Kiawah Island: A Value Proposition

Regardless of the natural or manmade features that captured your interest, it was likely confirmed by the reality that acquiring property on the Island has generally been a sound investment for decades.

When Kiawah Resort Associates (Kiawah Development Partners' sister entity) purchased the Island in 1988, development had been progressing for about 13 years. Villas were clustered near the Resort, and neighborhoods of private homes covered the western section of the Island from the beach to the river.

At that time, an average homesite was $160,000, with marsh or river lots available for less than $80,000. Homes with a view of the ocean could be purchased for $160 to $250 per square foot. At that time, KDP and its predecessor had adopted a long-range land use plan that ensures that Kiawah will grow in a measured, appealing manner, respecting nature while implemented to enhance the value of the Island's real estate. The Company's strategy has proven to be successful. Since 1993, Kiawah's homesites have increased in value by an annual average of 14.5%, with home prices increasing at an annual average of 9.7% during the same period. While water views - ocean, creek, river, and marsh - have seen the greatest appreciation, the average price of all types of Kiawah property has more than tripled since 1993. "Kiawah Island real estate values are among the highest in the Southeast," says Diana Permar, longtime Kiawah resident and a principal in Permar, inc., a real estate market research and advisory services firm based in Charleston. "Our studies have tracked double-digit average annual real appreciation on Kiawah for more than 30 years.

Kiawah values have endured through some trying economic times, including Hurricane Hugo. But KDP's vision and commitment to the highest quality in architecture, planning, and Club services have kept Kiawah at the forefront of second home community development for the past two decades."

While Kiawah real estate has offered consistent growth that every investor values, few other investment types include so much personal enjoyment in the equation. Several thousand property owners have enhanced their lives and their memories in this special setting, unlike that found anywhere else. Yet a Kiawah real estate investment is made even more valuable by its future potential. As more and more baby boomers move toward retirement - and as more families with the means seek getaways that offer respite in a sporting setting bursting with natural beauty - demand for Kiawah property (along with property values) will likely continue to benefit as in years past.

The reliable comparison of real estate to other types of investments involves the understanding of several factors. First, many investors manage their portfolios to make the most of market opportunities. Second, risk tolerance varies for different individuals, and timing and "luck" factor into the equation as well. Third, past performance does not guarantee future results. However, a look at popular indices provides an interesting perspective on the comparison of Kiawah Island real estate to other investment options.

Considering percentage growth in value, for example, Kiawah has outpaced major indices. Average homesite prices have risen 648% since 1993, and resale home prices have averaged 296% growth during the same period. By comparison, the well-known Dow Jones Industrial average, the 100+ year-old index of American blue-chip stocks, has increased 159%. The NASDAQ Composite Index grew by 152%, And the Standard & Poor's 500, a world-renowned index of 500 largest US companies, has appreciated 138%.

As these numbers prove, the average price of Kiawah properties edged out these indices. Of course, property values increased at different rates depending on location and, yes, a tiny percentage showed little change.

"Kiawah Island real estate values are among the highest in the Southeast."

Over the last 15 years, the values of golf course and wooded homesites have grown more rapidly than oceanfront or marsh sites, due in part to new releases and fresh new developments like The Settlement and Cassique. Considered over a 15-year span, however, marsh and river locales have outperformed all other homesites, experiencing an average annual increase of nearly 14%, and a total 316% average increase in price since the 1993 average homesite price of $216,948.

As Kiawah Island approaches the second decade of the new millennium, investments in its real estate are likely to continue as strong choices for diversified, highperforming portfolios. With a growing range of luxury amenities enhancing the exclusive quality of property ownership - and with the supply of new homesites becoming more limited - Kiawah's long-term prospects seem bright for investors and beachgoers alike.

Building On Long Term Value
Kiawah is roughly in the early stages of its last 10-year phase of new neighborhood and homesite development. While many of the undeveloped areas are ideal for homesites, KDP remains committed to preserving the Island's rich environmental balance, while creating value for current and future property owners.

Adding value is one of KDP's guiding principles. Unlike most planned communities, Kiawah's development has been staged over a number of years to ensure that the amenities and improvements for both the private Club as well as the Community Association remain fresh, vibrant and appealing. Some of the recent activities and upcoming improvements include:

• KDP built the boat launch and boathouse at The Preserve, and turned the property over to KICA for use by all property owners
• The opening of The Sports Pavilion in 2006
• Recent improvements at The River Course
• Expansion of Sasanqua Spa
• KICA's refurbishment of The Sandcastle, along with continued major repairs, replacement of roads, bike paths, and drainage structures
• The Town's upcoming large-scale improvement of the Kiawah Island Parkway. Construction will be overseen by KDP's landscape engineering team. It will bring the safe addition of a bike path from Kiawah to Freshfields Village.

Freshfields Village has evolved to provide property owners, local residents, and guests with a high caliber of shopping, dining, and entertainment. Future plans for Freshfields Village will create additional leisure options over the next ten years, including (we hope) plans for a Community Arts Center.

With the introduction of The Sanctuary, Kiawah Island Golf Resort has helped fulfill another directive of the Island's master plan - the promise of a five-star lodging facility! The Sanctuary brings several hundred property owner prospects to Kiawah most weeks. This type of affluent visitor was not on the Island in these numbers when the Kiawah Inn was the only guest facility. Combined with numerous improvements that the Resort has made to its golf courses, KIGR has come into its own as one of the world's finest resorts, and reinforces the appeal that augments Kiawah Island's unsurpassed reputation and profile.

Kiawah's expanding range of private and resort amenities adds value, creates market demand, and underscores the distinction of owning property on this singular sea island. But as important as anything are the the thousands of extra efforts Kiawah's property owners have made in building superb homes.