Remember the condo-hotel? It was all the rage back in the day. Developers could rely on sales of these units—even before the hotel was constructed—to not only impress lending institutions but recoup money up front.
Then the recession came. And condo units stopped selling. And, well, you know the rest.
But guess what? They are back! Are they here to stay?
Let's take a look at some recent condo-hotel projects that are getting off the ground.
In Philadelphia, developer Carl E. Dranoff is partnering with SBE Entertainment Group to build a 47-story, mixed-use luxury boutique hotel and condominium tower at Broad and Spruce Streets, across from the Kimmel Center, for more than $200 million.
The 422,838-square-foot SLS International (rendering right), which Dranoff said would be Pennsylvania's "tallest structure built for residential use," is being designed by New York-based architecture firm Kohn Pedersen Fox Associates, reports Philly.com.
The hotel's 149 rooms will occupy floors eight through 17. The 18th floor will have six hotel suites. The 125 residential units - one-, two- and three-bedroom condos and two penthouses - will begin on the 19th floor. There will be four levels of parking, one underground and three above-grade, for 220 spaces shared by residents and hotel guests.
New York is also set for a new condo-hotel, albeit some time away. As Curbed reports, Miami-based Peebles Corporation paid $160 million for 346 Broadway, which currently houses the New York City Criminal Court. Peebles enlisted Elad Group, owner of the Plaza hotel, as a partner, for the landmarked 13-story, 400,000-square-foot building. Peebles and Elad are investing $100 million of the $400 or so million that the project will cost.
Current plans call for 50 to 100 hotel rooms and 100 to 140 condo units with an opening date sometime in 2016.
The trend has also made its way to Hawaii. As Pacific Business News reports, Pacrep LLC, which is in the process of building The Ritz-Carlton Residences, Waikiki Beach condo-hotel project is planning to develop a $159.5-million, 39-story second condo-hotel nearby.
Pacrep said the project is expected to be completed over a two-year period with a tentative start date in April and a finish date of June 2015.
Meanwhile, the 37-story, 309-unit Ritz-Carlton Residences, Waikiki Beach is reportedly "substantially" sold, and has gained massive interest from Japanese investors.
Officials are also seeing strength in the condo-hotel model in Colorado. The Aspen Times reports that as part of a lodging tour, Aspen city officials visited the Viceroy Snowmass to see how some of the hotel's successes can be replicated in Aspen. One important statistic revealed during the trip was that 95 percent of residence owners at the hotel rent their units out. With 152 available units, 56 have sold and 53 of the owners rent.
"If it’s a hotel and it’s sold as a condominium, to me ... that’s the model you ought to be incentivizing," said assistant city manager Barry Crook.
The condo-hotel: back and in demand.