Mike Tauber
Feature: Downtown Digs
March 1, 2006
“You can’t sell them without views,” concurs Maynard.
The condo-hotel units in Miami Beach’s Setai all feature a Southeast
Asian—inspired decor and include Duxiana beds. Photography by The Wave Design (Click images to enlarge) ; function voidFunc() { } voidFunc();)
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Hotel-condos are much more expensive than traditional condos–you are lucky if
you can find one for less than $250,000–and buyers are looking for more than
views; they are after the luxury amenities. The majority of hotel-condos are in
four- and five-star establishments: The Ritz-Carlton, the St. Regis and the
Plaza in New York have all embraced the hotel-condo business in the last couple
of years. Owners enjoy the full range of hotel services–a concierge,
housecleaning, room service, catering, butler service and valet parking. “It’s
all about lifestyle,” says Ezzat Coutry, senior vice president of the
Ritz-Carlton, which operates a hotel-condo in Key Biscayne, Fla., and opened a
Grand Cayman property in the Caribbean last December. “Most of [our buyers]
are lifelong customers, who are accustomed to this lifestyle. They have all the
amenities of the Ritz-Carlton hotel at their fingertips–that’s the real
benefit.”
In addition to resort-style services, hotel-condo owners enjoy the prestige of
an address at the Ritz or Trump Towers. “They’re buying for cachet,” says Joel
Greene, president of the Florida brokerage firm Condo Hotel Center. “It’s not,
‘I want an investment in a hotel-condo’ or ‘I want to be in Fort
Lauderdale’–it’s ‘I want a piece of Trump.’”
When not residing at their deluxe addresses, hotel-condo owners can place their
units in the rental pool, and the hotel will rent them like any other room,
sharing in the profits. In short, hotel-condos provide hassle-free ownership:
all the flexibility with none of the responsibility. “It comes fully furnished
with everything in it. Just come with your toothbrush,” says Maynard. “But if
you forget your toothbrush, that’s OK, too–they’ll give one to you.”
Such treatment is expensive, however; some reports indicate that
hotel-condos are priced as much as 25 percent higher than traditional condos.
Greene warns his clients that the chance of making a profit off the
investment is slim. “Hotel-condos were not built to be cash-flowing
vehicles,” he says. “I do not and will not harp on the return on the
investment.”
There are other potential drawbacks as well. While you can decorate your
pied-à-terre condo as you please–making it a home away from home–most buildings have rental limits, restricting
the amount of time you can rent out your unit. A hotel-condo, on the other hand,
can generate income whenever you are out of town, but it must look like every
other room in the hotel. “You buy something that’s already furnished; there’s no
choice of furniture, place settings, or decor,” says Nicastri.; function voidFunc() { } voidFunc();)
Adjacent to the Beverly Hilton Hotel, Richard Meier’s new 9900
Wilshire will bring 252 luxury condo residences to the heart of Beverly
Hills. Rendering by Shimahara Illustration (Click image to enlarge)
Your unit also will be subject to the whims of the hotel industry. “If a
hotel-condo is going to be successful, it has to be successful as a hotel
first,” says Greene. “You’re basically becoming a hotelier of a one-unit
property. If there are any complications, like a hurricane, loss of power, the
high cost of travel, warm winters up North, all of that can affect your
hotel-condo property as well. If anything takes a dip in the market, it could
come out of your pocket.”
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