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Hotel-Condos /
05/01/2006
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| The world of hotel-condos kicks into high gear. |
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“I could live here.” We have all uttered those words after spending time in a
luxurious hotel, being pampered by room service, enjoying the views from a
private balcony and falling into deep slumber on impossibly plush down feather
beds.
Right: A residence at the Four Seasons Miami, where
owners have access to all the hotel’s amenities, plus membership to the on-site
Sports Club/LA. Below: The 115 Residences at the St. Regis in Bal Harbour
command two of the hotel’s three towers. (Click image to enlarge) Photography by right: Robert Miller; below: Courtesy of St. Regis
Resort and Residences; opposite,top: Ken Yanoviak; bottom: Kikor
Hotel developers and management companies are banking on that
sentiment. From Florida to Colorado, existing hotels are being gutted and new
developments are breaking ground to make room for what has become a hot
commodity in high-end real estate: the hotel-condo. Whether it is a favorite
hotel you return to every year or one you aspire to visit, having a room to call
your own, forever, is an enticing proposition for buyers who do not want the
hassles or commitment of a full-time residence.
Purchasing a hotel-condo
unit guarantees buyers a permanent vacation spot—and may provide the opportunity
to reap some return on the investment. As with condos, buyers own a specific
property, pay property taxes and maintenance fees, yet the condo is rented out
like a hotel room and accessorized with the hotel’s standard amenities, whether
they be Frette linens, L’Occitane toiletries or stationery embossed with the
hotel’s logo. While the hotel-condo is not the right purchase for the
vacation-home owner who likes to be surrounded by personalized decor, it does
appeal to those who do not plan to spend more than 14 days a year at the
property. Additionally, there is the undeniable cachet of saying you live at a
luxury hotel.
Left: Philadelphia’s skyline, as seen from the 28th
floor of a sleek Ritz-Carlton model residence. Below: Scheduled for completion
in 2008, the Residences at the Ritz-Carlton Philadelphia will offer one- to
three-bedroom units. (Click image to enlarge) Photography by left: Ken Yanoviak; bottom: Kikor
Bill French, a 46-year-old commercial real estate investor from
Indianapolis, who purchased a two-bedroom hotel-condo unit at the Teton Mountain
Lodge in Jackson Hole, loves the freedom of having someone else do all the work.
“I don’t have to worry about who’s cutting or not cutting the grass,” he says.
“I have delegated the management responsibilities to the hotel, and all I have
to do is collect or write a check.” While French looks at his property as an
investment, potential buyers will not get any guarantees from the hotel they are
buying in to. “We have to be careful not to call or sell this as an investment
or we could run into legal challenges,” says Darryl Murphy, senior vice
president of residential development for Starwood Hotels. “While we cannot do
that math or provide projections, any informed buyer can look at Deer Valley
occupancies for all of their hotels and get an idea of what the unit will
generate in revenue.”
Before buying at the Teton Mountain Lodge, French checked out other ski resorts,
such as Aspen and Vail, but chose Jackson Hole because of its summer appeal. “We
went to Jackson Hole and spent time at a dude ranch and took trips to
Yellowstone,” he says. “Jackson is a popular summertime location, but it also
had the benefit of a ski season.” He discovered that the hotel occupancy rates
were high June through September as well as throughout prime winter months.
“When you look at your opportunity to generate income, there are seven or eight
months when you have a lot of people who want to be there. You won’t find that
in Florida.”
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