Originally, condo hotels were conversion projects from 1950's-built Miami Beach hotels in the early 1980's. Priced at under $100,000 then, people bought them and used them as their weekend pool/beach hangout. Most of the sales were to locals. Then the tax laws changed in 1986, preventing buyers from using condo hotels as a tax shelter any longer. They fell out of favor until the late 1990's.
About seven years ago, the owner of an apartment building called the Mutiny in Coconut Grove, FL (a suburb of Miami), gutted and converted his property and sold off its units as condo hotel rooms primarily to his people back home in Brazil. He was so successful that he increased prices 10 times before selling out. Other developers watched and learned and before long, they followed his successful example. First there was the Bentley Hotel on South Miami Beach, and since then the market has grown dramatically. From a dozen condo hotels in 2002 to over 25-30 just in the South Florida market today and probably over 100 nationwide.
Now we are even seeing other countries follow our success and building condo hotels in the Caribbean, Canada, and even Dubai in the Middle East. Europe and South America also have their version of of condo hotels, which they call "condotels" and "aparthotels."
The first condo hotels were built in Miami Beach in the early 1980's. They included the Shelborne Hotel, the Casablanca Hotel and the Alexander Hotel, all on the sand in Miami Beach.
The new condo hotel, including the ones that are conversions from existing hotels, are typically bigger, have kitchens, more amenities, and usually have big named franchises. They also have much, higher price tags. An oceanfront studio unit in South Florida can easily run you $550,000-$600,000 plus in today's market.
ABSOLUTELY! We are only in the second or third inning of a nine-inning game. The market is exploding. Demographics in the U.S. suggest lots of future growth. The 80-year-old population today has about 70 percent of the nation's wealth, so Baby Boomers are likely to inherit that wealth at a time when they are starting to retire and travel. That bodes well for condo hotels. We're seeing an incredible boom in second homes in the past couple of years.
They are already there, not just in Europe, but also in the Caribbean and the Middle East. We even have a few on our website already listed under Condo Hotels Featured Properties. Scroll down on the right-hand side to "Spain," "Bahamas" and "Dubai." Also, we are doing our best to increase awareness of condo hotels in Europe. We've recently established an office in Hamburg, Germany and launched the German version of our website. Check out www.condohotelcenter.de.
The above questions were submitted via e-mail by a visitor to www.CondoHotelCenter.com. The answers were prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units.