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Condo-Hotels Reshaping Luxury Market

Condo-hotels reshaping luxury market

 

 

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Special to The Miami Herald

From Brickell to Miami Beach, Hollywood to Palm Beach, condominium hotels are reshaping the luxury, waterfront landscape. In the process, they’re changing the way developers, investors, hoteliers and even residents and prospective buyers view residential product offerings.

Consider the success at ONE Bal Harbour Resort Hotel & Spa, the luxury condo-hotel. Some 40 condo-hotel units have been sold in excess of $23 million at ONE Bal Harbour. Others also are reporting millions in new-unit sales.

Brand names long established or relatively new to South Florida include the Ritz-Carlton Key Biscayne and Palm Beach, the Four Seasons, W Fort Lauderdale Beach and The Fontainebleau Towers, which built some 800 condo-hotel units.

Condo-hotels are not new to South Florida. Terremark’s Fortune House on Brickell Avenue and the Mutiny in Coconut Grove debuted in the 1990s. As condo-hotel development continued with beachfront properties — Ocean Point in Sunny Isles and Bentley Beach in South Beach, for example — the concept took on more of a resort approach. Hoteliers saw this as a way to create a new niche, and a new offering for consumers , whether buyers or vacationers. Condo-hotels rooms offer a much larger suite product for larger families and international travelers seeking an extended stay.

Condo-hotel sales have been brisk, especially as the real estate market has rebounded. Purchase prices have ranged from an average $450 per square foot to upward of $1,600 per square foot at high-profile branded properties.

The business and investment model has become a win-win for many of those involved – including the local communities that enjoy new tax revenues and consumer spending.

Developers see condo-hotels as a strong business model. With the sale of furnished hotel suites, the hotelier or developer ends up managing a hotel, with ongoing income generated from management of the units, food and beverage, events, and the resort and spa facilities. Hoteliers benefit from the creation of a popular new product or the planting of a national brand and sought-after offerings in a desirable market. This helps bolster room rates and occupancies.

Buyers purchase a vacation property that’s typically larger and more luxurious than a traditional resort hotel room. Condo-hotel units include fully equipped kitchens and living room facilities, luxury hotel services and amenities found with a high-quality brand. When not in use, owners can offset some ongoing expenses – condo fees or real estate taxes, for example – by placing the unit into hotel rental inventory.

The concept continues to evolve as developers and hoteliers seek to meet consumer and market demands. With more projects on the drawing board, condo-hotels will continue to reshape South Florida’s luxury landscape and development model.

Mark Pordes is founder / CEO of Pordes Residential Sales & Marketing in Aventur a..


Read more here: http://www.miamiherald.com/2012/05/20/2809321/condo-hotels-reshaping-luxury.html#storylink=cpy

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