Capital Durability Model™
Analytical framework for structural evaluation of coastal real estate markets.
Structural Clarity, Not Prediction
The Capital Durability Model™ is designed to evaluate structural conditions that influence long-term capital behavior. The objective is not to predict short-term price movements or market timing. The objective is structural clarity.
Coastal luxury real estate is typically presented through recent sales data, lifestyle features, and short-term momentum indicators. This framework takes a fundamentally different approach by focusing on the structural variables that determine how communities behave across market cycles.
The Five Pillars
The Capital Durability Model™ evaluates coastal enclaves across five structural dimensions. Scoring weights are proprietary and reserved for advisory engagements.
Structural Supply Constraint
Geographic limitations, build-out status, redevelopment potential, and ownership concentration patterns. Supply rigidity influences pricing behavior, liquidity compression, and downside sensitivity during stress. Scarcity alone does not create durability—the structure of that scarcity does.
Ownership & Control Structure
Generational holding trends, second-home prevalence, entity ownership, and turnover consistency. Communities with concentrated ownership respond differently under pressure than those with higher transactional churn. Ownership stability is a primary determinant of capital durability.
Governance & Regulatory Discipline
HOA structure, reserve discipline, regulatory exposure, architectural control, and policy consistency. Well-governed communities preserve structural integrity and capital stability more effectively than loosely regulated environments. Governance excellence is a leading indicator of long-term durability.
Environmental & Insurance Exposure
Wildfire exposure, coastal oversight, geological sensitivity, erosion considerations, and insurance market stability. Insurance availability and pricing volatility are structural variables that influence long-duration holding strategy and carrying cost predictability.
Liquidity Duration Behavior
How communities respond during expansion, rate shock, credit tightening, and economic uncertainty. Some markets compress and recover quickly; others extend and stabilize slowly. Understanding these patterns informs long-term capital planning and exit strategy expectations.
Additional Analytical Dimensions
Carrying Cost Stability
Property tax structure, insurance premiums, HOA dues, and maintenance reserves. Stability of carrying costs often determines durability more than appreciation alone.
Scenario Evaluation
Each community is evaluated across 5–10 year scenarios: base, expansion, and downside conditions. This is not forecasting—it is disciplined scenario evaluation to clarify structural sensitivity.
Proprietary Scoring Methodology
The Capital Durability Model™ produces a composite structural score for each enclave. The scoring methodology applies weighted evaluation across the five pillars, with additional adjustments for carrying cost stability and scenario sensitivity.
The specific weighting applied to each pillar is proprietary and reserved for advisory engagements. This approach ensures that the analytical framework remains a competitive advantage while still providing transparent methodology to clients.
Clients who engage in advisory consultation receive full transparency into how their enclave of interest is scored, including detailed breakdowns of pillar-level evaluation and sensitivity analysis.