 1 by a long-term guest • 2 units currently for sale

Our Path Forward … IN THE NEXT 3 – 5 YEARS (per Owner Survey): • 91% will not claim their condo as personal residence • 96% will not be selling their condo • 21% will use their condo for rental income only 70% will use for rental income and limited personal use • 39% will stay in their condo less than 2 weeks or less/year 26% will stay 3 – 5 weeks/year 35% will stay 5+ weeks/year

Our Path Forward … HISTORY OF RENTAL PROGRAM: Occupancy YEAR 1 -BEDROOM 2006 49% 57% 2007 70% 64% 2008 78% 68% 2009 75% 66% 2010 72% 69% 2011 76% 69% 2012 82% 80%

Our Path Forward … HISTORY OF RENTAL PROGRAM: Income YEAR Gross Rental Income for Association 2006 $ 1, 836, 678 2007 $ 2, 461, 756 2008 $ 2, 799, 583 2009 $ 2, 854, 250 2010 $ 2, 978, 273 2011 $ 3, 063, 141 2012 $ 3, 486, 392 2013 to date $ 3, 593, 000 2013 projected $ 3, 660, 000

Our Path Forward … COMPETITIVE ANALYSIS: • Sanibel Arms West • Sandalfoot • Pelican’s Roost • Sanibel Arms • Sanibel Moorings • Sanibel Siesta • Sundial East

Our Path Forward … OCEAN’S REACH: • Commission: 10% for direct reservations; 5% for owner rentals w/in 10% rack rate; 15 -20% total for agent bookings • Monthly fee: $455 1 -BD; $569 2 -BD inc insurance • Reserves: $1, 019 1 -BD; $1, 273 2 -BD annually • Units: 61 / 64

Our Path Forward … SANIBEL ARMS WEST: • Commission: 11% for all rentals (owners, agents, etc. ) • Monthly fee: $650 inc insurance • Reserves: None • Assessments: As needed • Units: 101 / 104 (All 2 BD)

Our Path Forward … SANDALFOOT: • Commission: 15% for all rentals; agents receive 10% on top of 15% assoc comm (25% total) • Monthly fee: $272 (1 BD); $327 (2 BD) not inc insurance • Reserves: $60, 000 / year • Assessments: As needed • Units: 58 / 60 • Other: $50 admin fee for all reservations

Our Path Forward … PELICAN’S ROOST: • Commission: 10. 8% for all rentals; agents receive 10% on top of 10. 8% assoc comm (20. 8% total) • Monthly fee: $775 • Reserves: $75 monthly reserve fee • Units: 20 / 21 (All 2 BD) • Other: Still using old DOS res system

Our Path Forward … Sanibel Arms: • Commission: 15% for all rentals; travel agents receive 10% on top of 15% assoc comm (25% total) • Monthly fee: $396 -461 1 BD; $ 670 2 BD inc insurance • Reserves: $160 1 BD; $270 2 BD • Units: 52 / 64 • Other: Does not work with Expedia or Booking. com

Our Path Forward … Sanibel Moorings: • Commission: 26% for all rentals; travel agents receive 10% and owner pays 26% on net rental • Monthly fee: $619. 21 for all units regardless of size, inc insurance • Reserves: Included in monthly maintenance fee • Units: 101 / 122 (1, 2 and 3 BD) • Other: $40 amenity fee for every reservation (tennis equip, beach chairs, kayaks) 15% upcharge on all owner supplies

Our Path Forward … Sanibel Siesta: • Commission: 19% for all rentals; agents receive 10% and assoc receives 14% (24% total); owner rentals charged 19% on rack rate regardless of discount offered • Monthly fee: $587 inc reserve funds and insurance • Units: 57 / 62 (2 BD)

Our Path Forward … Sundial East: • No on-site rental program • Monthly fee: $983 inc reserve funds and insurance • Units: 141

Our Path Forward … FINANCIAL MATTERS Doris Vigliotti Treasurer Ocean’s Reach Board of Directors

Our Path Forward … FINANCIAL MATTERS • New Florida financial reporting requirements • Insurance – Plans for future increases • Reservation system – Plans for future • Current year profits and IRS regulations

Our Path Forward … OWNER FEEDBACK David Herrick Vice President Ocean’s Reach Board of Directors

Our Path Forward … OWNER SURVEY RESULTS: Unit Conditions Push on with unit evaluations, but use great care in areas of color and style. Numerous side comments indicate that most owners support this option only as long as it does not infringe upon owners’ expression of personal preferences.

Our Path Forward … OWNER SURVEY RESULTS: Common Areas Undertake new projects judiciously and do not be too aggressive in seeking new projects. Increased fees are acceptable, but only if absolutely necessary.

Our Path Forward … OWNER SURVEY RESULTS: Standardization Don’t get too much more into standardization. Present procedures are adequate. Owners do not want to become a condo/hotel in the strictest sense of the word. Several noted that standardization was fine for kitchenware and supplies, but did not extend to TVs and electronics.

Our Path Forward … GUEST FEEDBACK Dru Doyle Director Ocean’s Reach Board of Directors

Our Path Forward … GUEST SURVEY: • Emailed 3, 767 guests from past 3 years: 10/1/10 – 10/1/13. • 19% response rate (717 responses). • Captured patterns and trends for guests who visit throughout the year: Winter (19. 94%) … Spring/Fall (30. 63%) … Summer (25. 93%) … Holidays (8. 75%) … Year-round (14. 75%).

Our Path Forward … GUEST SURVEY: • Most visit us 1 x a year … stay 5 – 7 nights … travel with spouse … reside in the Midwest … and are 55 -64 years old. • Their hobbies are relaxing on the beach, nature/wildlife viewing, wining & dining and shelling.

Our Path Forward … GUEST SURVEY: • They love our condo views and beachside locale … quiet yet convenient mid-island location … and the quality condition of our condos. • Primarily select their unit based on view. • Most are loyal to OR and do not seek out other Sanibel properties.

Our Path Forward … FUTURE TRENDS: • 67% are planning on returning to OR within the year. • 59% will budget the same # of days and dollars toward vacation travel within 3 – 5 years. • 37% will increase travel days and dollars within 3 – 5 years. • 85% said that they will not need / want additional amenities or services within the next 3 – 5 years.

Our Path Forward … GUEST SUGGESTIONS FOR IMPROVEMENT: Update! (60+ responses) “Just keep updating” … “Keep interiors updated, fresh and inviting” … “Provide consistent updated furnishings” …“Update furnishings, baths, kitchens” … “More modern looks would be great” … “Needs updating” … “Furniture is outdated in some units” … “More frequent furniture and carpet updates”… “Update kitchens and appliances” … “Modernize and update” …“Update sofa, mattresses , porch furniture” … “Update cookware ” … “Some condos need updating more than others”

Our Path Forward … GUEST SUGGESTIONS FOR IMPROVEMENT: Clean and Fresh (60+ responses) “Just keep updating and keep units clean” … “Keep it clean, keep it fresh” … “Rugs should be cleaned more often” … “Keep clean and in good condition” … “Clean, fresh and updated” … “Keep updated! Clean well! Get rid of carpet! Good mattresses and pillows!” … “Units are starting to get ‘worn’ from so much use and need new furnishings, carpets cleaned, etc. on a more frequent basis” … “Keep condo up-to-date, clean and well-stocked” … “Keep them clean and well maintained”

Our Path Forward … GUEST SUGGESTIONS FOR IMPROVEMENT: New Beach Services (45 responses) • Assistance with beach chairs / umbrella set-up from staff • Standard beach items in every unit (umbrellas, toys, coolers) • Bathroom close to the pool and beach • Poolside towel service; free beach towels in unit • Better beach furniture (lounge chairs) • More shade • Tiki bar & grille

Our Path Forward … TECHNOLOGY David Herrick Vice President Ocean’s Reach Board of Directors

Our Path Forward … TECHNOLOGY: Internet • Adequate bandwidth is the foundation of most electronic entertainment devices in the condos. • The current cable arrangement is not long term. • Potential alternatives: wireless, satellite, expanded cable services.

Our Path Forward … TECHNOLOGY: Audio Devices (Music) • Records, tapes and CDs are a thing of the past. • Increasingly, guests bring their music via audio files in hand-held devices or from the internet. • Units need a quality stereo / speaker system to which guests can connect their devices.

Our Path Forward … TECHNOLOGY: Video (Television / Movies) • Current satellite service is adequate. • Standard TV setup: 40” living room; 25” bedroom. • TV and internet technology are merging in the future: * Multiple HDMI inputs * Smart feature * Streaming video * Blu-Ray / DVD player * Sound bar

Our Path Forward … TECHNOLOGY: RNS (Rental Network System) • Current system has reservation, accounting and data mining components. • Presently adequate but may not be our system of the future. • Task force needed to evaluate options.

Our Path Forward … MASTER PLAN: Common Areas & Office Design Andy Boyle / Dru Doyle Ocean’s Reach Board of Directors

Our Path Forward … MASTER PLAN CONCEPTS: Common Areas …. . …………. George Fogg Office Redesign ………. Amy Nowacki

Our Path Forward … MASTER PLAN GOALS: Common Areas • Beautify and update common areas to create sense of cohesion throughout the property • Enhance curb appeal • Design rest and relaxation areas including private, restful, shaded seating and places for outdoor business work • Create social gathering areas (families, couples, young adults) • Accentuate and develop osprey viewing area • Develop educational area through signage

Our Path Forward … COMMON AREA IDEAS: Grove and Pond • Shell-paved walking path • Seating and shade pods • Citrus grove • Extend butterfly garden • Nature trail in south undeveloped area • Clean out invasive plants

Our Path Forward … COMMON AREA IDEAS: Grove and Pond • Elevated bridge and boardwalk to west preserve • Create wetlands area • Create osprey area with plantings and signage • Planting renewal

Our Path Forward … COMMON AREA IDEAS: Beachside • Connect buildings with walkways • Clean up beach vegetation • More native plants

Our Path Forward … COMMON AREA IDEAS: Buildings • Extend landscaping into paver lot w/ seating and shade pod • Move handicapped parking closer to ramp • More tropical plants and palm trees • Tear down paver ledgers • More native plants

Our Path Forward … COMMON AREA IDEAS: Guest Services • Create a “Wow” for guest entrance with more of a Welcome Center feel • Add directional signage

Our Path Forward … MASTER PLAN GOALS: Office Redesign • Create a more open and inviting welcome center for guests, including after-hours arrivals • Create after-hours guest lounge with library and computer/printer access • Create more work space • Create more storage space

Our Path Forward … MASTER PLAN CONCEPT: Office Redesign • Use current library space for Charlie’s storage • Create library and guest lounge with computers, seating and restroom access in space where Andy and Dina currently work • Andy relocates to back office area with Charlie and two staff members work behind new Guest Services counter • French doors added to exterior entrance – one side to Guest Services, the other to Guest Lounge – with lock-out capabilities

Our Path Forward …

Our Path Forward … WORKING LUNCH & OWNER DISCUSSION Start to develop a path forward with priorities, levels and methods of funding.

Our Path Forward … HOW DO WE SUSTAIN GROWTH IN THE FUTURE? Some of the ideas presented today… 1. FACILITIES: Update unit interiors … Keep them fresh and clean 2. AMENITIES: “Beach Butler” … Standard beach items … Pool / beach bathroom … Towel service … Lounge chairs … Tiki bar 3. COMMON AREAS: Grove area … Beachside …. Buildings … Guest Services 4. OFFICE DESIGN: Redesign with “Welcome Center” feel 5. TECHNOLOGY: Upgrade internet … Audio/Video … RNS res system 6. FUTURE FUNDING: Modify fees … commission structure … special assessment. . . owner sponsorship of individual projects of interest

Our Path Forward … THANK YOU! Please join us at 3: 00 p. m. at the Sanibel Library for the Ocean’s Reach Annual Meeting.