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Approximately 65% of Vacation Club owners are enrolled in Traveler Plus. During the year ended December 31, 2017, approximately 8% of Vacation Club owners utilized the RCI exchange network.

Vacation Club Resort Locations and Amenities

As shown in the map below, Bluegreen’s Vacation Club resorts are primarily located on the U.S. East Coast and Midwest. The 44 direct-exchange resorts available to Traveler Plus members are concentrated along the West Coast and Hawaii. Together, this provides a broad offering across the United States and the Caribbean.

Vacation Club resorts are primarily “drive-to” resort destinations and approximately 85% of Bluegreen’s Vacation Club owners live within a four-hour drive of at least one of Bluegreen’s resorts. Bluegreen resorts are located in popular vacation destinations, such as Florida, South Carolina, North Carolina, Tennessee, Virginia and Nevada, and represent

a diverse mix of resort and urban destinations, allowing Vacation Club owners the ability to customize their vacation experience. In addition, Bluegreen offers its Vacation Club owners access to Caribbean locations, including Aruba.

Bluegreen’s resort network offers a diverse mix of experiences and accommodations. Unlike some of Bluegreen’s competitors that maintain static brand design standards across resorts and geographies, Bluegreen seeks to design resorts that capture the uniqueness of a particular location. Bluegreen’s distinctive resorts are designed to create an authentic experience and connection to their unique and varied locations.

Bluegreen’s resorts typically feature condominium-style accommodations with amenities such as fully equipped kitchens, entertainment centers and in-room laundry facilities. Many resorts feature a clubhouse (including a pool, game room, lounge), hotel-type staff and concierge services.

Bluegreen also owns a 51% interest in Bluegreen/Big Cedar Vacations, which develops, markets and sells VOIs at three premier wilderness-themed resorts adjacent to Table Rock Lake near Branson, Missouri: The Bluegreen Wilderness Club at Big Cedar, The Cliffs at Long Creek and Paradise Point. The remaining 49% interest in Bluegreen/Big Cedar Vacations is held by Big Cedar, LLC, (“BC LLC”), an affiliate of Bass Pro. As a result of Bluegreen’s controlling interest in Bluegreen/Big Cedar Vacations, our consolidated financial statements include the results of operations and financial condition of Bluegreen/Big Cedar Vacations.

Located next to the luxury Big Cedar Lodge, The Bluegreen Wilderness Club is a 40-acre resort overlooking Table Rock Lake with sprawling views of the surrounding Ozarks. Vacation Club owners enjoy a variety of amenities, including a 9,000 square foot clubhouse, lazy river and rock-climbing wall, in addition to full access to the amenities and activities of Big Cedar Lodge.  The Cliffs at Long Creek offers fully furnished homes that can accommodate up to 13 people while providing access to a clubhouse and amenities at The Bluegreen Wilderness Club. Paradise Point offers spacious vacation villas with direct access to Table Rock Lake and the Bass Pro Long Creek Marina.

Vacation Club Resorts



Future Resorts and Acquisition of Additional Inventory

Bluegreen believes that it currently has adequate timeshare inventory on hand, or available for sale through arrangements with third parties in connection with its capital-light business strategy, to satisfy its projected sales of VOIs for 2017 and a number of years thereafter.  However, Bluegreen may decide to acquire or develop inventory in the future.  It is also expected that development activities will continue at resorts developed by Bluegreen/Big Cedar Vacations and other Bluegreen sites on a limited basis.

VOI Exchange Networks, the Bluegreen Traveler Plus™ Program, and Other Strategic Alliances

Bluegreen believes that its VOIs are made more attractive by its alliance with Choice Hotels, its participation in third-party exchange networks, its Traveler Plus™ program and other strategic affiliations with third-party resort developers.  In 2013, Bluegreen entered into a five-year strategic alliance agreement with Choice Hotels.  Choice Hotels currently franchises approximately 6,400 hotels in more than 40 countries and territories and its brands include the Ascend Hotel Collection®, Comfort Inn®, Comfort Suites®, Quality®, Sleep Inn®, Clarion®, Cambria® hotels and suites, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge® and Rodeway Inn®.  Bluegreen’s relationship with Choice Hotels’ impacts several areas of Bluegreen’s business and, while there is no assurance as to the success of the relationship, it includes a sales and marketing alliance component that Bluegreen believes enables it to leverage Choice Hotels’ brands, customer relationships and marketing channels to market Bluegreen’s VOI offerings.  Additionally, subject to the terms and conditions of the agreements, including specified payments to Choice Hotels, Bluegreen Vacation Club resorts may be branded as part of the Ascend Hotel Collection®.  As of December 31, 2016, a total of 29 Bluegreen Vacation Club resorts were branded as part of the Ascend Hotel Collection®.  Also, Bluegreen Vacation Club members may enroll as members of the Choice Hotels loyalty program, Choice Privileges®, and for a fee can convert their Bluegreen Vacation Club points into Choice Privileges® points which can be used for stays at participating Choice Hotels.  Additionally, for a fee, members of the Bluegreen Traveler Plus™ program may exchange their vacation points for stays at Choice Hotels’ Ascend Hotel Collection® properties subject to the terms and conditions of the program.

Bluegreen Vacation Club members may also participate in an unaffiliated external exchange network, Resort Condominiums International, LLC (“RCI”).  The RCI exchange network allows an owner to exchange stays in their VOI for occupancy at nearly 4,300 participating resorts located throughout the world in more than 100 countries, based upon availability and the payment of a variable exchange fee.  The annual membership fees of RCI are included in the Bluegreen Vacation Club dues.  In 2016, approximately 9% of Bluegreen Vacation Club members utilized the RCI exchange network for an exchange of two or more nights.  Most of the Bluegreen Vacation Club resorts are rated in one of the two highest categories by RCI (Gold Crown and Silver Crown).  

Bluegreen Vacation Club members, for an additional annual fee, may also participate in the Bluegreen Traveler Plus™ program, which allows them to use their points for a variety of hotel stays, RV site stays within the “Coast to Coast” network, or various cruise vacations.  Also, for a nominal fee, Bluegreen Vacation Club members who purchased or upgraded their VOI since July 1, 2007 and participate in the Bluegreen Traveler Plus™ program have the ability to use their vacation points to reserve accommodations in 43 additional resort locations through Bluegreen’s alliances with other resort development companies (“Direct Exchange”).

No assurance can be given that Bluegreen’s resorts will continue to participate in the RCI or Direct Exchange networks, or that Bluegreen’s customers will continue to be satisfied with these networks or the Bluegreen Traveler Plus™ program.  In addition, Bluegreen’s relationship with Choice Hotels may not be received favorably by Choice’s or Bluegreen’s customers and may not have a positive impact on Bluegreen’s operating results or financial condition.  If Bluegreen does not continue to participate in qualified exchange networks or maintain other strategic alliances, including if Bluegreen’s resorts are not included in such networks or alliances, or if such networks or other strategic alliances do not operate effectively, Bluegreen’s financial condition, results and business could be materially adversely affected.

Marketing and Sale of Inventory



Bluegreen usesVOI sales are typically generated by attracting prospective customers to tour a resort and attend a sales presentation. Bluegreen’s sales and marketing platform utilizes a variety of methods to attract prospective purchasers ofgenerate new owner prospects, drive tour flow and sell VOIs including selling discount vacation packages either face-to-face or through telemarketing efforts to consumersin its Vacation Club. Bluegreen meets in connection with variousutilizes marketing alliances (as discussedwith nationally-recognized brands, which provide exclusive access to venues which target consumers generally matching Bluegreen’s core demographic. In addition, Bluegreen sources sales prospects through programs which generate leads at high-traffic venues and in greater detail below)high-density tourist locations and other arrangements,events, as well as from telemarketing and referrals of prospective purchasers from existing VOI owners.  Bluegreen sometimes provides hotel accommodations or accommodationsowners and exchangers and renters staying at Bluegreen’s properties.

Many of Bluegreen’s programs involve the sale of a discounted vacation package that typically includes a two to three night stay in close proximity to one of Bluegreen’s resorts to prospective purchasers at reduced ratesresort sales offices and requires participation in exchange for their touring onea sales presentation (a sales tour). Vacation packages are typically sold either in retail establishments, such as Bass Pro stores and outlet malls, or via telemarketing. During the year ended December 31, 2017, Bluegreen sold over 245,000 vacation packages and 48% of Bluegreen’s resorts.

Additionally,VOI sales were derived from vacation packages. As of December 31, 2017, Bluegreen offershad a sampler programpipeline of over 199,000 vacation packages sold, which allows purchasers of this producttypically convert to enjoy substantially the same accommodations offered to Bluegreen Vacation Club members during a trial period, which is generally one or two years.  Bluegreen believes that it benefits from the sampler program as it gives Bluegreen an opportunity to market its VOIs to customers when they use their trial membershipstours at a Bluegreen resort and to recapture a portionrate of the costs incurred in connection with the initial marketing to prospective customers.

In addition to attracting new customers, Bluegreen seeks to sell VOIs to its existing VOI owners (“owner sales”)54%.  Owner sales generally have lower marketing costs and typically result in relatively higher operating margins than sales generated through other marketing channels.  During 2016, owner sales accounted for 46% of Bluegreen’s system-

wide sales.  However, Bluegreen has recently increased, and expects to continue to increase, its marketing efforts to new customers as compared to existing owners as it believes that its ability to continue to sell VOIs to its current existing owner base could diminish over time without continued sales to new customers.  Accordingly, Bluegreen expects that its marketing expenses may increase in the future.



Bluegreen uses both “permission” marketing and branding programs.  “Permission” marketing methods involve obtaining the prospective purchasers’ permission, directly or indirectly, to contact them in the future regarding an offer to purchase a product or service.  Branding involves forming alliances with third-party entities that possess what Bluegreen believes to be a nationally or regionally known brand name, a good reputation and a customer base with similar demographic characteristics to Bluegreen’s target market.

One of Bluegreen’s wholly-owned subsidiaries has an arrangement with Big Cedar, LLC (“Big Cedar”), an affiliate of Bass Pro, Inc. (“Bass Pro”), pursuant to which, Bluegreen’s subsidiary owns 51% of Bluegreen/Big Cedar Vacations and Big Cedar owns the remaining 49%.  Bluegreen/Big Cedar Vacations develops, markets, and sells VOIs at the Bluegreen Wilderness Club at Big Cedar, a wilderness-themed resort adjacent to the Big Cedar Lodge, a luxury hotel resort owned by Big Cedar, on the shores of Table Rock Lake in Ridgedale, Missouri.  Bluegreen/Big Cedar Vacations also develops, markets, and sells timeshare interests in The Cliffs at Long Creek and Paradise Point Resort.  Bluegreen/Big Cedar Vacations pays Big Cedar a fee upon sales of certain timeshare interests for promotional, marketing and advertising services.

Bluegreen also has an exclusive marketing agreement with Bass Pro, a privately-heldnationally-recognized retailer of fishing, marine, hunting, camping and sports gear.  Pursuant to the agreement,gear, that provides Bluegreen haswith the right to market VOIsand sell vacation packages at kiosks

in each of Bass Pro’s retail locations. As of December 31, 2016,2017, Bluegreen marketed VOIssold vacation packages in 68 of Bass Pro’s stores. These marketing efforts include offers for the sale of discounted vacation packages which require the purchaser to attendBass Pro has a timeshare sales presentation, where permitted by law.  loyal customer base that strongly matches Bluegreen’s core demographic. Under the agreement, Bluegreen also has the right to market VOIs in Bass Pro’sPro catalogs and on its website, and Bluegreen hasto access to Bass Pro’s customer lists.database. In exchange, Bluegreen compensates Bass Pro based on VOI sales generated through the overall success of these marketing activities.  The amount of compensation is dependent on the level of additional marketing efforts required by Bluegreen to convert the prospect into a sale and a defined time frame for such marketing efforts.program. No compensation is paid to Bass Pro under the marketing agreement on sales made byat Bluegreen/Big Cedar Vacations of VOIs owned by Bluegreen/Big Cedar Vacations.  In accordance withVacations’ resorts. During the agreement, Bluegreen makes an annual prepayment to Big Cedar by February of each year.  The prepayment is an advance payment for anticipated commissions estimated to be generated during the upcoming year, as determined by Bluegreenyears ended December 31, 2017, 2016 and Big Cedar, not to exceed $5.0 million.  No additional commissions are paid to Big Cedar during any year until the annual prepayment for that year has been fully earned.  During 2016,2015, VOI sales of VOIs to prospects and leads generated by the marketing arrangementagreement with Bass Pro accounted for approximately 15%, 16% and 20%, respectively, of Bluegreen’s VOI sales volume. Bluegreen’s marketing agreementalliance with Bass Pro is for a term expiringoriginated in January 2025, subject to early termination in whole or in part under certain circumstances.  There is no assurance that Bluegreen will be able to maintain, extend or renew its marketing relationship with Bass Pro,2000, has been renewed twice and Bluegreen’s sales would be materially and adversely impacted if Bluegreen’s relationship with Bass Pro ended.currently runs through 2025.



As previously described, Bluegreen entered into a five-yearhas an exclusive strategic relationship with Choice Hotels in 2013.  This relationship impactsthat covers several areas of Bluegreen’sits business, and, while there is no assurance as to the success of the relationship, it includesincluding a sales and marketing alliance component which Bluegreen believesthat enables Bluegreenit to leverage Choice Hotels’ brands, customer relationships and marketing channels to market Bluegreen’s VOI offerings.  Choice Hotels’ obligations under the agreementssell vacation packages. Vacation packages are subjectsold through customer reservation calls transferred to Bluegreen making specified paymentsfrom Choice and through outbound telemarketing methods utilizing Choice’s customer database. In addition, 36 of Bluegreen’s resorts are part of Choice’s Ascend Hotel Collection, which provides Bluegreen with the opportunity to market to Choice Hotel guests staying at its resorts. Bluegreen’s strategic relationship with Choice Hotels originated in 2013 and was extended in August 2017 for a term of 15 years, with an additional 15-year renewal term thereafter unless either party elects not to renew the arrangement.

In addition, Bluegreen generates leads and sells vacation packages through its relationships with various other retail operators and entertainment providers. As of December 31, 2017, Bluegreen had kiosks in 19 outlet malls, strategically selected based on proximity to major vacation destinations and strong foot traffic of consumers matching its core target demographic. Bluegreen generates vacation package sales from these kiosks. Bluegreen also generates leads at malls, outlets and high-density locations or events, where contact information for sales prospects is obtained through raffles, giveaways and other attractions. Bluegreen then seeks to sell vacation packages to such prospects, including through telemarketing efforts or third-party vendors. As of December 31, 2017, Bluegreen had lead generation operations in over 500 locations.

Bluegreen believes that its diverse strategic marketing alliances (including those with Bass Pro, Choice Hotels and other retail operators and entertainment providers) deliver a strategic advantage over certain other termscompetitors that rely primarily on relationships with their affiliated hotel brands to drive lead generation and conditions.new owner growth. Bluegreen has experience in identifying marketing partners with brands that attract Bluegreen’s targeted owner demographic and building successful marketing relationships with those partners. Bluegreen also attempts to structure these marketing alliances to compensate its partners with success-based payments, rather than flat fees for the use of their brand or facilities for lead generation. Bluegreen believes that the variety in its marketing relationships has facilitated a healthy mix of new owner sales vs. existing owner sales that compare favorably to its competitors. During the year ended December 31, 2017, 51% of Bluegreen’s VOI sales were to new owners.



Typically,In addition to attracting new customers, Bluegreen also seeks to sell additional VOI points to its existing Vacation Club owners. These sales generally have lower marketing costs and result in higher operating margins than sales generated through other marketing channels. During the years ended December 31, 2017, 2016 and 2015, sales to existing Vacation Club owners accounted for 49%, 46% and 48%, respectively, of Bluegreen’s system-wide sales of VOIs, net. Bluegreen targets a balanced mix of new customer and existing Vacation Club owner sales to drive sustainable long-term growth. The number of owners in Bluegreen’s Vacation Club has increased at a 5% compound annual growth rate between 2012 and 2017, from approximately 170,000 owners as of December 31, 2012 to approximately 213,000 owners as of December 31, 2017.

Bluegreen operates 23 sales offices, aretypically located adjacent to certain of its resorts and are staffed with sales representatives and sales managers, allmanagers. As of whom areDecember 31, 2017, Bluegreen employees.had over 3,000 employees dedicated to VOI sales and marketing. Bluegreen sponsorsutilizes a uniform sales process, offers ongoing training for its personnel.

It is Bluegreen’s policy to require its sales staff to provide each VOI customer with a written disclosure statement prior topersonnel and maintains strict quality control policies. During the time the customer signs a purchase agreement.  The purpose of this disclosure statement is to provide relevant information regarding VOI ownership at the resort and membership in the Bluegreen Vacation Club.  Pursuant to Bluegreen’s policies, the statement must be signed by every purchaser.  Purchasers are entitled to cancel purchase agreements within applicable legal rescission periods.  Substantially all VOI purchasers visit oneyear ended December 31, 2017, 91% of Bluegreen’s sales were generated from 16 of its sales offices, priorwhich focus on both new customer and existing Vacation Club owner sales. Bluegreen’s remaining 7 sales offices are primarily focused on sales to orexisting Vacation Club owners staying at the timerespective resort. In addition, Bluegreen utilizes its telesales operations to sell VOIs to Vacation Club owners.

Flexible Business Model

Bluegreen’s business model is designed to give it flexibility to capitalize on opportunities and adapt to changing market environments. Bluegreen has the ability to adjust its targeted mix of capital-light vs. developed VOI sales, sales to new customers vs. existing Vacation Club owners, and cash vs. financed sales. While Bluegreen may pursue opportunities that impact its short-term results, Bluegreen’s long-term goal is to achieve sustained growth while maximizing earnings and cash flow.

Note: Cash sales represent the portion of Bluegreen’s system-wide sales of VOIs, net that is received from the customer in cash within 30 days of purchase.

VOI Sales Mix

Bluegreen’s VOI sales include:

Fee-Based Sales

Bluegreen offers sales and marketing services to third-party developers for a commission. Under these fee-based sales arrangements, which are typically entered into on a non-committed basis, Bluegreen sells the third-party developers’ VOIs as Vacation Club interests through its sales and marketing platform. Bluegreen also provides third-party developers with administrative services, periodic reporting and analytics through its proprietary software platform. Bluegreen seeks to structure the fee for these services to cover selling and marketing costs, plus an operating profit. Historically Bluegreen has targeted a commission rate of 65% to 75% of the VOI sales price. Notes receivable originated in connection with fee-based sales are held by the third-party developer and, in certain cases, are serviced by Bluegreen for an additional fee. In connection with fee-based sales, Bluegreen is not at risk for development financing and has no capital requirements, thereby increasing return on invested capital. Bluegreen also typically obtains the HOA management contract associated with these resorts.

Just-In-Time (JIT) Sales

Bluegreen enters into JIT inventory acquisition agreements with third-party developers that allow Bluegreen to buy VOI inventory in close proximity to when Bluegreen intends to sell such VOIs. While Bluegreen typically enters into such arrangements on a non-committed basis, Bluegreen may engage in committed arrangements under certain circumstances. Similar to fee-based sales, JIT sales do not expose Bluegreen to risks for development financing. However, unlike fee-based sales, Bluegreen holds the consumer finance receivables originated in connection with JIT sales. While JIT sales accounted for only 4% of system-wide sales of VOIs, net for the year ended December 31, 2017, JIT arrangements are often entered into in connection with fee-based sales arrangements.

Secondary Market Sales

Bluegreen acquires VOI inventory from HOAs and other owners generally on a non-committed basis. These VOIs are typically obtained by the applicable HOA through foreclosure or termination in connection with HOA maintenance fee defaults. Accordingly, Bluegreen generally purchases VOIs from secondary market sources at a greater discount to retail price compared to developed VOI sales and JIT sales. During the year ended December 31, 2017, secondary market sales accounted for 16% of Bluegreen’s system-wide sales of VOIs, net.

Developed VOI Sales

Developed VOI sales are sales of VOIs in resorts that Bluegreen has developed or acquired (excluding inventory acquired pursuant to JIT and secondary market arrangements). During the year ended December 31, 2017, developed VOI sales accounted for 26% of Bluegreen’s system-wide sales of VOIs, net. Bluegreen holds the notes receivable originated in connection with developed VOI sales. Bluegreen also typically obtains the HOA management contract associated with these resorts.

Future VOI Sales

Completed VOI inventory increases or decreases from period to period due to the acquisition of inventory through JIT and secondary market arrangements, development of new VOI units, reacquisition of VOIs through notes receivable defaults and changes to sales prices and completed sales. As of December 31, 2017 and 2016, Bluegreen owned completed VOI inventory (excluding units not currently being marketed as VOIs, including model units) and had access to additional completed VOI inventory through fee-based and JIT arrangements as follows (dollars are in thousands and represent the then-estimated retail sales value):

Based on current estimates and expectations, Bluegreen believes this inventory, combined with inventory being developed by Bluegreen or its third-party developer clients, and inventory that Bluegreen may reacquire in connection with mortgage and maintenance fee defaults, can support Bluegreen’s VOI sales at its current levels for over three years. Bluegreen maintains relationships with numerous third-party developers and expect additional fee-based and JIT relationships to continue to provide high-quality VOI inventory to support its sales efforts. In addition, Bluegreen is focused on strategically expanding its inventory through development at five of its resorts over the next several years. Bluegreen intends to continue to strategically evaluate opportunities to develop or acquire VOI inventory in key strategic markets where Bluegreen identifies growing demand and has already established marketing and sales networks.

During the years ended December 31, 2017 and 2016, the estimated retail sales value and cash purchase price of the VOIs Bluegreen acquired through secondary market arrangements were as follows (dollars in thousands):

In addition to inventory acquired through secondary market arrangements and in connection with notes receivable defaults, Bluegreen expects to acquire inventory through six JIT arrangements during 2018, four of which provide for committed purchases for 2018, and development activities. Development activities currently consist primarily of additional VOI units being developed at The Cliffs at Long Creek in Ridgedale, Missouri, and at the Fountains in Orlando, Florida.

Management and Other Fee-Based Services

Bluegreen earns recurring management fees for providing services to HOAs. These management services include oversight of housekeeping services, maintenance and certain accounting and administrative functions. Bluegreen believes its management contracts yield highly predictable cash flows that do not have the traditional risks associated with hotel management contracts that are linked to daily rate or occupancy. Bluegreen’s management contracts are typically structured as “cost-plus” management fees, which means Bluegreen generally earns fees equal to 10% to 12% of the costs to operate the applicable resort and have an initial term of three years with automatic one-year renewals. As of December 31, 2017, Bluegreen provided management services to 48 resorts. Bluegreen also earns recurring management fees for providing services to the Vacation Club. These services include managing the reservation system and providing owner billing and collection services. Bluegreen’s management contract with the Vacation Club provides for reimbursement of its costs plus a fee equal to $10 per VOI owner. Bluegreen may seek to expand its management services business, including to provide hospitality management services to hotels for third parties.

In addition to HOA and club management services, which provide a recurring stream of revenue, Bluegreen provides other fee-based services that produce revenues without the significant capital investment generally associated with the development and acquisition of resorts. These services include, but are not limited to, title and escrow services for fees in connection with the closing of VOI sales, servicing notes receivable held by third parties, typically for a fee equal to 1.5% to 2.5% of the principal balance of the serviced portfolio, and construction management services for third-party developers, typically for fees equal to 3% of the cost of construction of the project. Bluegreen also receives revenues from retail and food and beverage outlets at certain resorts.



Customer Financing



Bluegreen generally offers qualified purchasers financing offor up to 90% of the purchase price of its VOIs to its VOI customers who meet certain FICO® score-based underwriting standards.VOIs. The typical financing extended by Bluegreen on a VOI during

2016 providedprovides for a term of 10ten years and a fixed interest rate.  However, Bluegreen also encourages purchasers to finance their purchase with a loan having a shorter termrate that is determined by offering a lower interest rate on those loans.  In connection with Bluegreen VOI sales, Bluegreen delivers the property deed to the trusteeFICO score of the Bluegreen Vacation Club on behalfborrower, and the amount of the purchaser and obtains a mortgage on the purchaser’s VOI.

Purchasers of VOIs are generally required to make a down payment of at least 10% of the VOI sales price.  As part of Bluegreen’s continued efforts to improve its operating cash flows, Bluegreen incentivizes its sales associates to encourage cash sales, and Bluegreen promotes a point-of-sale credit card program sponsored by a third party financial institution.  As a result of such efforts, Bluegreen has increased both the percentage of its sales that are 100% cash and its average down payment on financed sales.  Including down payments received on financed sales, approximately 41% of Bluegreen VOI sales during 2016 were paid in cash within approximately 30 days from the contract date.

See “Products and Services — Vacation Ownership” above for more information about the demographic profile of Bluegreen’s typical customer.  See “Sales of Receivables/Pledging of Receivables” below for information regarding Bluegreen’s receivable financing activities.

Loan Underwriting

Prior to December 15, 2008, Bluegreen’s VOI financing was not subject to any significant loan underwriting criteria and no FICO® score was obtained prior to extending credit.  Instead, customer financing on sales of VOIs typically only required the following: (i) receipt of a minimum down payment of 10% of the purchase price; (ii) a note and mortgage (or deed of trust); and (iii) other closing documents by the purchaser and Bluegreen.

Effective December 15, 2008, Bluegreen implemented a FICO® score-based credit underwriting program.  Following implementation, subject to certain limited exceptions, Bluegreen no longer provided financing to customers with FICO® scores below 500, and new customers with FICO® scores between 500 and 599 were required to make a minimum cash down payment of 20%.  Effective January 1, 2010, subject to certain limited exceptions, Bluegreen further increased its FICO® score-based credit underwriting standards such that Bluegreen no longer originates financing to customers with FICO® scores below 575 subject to certain limited exceptions. However, Bluegreen may, from time to time, offer certain introductory products to customers with different FICO®  scores, finance and down payment terms that it intends to hold in its portfolio.  Additionally, Bluegreen may provide financing to customers with no FICO®  scores if the customer makes a minimum required down payment.  For loans with an outstanding balance as of December 31, 2016 that were originated from December 15, 2008 through December 31, 2009, the borrowers’ weighted average FICO® score at the point of sale was 700.  For loans with an outstanding balance as of December 31, 2016 that were originated from January 1, 2010 through December 31, 2016, the borrowers’ weighted average FICO® score at the point of sale was 706.  Further information is set forth in the following table:

Bluegreen encourages purchasers to make higher down payments and accept shorter loan period terms by offering lower interest rates.  Bluegreen may also from time to time offer lower rates for purchasers with specific FICO® scores or purchasers of higher volume point packages.  In addition, where permitted under applicable laws, rules and regulations, purchasersexisting ownership. Purchasers may receive aan additional 1% discount in the interest rate by participating in Bluegreen’s pre-authorized payment plan. As of December 31, 2016, borrowers with respect to approximately2017, 95% of Bluegreen’s serviced VOI notes receivable participated in Bluegreen’s pre-authorized payment plan.

Effective November 1, 2008, Bluegreen increased During the interest rates charged on new loans.  Theyear ended December 31, 2017, the weighted-average interest rate on Bluegreen’s VOI notes receivable was 15.3%. Bluegreen’s typical VOI note receivable has a term of ten years, has a fixed interest rate, is fully amortizing in equal installments, and may be prepaid without penalty.

VOI purchasers are generally required to make a down payment of at least 10% of the sales price. As part of Bluegreen’s continued efforts to manage operating cash flows, Bluegreen incentivize its sales associates to encourage cash sales and higher down payments on financed sales, with a target of 40-45% of the VOI sales price collected in cash. Bluegreen also promotes a point-of-sale credit card program sponsored by a third-party financial institution. As a result of these efforts, Bluegreen has increased both the percentage of sales that are fully paid in cash and the average down payment on financed sales. Including down payments received on financed sales, approximately 39% of Bluegreen’s system-wide sales of VOIs, net during the year ended December 31, 2017 were paid in cash within approximately 30 days from the contract date.

See “Sales/Financing of Receivables” below for additional information regarding Bluegreen’s receivable financing activities.

Loan Underwriting

Bluegreen generally does not originate financing to customers with FICO scores below 575. Bluegreen may provide financing to customers with no FICO score if the customer makes a minimum required down payment of 20%. For loans made during 2017, the borrowers’ weighted-average FICO score after a 30-day, “same as follows:cash” period from the point of sale was 724. Further information is set forth in the following table:



Collection Policies



Financed VOI sales of VOIs originated by Bluegreen typically utilize a note and mortgage. Collection efforts related to the timesharethese VOI loans are managed by Bluegreen and are handled by a staff of collectors, assisted by a mortgage collection computer system.Bluegreen. Bluegreen’s collectors are incentivized through a performance-based compensation program.  Technological capabilities include, but are not limited to, automated lock box and clearing house processing.



Bluegreen generally makes collection efforts with respect to customersVacation Club owners with outstanding loans secured by their VOI by mail, telephone and by telephone.in certain cases, email (as early as 15 days past due). Telephone contact generally commences when an account is as few as 10approximately ten days past due. At 30 days past due, Bluegreen mails a collection letter is sent to the owner, if a U.S. residentsresident, advising the customer that if the loan is not brought current, the delinquency will be reported to thea credit reporting agencies.agency. At 60 days delinquent,past due, Bluegreen sendsmails a letter to the customer by mailowner advising that theyhe or she may be prohibited from making any future reservations for lodging at a resort. If the delinquency continues, atAt 90 days past due, Bluegreen stops the accrual of, and reversesreverse previously accrued but unpaid, interest on the note receivable and mails a “Notice of Intent to Cancel Membership,” which informsnotice informing the customerowner that unless the delinquency is cured within 30 days, Bluegreen will terminate the customer’sunderlying VOI ownership. If the customeran owner fails to respond to such correspondencebring the account current within the given timeframe, the loan will beis defaulted and the customer’sowner’s VOI is terminated. In that case, Bluegreen sendsmails a final letter, typically at approximately 120 days delinquent, to notifypast due, notifying the customerowner of the loan default and the termination of the customer’shis or her beneficial interest in the VOI property. Thereafter, Bluegreen seeks to resell the VOI to a new purchaser.  Historically, Bluegreen has typically not sought to collect a deficiency on defaulted notes.



Recently, Bluegreen’s collection efforts have been increasingly impacted by the receipt of cease and desist letters from attorneys purporting to represent certain VOI owners and have encouraged such owners to become delinquent and ultimately default on obligations.  Following receipt, contact of VOI owners is ceased, unless otherwise allowed by law.

Allowance for Credit Losses



Under timesharevacation ownership accounting rules, Bluegreen estimates uncollectiblesuncollectible VOI notes receivable based on historical uncollectiblesamounts for similar VOI notes receivable and doesdo not consider the value of the underlying collateral. Bluegreen holds large amountspools of homogeneous VOI notes receivable and assessesassess uncollectibility based on pools of receivables. In estimating future credit losses, Bluegreen does not use a single primary indicator of credit quality but instead evaluates its VOI notes receivable based upon a combination of factors, including a static pool analysis, the aging of the respective receivables, current default trends, and prepayment rates by origination year as well asand the borrowers’ FICO® scores of the borrowers. scores.



Substantially all defaulted VOI notes receivable result in the holder of the notesuch receivable acquiring the related VOI that secured the notesuch receivable, typically soon after default and at little or no cost. The reacquired VOI is then available for resale in the normal course of business.



See “Item 7 – Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information about the performance of Bluegreen’s notes receivable portfolio.



Sales of Receivables/PledgingSales/Financing of Receivables



Bluegreen’s ability to sell or borrow against its VOI notes receivable has historically been a criticalan important factor in Bluegreen meeting its liquidity requirements. The vacation ownership business generally involves making sales of a vacation product where a buyer is only required to pay a minimum of 10% to 20% of the purchase price up front, while at the same time selling and marketing expenses related to such sales are primarily cash expenses exceedingthat exceed the down payment amount. For the year ended December 31, 2016,2017, Bluegreen’s sales and marketing expenses weretotaled approximately 52% of its system-wide sales.sales of VOIs, net. Accordingly, having facilities for the sale or hypothecation of these VOI notes receivables,

receivable, along with periodic term securitization transactions, has been a critical factor for Bluegreen in meeting its short-Bluegreen’s short and long-term cash needs.

Bluegreen’s VOI receivables purchase facilities and term securitizations typically utilize an owner’s trust structure whereby Bluegreen sells receivables to a wholly-owned, special purpose finance entity which then sells the receivables to an owner’s trust, typically without recourse to Bluegreen or its subsidiaries, except for breaches of certain representations and warranties at the time of sale.  While in limited instances Bluegreen has entered into guarantees in connection with its vacation ownership receivables purchase facilities or term securitizations, historically, Bluegreen has typically not entered into such guarantees.  These facilities usually have detailed requirements with respect to the eligibility of receivables for purchase, and fundings under these facilities are typically subject to certain conditions precedent.  Under such purchase facilities, a variable purchase price of a portion of the principal balance of the receivables sold, subject to certain terms and conditions, is paid at closing in cash.  The balance of the purchase price is deferred until such time as the facility purchaser has received a specified return and all servicing, custodial, agent and similar fees and expenses have been paid and, if applicable, a specified overcollateralization ratio is achieved and a cash reserve account is fully funded.  Bluegreen’s VOI receivables purchase facilities typically include various conditions to purchase, covenants, triggering events and other provisions Bluegreen believes to be customary for these types of transactions.  Bluegreen has historically acted as servicer of, and in such capacity received a fee for servicing, the VOI receivables Bluegreen has sold under these purchase facilities. See “Item 7 – Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information about Bluegreen’s VOI receivablesnotes receivable purchase facilities and term securitizations.



Receivables Servicing



Receivables servicing includes collecting payments from borrowers and remitting the funds to the owners, lenders or investors in such receivables, accounting for principal and interest on such receivables, making advances when required, contacting delinquent borrowers, terminating a membership in the Bluegreen Vacation Club ownership in the event that defaults are not timely remedied and performing other administrative duties.



Bluegreen receives mortgage servicing fees for servicing its securitized notes receivable whichand these fees are included as a component of interest income. Additionally, Bluegreen earns servicing fee income from third-party developers in connection with Bluegreen’sits servicing of their loan portfolios under certain fee-based services arrangements, which is netted against the cost of Bluegreen’s fee-based services arrangements. mortgage servicing operations.



MarketBluegreen’s Core Operating and Industry DataGrowth Strategies



MarketGrow VOI sales

Bluegreen’s goal is to utilize its sales and industry data used throughout this report were obtainedmarketing platform to continue its strong history of VOI sales growth through the expansion of existing alliances, continued development of new marketing programs and additional VOI sales to its existing Vacation Club owners. Bluegreen believes there are a number of opportunities within its existing marketing alliances to drive future growth, including the expansion of its marketing efforts with Bass Pro to include programs focused on Bass Pro’s e-commerce platform. In addition, through Bluegreen’s agreement with Choice Hotels, Bluegreen plans to enhance its marketing program through further penetration of Choice Hotels’ digital and call-transfer programs. In addition to existing programs, Bluegreen plans to utilize its sales and marketing expertise to continue to identify unique marketing relationships with nationally-recognized brands that resonate with its core demographic. In addition, Bluegreen actively seeks to sell additional VOI points to its existing Vacation Club owners, which typically involve significantly lower marketing costs and have higher conversion rates compared to sales to new customers. Bluegreen is also committed to continually expanding and updating its sales offices to more effectively convert tours generated from its marketing programs into sales. In addition, Bluegreen seeks to identify high traffic resorts where it believes increased investment in sales office infrastructure will yield strong sales results.

Continue to enhance Bluegreen’s internal surveys, industry publications, unpublished industry dataVacation Club experience

Bluegreen believes its Vacation Club offers owners exceptional value. Bluegreen’s Vacation Club offers owners access to its 43 Club Resorts and estimates, discussions with industry sources24 Club Associate Resorts in premier vacation destinations, as well as access to approximately 11,000 other hotels and resorts and other currentlyvacation experiences, such as cruises, through partnerships and exchange networks. Bluegreen continuously seeks new ways to add value and flexibility to its Vacation Club membership and enhance the vacation experience of its Vacation Club owners, including the addition of new destinations, the expansion of its exchange programs and the addition of new partnerships to offer increased vacation options. Bluegreen also continuously seeks to improve its technology, including websites and applications, to enhance its Vacation Club owners’ experiences. Bluegreen believes this focus, combined with its high-quality customer service, will continue to enhance the Vacation Club experience, driving sales to new owners and additional sales to existing Vacation Club owners.

Grow high-margin, cash generating businesses

Bluegreen seeks to continue to grow its ancillary businesses, including resort management, title services and loan servicing. Bluegreen believes these businesses can grow with little additional investment in infrastructure and potentially produce high-margin revenues.

Increase sales and operating efficiencies across all customer touch-points

Bluegreen actively seeks to improve its operational execution across all aspects of its business. In Bluegreen’s sales and marketing platform, Bluegreen utilizes a variety of screening methods and data-driven analyses to attract high-quality prospects to its sales offices in an effort to increase Volume Per Guest (“VPG”), an important measure of sales efficiency. Bluegreen also continues to test new and innovative methods to generate sales prospects with a focus on increasing cost efficiency. In connection with its management services and consumer financing activities, Bluegreen will continue to leverage its size, infrastructure and expertise to increase operating efficiency and profitability. In addition, as Bluegreen expands, Bluegreen expect to gain further operational efficiencies by streamlining its support operations, such as call centers, customer service, administration and information technology.

Maintain operational flexibility while growing the business

Bluegreen believes it has built a flexible business model that allows it to capitalize on opportunities and adapt to changing market environments. Bluegreen intends to continue to pursue growth through a balanced mix of capital-light sales vs. developed VOI sales, sales to new customers vs. sales to existing Vacation Club owners and cash sales vs. financed sales. While Bluegreen may from time to time pursue opportunities that impact its short-term results, Bluegreen’s long-term goal is to achieve sustained growth while maximizing earnings and cash flow.

Pursue strategic transactions

As part of a growth strategy, Bluegreen may seek acquisitions of other VOI companies, resort assets, sales and marketing platforms, management companies and contracts, and other assets, properties and businesses, including where Bluegreen believes significant synergies and cost savings may be available. Bluegreen may choose to pursue acquisitions directly or in partnership with third-party developers or others, including pursuant to arrangements where third-party developers purchase the resort assets and Bluegreen sell the VOIs in the acquired resort on a commission basis. Bluegreen has a long history of successfully identifying, acquiring and integrating complementary businesses, and believes its flexible sales and marketing platform enables Bluegreen to complete these transactions in a variety of economic conditions.

Industry Overview

The vacation ownership, or timeshare, industry is one of the fastest growing segments of the global travel and tourism sector. By purchasing a VOI, the purchaser typically acquires either (i) a fee simple interest in a property (or collection of properties) providing annual usage rights at the owner’s home resort (where the owner’s VOI is deeded), or (ii) an annual or biennial allotment of points that can be redeemed for stays at properties included in the vacation ownership company’s resort network or for other vacation options available information.  through exchange programs. Compared to hotel rooms, vacation ownership units typically offer more spacious floor plans and residential features, such as living rooms, fully equipped kitchens and dining areas. Compared to owning a vacation home in its entirety, the key advantages of vacation ownership products typically include a lower up-front acquisition cost and annual expenses, resort-style features and services and, often, an established infrastructure to exchange usage rights for stays across multiple locations.

The sources for this data include, without limitation,vacation ownership industry was historically highly fragmented, with a large number of local and regional resort developers and operators having small resort portfolios of varying quality. Bluegreen believes that growth in the American Resort Development Association.  Industry publications generally state that the information contained thereinvacation ownership industry has been obtaineddriven by increased interest from sources believed to be reliable, but there can be no assurance as toresort developers and globally-recognized lodging and entertainment brands, increased interest from consumers seeking flexible vacation options, continued product evolution and geographic expansion. In 2016, more than 9.2 million families (approximately 6.9% of U.S. households) owned at least one VOI and VOI sales have grown 800% over the accuracylast 30 years.

While the majority of VOI owners are over the age of 45, new owners are, on average, approximately 5 years younger. VOI owners have an average annual household income of $81,000 and completeness84% of such information.  Bluegreen has not independently verified such market data.  Similarly, Bluegreen’s internal surveys, while believed by Bluegreen to be reliable, have not been verified by any independent sources.  Accordingly, such data may not prove to be accurate.VOI owners own their own home.



BBX Capital Real Estate



Overview



BBX Capital Real Estate’s primary activities consist ofinclude the monetizationacquisition, development, ownership, and management of assets in its portfolioreal estate and investments in real estate developments and unconsolidated real estate joint ventures. Legacy assets (assets retained following the BankAtlantic sale) include loans, foreclosed real estate and a portfolio of charged-off loans. BBX Capital Real Estate conducts land entitlement activities on certainalso manages the legacy assets acquired by BCC in connection with the BankAtlantic Sale. The legacy assets include portfolios of loans receivable, real estate properties, acquired through foreclosure and land development projects which include selling or leasing the improved properties to third parties.loans previously charged-off by BankAtlantic.



StrategiesStrategy



BBX Capital Real Estate’s growth strategy is focused on:





Project Portfolio

BBX Capital Real Estate’s portfolio currently includes investments in the following real estate development projects and operating properties either through joint ventures or wholly-owned developments.  A more detailed description of each investment follows this table:

Multifamily Apartment Developments

Altis at Kendall Square, LLC (“Altis at Kendall Square”)

In March 2013, the Company invested $1.3 million as one of a number of investors in a joint venture with The Altman Companies (“Altman”) to develop Altis at Kendall Square, a 321 unit multifamily apartment development comprised of twelve three-story apartment buildings, a retail parcel, and a clubhouse located in Kendall, Florida. During the year ended December 31, 2016, the joint venture sold the apartment buildings and clubhouse, and the Company recognized $3.1 million of equity earnings and received $3.7 million of distributions from the joint venture. The Company anticipates that the retail land will be sold in 2018.

The Addison on Millenia Investment, LLC (“The Addison on Millenia”)

In December 2015, the Company invested as one of a number of investors in a joint venture with ContraVest to develop The Addison on Millenia, a 292 unit multifamily apartment development comprised of nine apartment buildings located in Orlando, Florida. At the inception of the venture, the Company transferred land with an agreed upon value of $5.8 million and cash of $0.3 million to the joint venture in return for its membership interest. The Company is entitled to receive 48% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. Construction commenced in the first quarter of 2016 and was completed during 2017. The 292 apartment units were 96% leased as of December 31, 2017. 

Altis at Lakeline – Austin Investor, LLC (“Altis at Lakeline”)

In December 2014, the Company invested $5.0 million as one of a number of investors in a joint venture with Altman to develop Altis at Lakeline, a 354 unit multifamily apartment development comprised of nineteen two- and three-story apartment buildings, 38 enclosed garages, and a private resort-style 5,500 square foot clubhouse located in Cedar Park, Texas. The Company is entitled to receive 34% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. Construction commenced in the first quarter of 2015 and was completed during 2017. The 354 apartment units were 87% leased as of December 31, 2017. 

Altis at Bonterra – Hialeah, LLC (“Altis at Bonterra”)

In December 2015, the Company invested in a joint venture with Altman to develop Altis at Bonterra, a 314 unit  multifamily apartment development located in Hialeah, Florida. At the inception of the venture, the Company transferred property with an agreed upon value of $9.4 million and cash of $7.5 million to the joint venture in return for its membership interest. The Company is entitled to receive 95% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital, and any distributions thereafter are shared based on earnings, with the managing member receiving an increased percentage of the distributions. Construction commenced

in the first quarter of 2016 and was completed during 2017. The 314 apartment units were 87% leased as of December 31, 2017.

Altis at Shingle Creek Manager, LLC (“Altis at Shingle Creek”)

In April 2016, the Company invested $332,000 as one of a number of investors in a joint venture with Altman to develop Altis at Shingle Creek, a 356 unit multifamily apartment development located in Orlando, Florida. The Company is entitled to receive 2.5% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions.  Construction commenced during the fourth quarter of 2016 and is anticipated to be substantially complete in the third quarter of 2018. The leasing of apartment units began during the third quarter of 2017.

Altis at Grand Central, LLC (“Altis at Grand Central”)

In September 2017, the Company invested $1.9 million as one of a number of investors in a joint venture with Altman to develop Altis at Grand Central, a 314 unit multifamily apartment development located in Tampa, Florida. The Company is entitled to receive 11% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. Construction commenced during the fourth quarter of 2017 and is anticipated to be substantially completed during the second quarter of 2019.

Atlis at Promenade, LLC (“Altis at Promenade”)

In December 2017, the Company invested $962,000 as one of a number of investorsin a joint venture with Altman to develop Altis at Promenade, a 338 unit multifamily apartment development located in Tampa, Florida. The Company is entitled to receive 5% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions.Construction is anticipated to be substantially complete during the third quarter of 2019.

Single Family Developments

Hialeah Communities, LLC (“Bonterra – CC Homes”)

In July 2014, the Company invested in a joint venture with CC Homes to develop Bonterra – CC Homes, a residential community comprised of 394 homes located in Hialeah, Florida. At the inception of the venture, the Company transferred property at an agreed upon value of $15.6 million to the joint venture in exchange for cash of $2.2 million, membership interests with an agreed upon value of $4.9 million, and the venture’s assumption of an $8.3 million mortgage loan on the property. The Company is entitled to receive 57% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on capital, and any distributions thereafter are shared, with the managing member receiving an increased percentage of distributions. During the year ended December 31, 2017, the joint venture closed on the sale of 192 homes, and the Company recognized $12.1 million of equity earnings and received $14.4 million of cash distributions from the joint venture.  During the year ended December 31, 2016, the joint venture closed on the sale of 201 homes, and the Company recognized $9.5 million of equity earnings and received $11.5 million of cash distributions from the joint venture.  As of December 31, 2017, the joint venture had closed on the sale of 393 homes, with the final home closing in January 2018.

New Urban/BBX Development, LLC (“Village at Victoria Park”)

In December 2013, the Company invested $750,000 in a joint venture with New Urban Communities to develop Village at Victoria Park, a residential community comprised of 30 single-family homes located in Fort Lauderdale, Florida.  The Company is entitled to receive 50% of the joint venture distributions. The project commenced construction and sales during the third quarter of 2014. During the year ended December 31, 2017, the joint venture closed on 9 homes, and the Company recognized $940,000 of equity earnings from the joint venture. As of December 31, 2017, the joint venture had closed on the sale of 18 single-family homes and has sales contracts on eleven additional homes.  

Centra Falls, LLC (“Centra Falls”)

In August 2015, the Company invested $750,000 as one of a number of investors in a joint venture with Label & Co.  to develop Centra Falls, a residential community comprised of 89 townhomes located in Pembroke Pines, Florida.  The

Company is entitled to receive 7.143% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. During the year ended December 31, 2017, the joint venture closed on 61 townhomes, and the Company recognized $286,000 of equity earnings from the joint venture. The project commenced construction during the third quarter of 2015, and as of December 31, 2017, the joint venture had closed on 79 townhomes and had executed contracts on an additional 9 townhomes.

Centra Falls II, LLC (“Centra Falls West”)

In November 2016, the Company invested $571,000 as one of a number of investors in a joint venture with Label & Co. to develop Centra Falls West, a residential community comprised of 61 townhomes located in Pembroke Pines, Florida. The Company is entitled to receive 7.143% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. The project commenced construction during the first quarter of 2017, and as of December 31, 2017, the joint venture had sold 48 townhomes and closings are anticipated to begin in April  2018.

Chapel Grove Townhomes (“Chapel Grove”)

In October 2017, the Company invested $4.9 million as one of a number of investors in a joint venture with Label & Co. to develop Chapel Grove, a residential community comprised of 125 town homes located in Pembroke Pines, Florida. The Company is entitled to receive 46.75% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with the managing member receiving an increasing percentage of distributions. The project commenced construction during the fourth quarter of 2017, and townhome closings are anticipated to commence during the fourth quarter of 2018.  



Beacon Lake Master Planned Development



The Company has obtained entitlements to develop raw land in St. Johns County, Florida into 1,476 finished lots which will comprise the Beacon Lake Community. TheAs part of the development, the Company acquired this undeveloped property through foreclosureis developing the land and it is anticipated thatcommon areas and expects to sell the finished lots to third-party homebuilders that will be sold to home builders.  The centerpiece of the community is the 43-acre Beacon Lake, which offers opportunities for outdoor recreation.  The planned amenities include a Junior Olympic lap pool, Splash Park, tennis courts, fitness center and a community dog park.  Single-familyconstruct single-family homes and townhomes that are planned to range from 1,800 square feet to 4,000 square feet and priced from the high $200,000’s to the $500,000’s. ConstructionLand development began in January 2017. The Company has entered into a purchase agreementagreements with a home builderhomebuilders for approximately 152302 finished lots in which 240 finished lots are anticipated to close during 2018, with the first finished lotlots closing in January 2018. The remaining 62 lots are anticipated to occurclose during 2019.   Pursuant to the first quarterasset purchase agreements with the homebuilders, upon closing of 2018.the lots by the homebuilders. a portion of the Community Development Bond is required to be repaid through lot sales proceeds and a portion of the Community Development Bond is transferred to the homebuilder.



PGA StationCCB Miramar, LLC (“Miramar – CC Homes”)



In May 2015, the Company invested in a joint venture with two separate developers relating to the acquisition of real estate in Miramar, Florida for the construction of single-family homes. The Company acquired land through foreclosure located in PGA Station,contributed $875,000 for an approximate 35% interest in the city of Palm Beach Gardens, Florida in 2014.  The property held by the PGA Design Center Holdings joint venture, described belowand one of the developers contributed to the joint venture a contract to purchase the real estate. The City of Miramar approved the site plan in June 2017, and the Company contributed an additional $350,000 to the joint venture. The joint venture is adjacentseeking to PGA Station.obtain entitlements for the project and anticipates closing on the acquisition of the real estate in March 2019. However, the entitlements are subject to government approval, and these approvals may not be obtained.

Retail Developments

BBX/S Millenia Blvd Investments, LLC (“Gardens on Millenia Retail JV”)

In October 2015, the Company invested in a joint venture with Stiles Development to develop a retail center on the Gardens of Millenia site in Orlando, Florida.  At the inception of the venture, the Company transferred property with an agreed upon value of $7.0 million to the joint venture in return for $0.7 million in cash and its membership interest. The Company is entitled to receive 90% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital, and any distributions thereafter are shared based on earnings, with the managing member receiving an increased percentage of the distributions. During the year ended December 31, 2016,2017, the joint venture closed on a portion of the retail center, and the Company obtained governmental approvals to construct a 125 room limited-service suite hotel, a medical office buildingrecognized $3.5 million of equity earnings and three 60,000 square foot office buildings on vacant tractsreceived

$3.4 million of land in PGA Station.distributions from the joint venture.  The Company isanticipates that the master developer of PGA station and intends to sell the developed land to third party developers.  The Company executed a sales contract for the hotel site with closing anticipated during the second quarter of 2017, subject to satisfactory completion of the prospective buyer’s due diligence and other closing conditions.remaining retail space will be sold in March 2018.



Gardens on Millenia – Land



Gardens on Millenia consisted of 37 acres of land acquired through foreclosure located near the Mall at Millenia in a commercial center of Orlando, Florida.  During 2015, the Company obtained governmental approvals for a 300,000 square foot retail shopping center designed for multiple big-box and in-line tenants as well as two outparcel retail pads and nine rental apartment buildings totaling approximately 292 units. The Company contributed the portion of the land entitled for rental apartments to the Addison on Millenia Investment, LLC joint venture and contributed the portion of the land entitled for the retail center to the BBX/S Millenia Blvd Investments, LLC joint venture as initial capital contributions to the joint ventures. The AddisonCompany developed the two outparcel retail pads and has sold one of the pads to a retailer and executed a long-term land lease on Millenia Investment, LLC joint venture and the BBX/S Millenia Blvd Investments, LLC joint venture are described below in “Investments in unconsolidated real estate joint ventures”. other pad. 



Investments in unconsolidated real estate joint ventures

The Company had investments in the following real estate joint ventures as of December 31, 2016 and 2015 (in thousands):

The above investments in unconsolidated real estate joint ventures are described below.

Altis at Kendall Square, LLC (“Kendall Commons”)

In March 2013, the Company invested $1.3 million as one of a number of investors in a 321 unit multi-family development – Altis at Kendall Square – developed by Altman Development (“Altman”). The multifamily rental community is comprised of 12 three-story apartment buildings, one mixed-use building and one clubhouse. During the year ended December 31, 2016, the joint venture sold the development and the Company recognized $3.1 million of equity earnings and received $3.7 million of distributions from the joint venture.

Altis at Lakeline – Austin Investor, LLC

In December 2014, the Company invested $5.0 million as one of a number of investors in a planned multi-family development – Altis at Lakeline – being developed by Altman.  Located on an approximate 23 acre parcel in the northwest area of Austin, Texas, Altis at Lakeline is comprised of 19, two and three story, residential apartment buildings with 354 apartment units, 38 enclosed garages, and a private resort style 5,500 square foot clubhouse.  After all investors receive a specified return on capital  and the return of their contributed capital, any distributions thereafter are shared based on earnings with the managing member receiving an increasing percentage of distributions.  Construction commenced in the first quarter of 2015 and 312 units were available for lease with an occupancy rate of 49% as of December 31, 2016. 

New Urban/BBX Development, LLC (“Village at Victoria Park”)

Village at Victoria Park consists of a residential development on approximately 2 acres of previously vacant land previously owned by the Company that is located near downtown Fort Lauderdale, Florida.In December 2013, The Company invested in a joint venture with New Urban Communities to develop the project as 30 single-family homes.  The project is a 50% - 50% joint venture with New Urban Communities serving as the developer and manager of the joint venture.  The project commenced construction and sales during the third quarter of 2014. As of December 31, 2016, the joint venture closed on 10 single-family homes and has sales contracts on four additional homes.  

Bayview (Sunrise and Bayview Partners, LLC)

In June 2014, the Company invested in a joint venture with an affiliate of Procacci Development Corporation (“PDC”) with the Company and PDC each contributing $1.8 million to the Sunrise and Bayview Partners joint venture.  The joint venture acquired for $8.0 million approximately three acres of real estate located at Bayview Drive and Sunrise Boulevard in Fort Lauderdale, Florida.  The Company and PDC each have a 50% interest in the joint venture.  There is currently an approximate 84,000 square foot office building along with a convenience store and gas station on the property.  The office building has low occupancy with short term leases. The convenience store's lease ends in

March 2022.  The Company anticipates that the property will be redeveloped into a mixed-use project at some point in the future.

Hialeah Communities, LLC (Bonterra – CC Homes)

In July 2014, the Company invested in a joint venture with CC Bonterra to develop approximately 394 homes in a portion of Bonterra community in Hialeah, Florida.  The Company transferred approximately 50 acres of land acquired through foreclosure at an agreed upon value of approximately $15.6 million subject to an $8.3 million mortgage which was assumed by the joint venture.  In exchange, the Company received $2.2 million of cash and a joint venture interest with an agreed upon assigned initial capital contribution value of $4.9 million.  The Company receives 57% of the joint venture distributions until the Company receives its aggregate capital contributions plus a specified return on capital. Any distributions thereafter are shared with the managing member receiving an increased percentage of distributions.  During the year ended December 31, 2016, the joint venture closed on 212 single-family homes and the Company received $11.5 million of cash distributions and recognized $9.5 million of equity earnings from the joint venture.  As of December 31, 2016, the joint venture has executed sales contracts on an additional 109 single-family homes. Mixed Use Developments



PGA Design Center Holdings, LLC (“PGA Pod B”)



In December 2013, the Company purchased for $6.1 million a commercial property located in PGA Station in Palm Beach Gardens, Florida, with three existing buildings consisting of 145,000 square feet of mainly furniture retail space. The property, which is located in a larger mixed use property now known as PGA Station was substantially vacant at the date of acquisition.  Subsequent to the acquisition of the property, the Company entered into athe PGA Design Center Holdings, LLC joint venture with Stiles Development, which acquired a 60% interest in the joint venture for $2.9 million in cash. The Company contributed the property (excluding certain residential development entitlements having an estimated value of $1.2 million) to the joint venture in exchange for $2.9 million in cash and the remaining 40% interest in the joint venture.  The Company transferred the retained residential development entitlements to adjacent parcels owned by it in PGA Station (see abovebelow for a discussion of PGA PODS A&C, the other parcels owned by the Company in PGA Station). During the year ended December 31, 2016, governmental approvals were obtained to change the use of a portion of the property from retail to office. The joint venture sold one of the buildings in February 2018 and intends to sell or lease the remaining two buildings. 



CCB Miramar, LLCPGA Pods A&C

The Company acquired land through foreclosure located in PGA Station, in the city of Palm Beach Gardens, Florida in 2014. During the year ended December 31, 2016, the Company obtained governmental approvals to construct a 122 room limited-service suite hotel, a medical office building, and three 60,000 square foot office buildings on vacant tracts of land in PGA Station. The Company is the master developer of PGA station and intends to sell the developed land to third party developers. During the year ended December 31, 2017, the Company closed on the sale of the land on which the hotel and medical office buildings will be constructed by third party developers.

Bayview (Sunrise and Bayview Partners, LLC)



In May 2015,June 2014, the Company invested in a joint venture with two separate unaffiliated developers relatingan affiliate of Procacci Development Corporation (“PDC”) with the Company and PDC each contributing $1.8 million to the acquisitionSunrise and Bayview Partners joint venture.  The joint venture acquired for $8.0 million approximately three acres of real estate located in Miramar, Florida for the construction of single-family homes.Fort Lauderdale, Florida. The Company contributed $875,000 for an approximate 35%and PDC each have a 50% interest in the joint ventureventure. There is currently an approximate 84,000 square foot office building along with a convenience store and one ofgas station on the developers contributed toproperty. The office building has low occupancy with short term leases. The convenience store's lease ends in March 2022. The Company anticipates that the joint ventureproperty will be redeveloped into a contract to purchasemixed-use project in the real estate. The purchase of the real estate is subject to certain closing conditions, including receipt of all necessary entitlements and completion of due diligence by the joint venture.future.



Centra Falls, LLCOperating Properties

Villa San Michele



In August 2015,January 2014, the Company invested as one ofacquired an 82-unit, 272 bed student housing project located in Tallahassee, Florida, through a number of investors in a joint venture with an unaffiliated developer for the development and sale of 89 townhomes in Pembroke Pines, Florida.  The Company contributed $750,000 and is entitled to receive 7.143% of the joint venture distributions until it receives the return of its aggregate capital contributions plus a specified return on its investment. Any distributions thereafter are sharedcontractual settlement with the managing member receiving an increased percentage of distributions.borrower.  Built in 2008, Villa San Michele is located in southwest Tallahassee near Tallahassee Community College. The project commenced constructionincludes a mix of 3 bedroom and sales during4 bedroom 2-story townhomes, as well as a 10.6 acre parcel of vacant land. Villa San Michele met the third quarter of 2015.  Ascriteria to be classified as held-for-sale as of December 31, 2016, the joint venture closed on 21 townhomes2017 and has executed contracts on an additional 54 townhomes.

The Addison on Millenia Investment, LLC

In December 2015, the Company invested as one of a number of investorswas ultimately sold in a joint venture to develop 11.8 acres in the Gardens on Millenia site located in Orlando, Florida into nine retail apartment buildings containing approximately 292 units.  The joint venture currently intends to hold the property and operate the apartment project as an income producing business.   The Company transferred property with an agreed upon value of $5.8 million and $0.3 million of cashJanuary 2018 for its initial joint venture contribution. The Company is entitled to receive 48% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return in its investment. Any distributions thereafter are shared based on earnings with the managing member receiving an increasing percentage of distributions. Construction commenced in the first quarter of 2016 and leasing of apartment units is anticipated to begin during the first quarter of 2017. $9.5 million.



BBX/S Millenia Blvd Investments, LLCRoboVault



In October 2015,April 2013, the Company acquired through foreclosure, RoboVault, a 155,000 square foot high-tech, robotic self-storage facility, featuring climate controlled, and a developer investedhigh security storage. Located in a joint venture to develop a retail center on the Gardens of Millenia site in Orlando, Florida.  The joint venture intends to construct the center, lease the premises and sell the property. The Company transferred property with an agreed upon value of $7.0 million to the joint venture and received $0.7 million in cash and a 90% interest in the joint venture.  The Company is entitled to receive 90% of joint venture distributions until it receivesFort Lauderdale, Florida, RoboVault offers its aggregate capital contributions plus a specified return on its investment.  Any distributions thereafter are shared with the managing member receiving an increased percentage of the distributions. The joint venture completed the construction of the retail center, two anchor tenants are openclients museum quality storage for business, forensic property, and personal prized possessions, including art, wine collections, cars, gems, antiques, important documents and files, and other collectibles. Built in 2009, the joint venture anticipates selling the retail center in 2017.facility is wind resistant up to 200 mph (a category 5 hurricane), stores items 30 feet above sea level, uses a biometric robotic transfer system, and offers 24 hour - 7 day access.



Altis at Bonterra – Hialeah, LLC

In December 2015, the Company invested in a joint venture with Altman to develop approximately 314 apartment homes in a portion of Bonterra communities in Hialeah, Florida. The Company transferred approximately 14 acres of land at an agreed upon value of approximately $9.4 million and cash of $7.5 million to the joint venture.  The Company is entitled to receive 95% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its investment. Any distributions thereafter are shared based on earnings with the managing member receiving an increased percentage of the distributions.   Construction commenced during the first quarter of 2016 and leasing of apartment units is anticipated to begin during the first quarter of 2017. 

Altis at Shingle Creek Manager, LLC

During April 2016, the Company invested in a joint venture with Altman and an investor to develop approximately 356 apartment homes on 24 acres of land located in Kissimmee, Florida. The Company invested approximately $332,000 for a 2.5% interest in the joint venture.  The Company is entitled to receive 2.5% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its investment. Any distributions thereafter are shared based on earnings with the managing member receiving an increasing percentage of the distributions.   Construction commenced during the fourth quarter of 2016 and leasing of apartment units is anticipated to begin during the third quarter of 2017. 

Centra Falls II, LLC

During 2016, the Company invested as one of a number of investors in a joint venture with Label & Co. to develop 61 town homes on land located in the City of Pembroke Pines, Broward County, Florida. The Company contributed $571,000 to the joint venture and is entitled to receive 7.143% of the joint venture distributions until it receives its aggregate capital contribution plus a specified return on its investment.  Any distributions thereafter are shared with the managing member receiving an increased percentage of the distributions.  Construction is expected to commence in the first quarter of 2017 and closings are anticipated to commence during the fourth quarter of 2017.

Legacy AssetsPART II

Legacy assets in the Company’s Consolidated Statement

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 6

Selected Financial Data

Item 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Item 8

Financial Statements and Supplementary Data

F-1 to F-71

Item 9

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A

Controls and Procedures

Item 9B

Other Information

PART III

Item 10

Directors, Executive Officers and Corporate Governance

Item 11

Executive Compensation

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13

Certain Relationships and Related Transactions, and Director Independence

Item 14

Principal Accounting Fees and Services