(PRWEB) November 11, 2010
Palm Beach, FL (Vocus) November 11, 2010 -- South Florida’s condo hotel or condotel market has been the hardest hit as owners, hotel operators and developers continue to battle it out in court. “Unfortunately, the original buyers didn’t fully comprehend the rental program agreement or anticipate the market downturn and now find themselves facing foreclosure or writing checks every month to cover the shortfall,” according to Kevin Dickenson with http://www.stealthatcondo.com.
Owners at The Palm Beach Marriott Singer Island Beach Resort and Spa filed suit against the hotel operator, Urgo Hotels, claiming high fees and lack of control over how association funds are spent. “A recent sale at the Resort closed for $105,000 or $141 per square foot and the original buyer paid $435,000, representing a 76% decline,” said Dickenson. Urgo Hotels purchased the tower, formerly known as The Resort at Singer Island, from WCI Communities in October 2009 and paid $131 per square foot for 14 condo hotels as part of a $7.1M bulk condo purchase.
The owners at One Bal Harbour Resort & Spa owners filed suit against the new hotelier, alleging maintenance issues with the building according to the South Florida Business Journal. The buyer purchased the tower out of bankruptcy from WCI Communities in August 2009 paying $14.7M for 61,513 square feet of residential and commercial space. A one-bedroom that sold for $1.225M in March 2008 closed for $417,000 or $363 per square foot, representing a 66% decline.
The owners at the Hilton Fort Lauderdale Beach Resort in Fort Lauderdale claim the operator modified the hotel management agreement and have also responded with a lawsuit. A condo hotel recently closed for $150,000 or $281 per square foot that originally sold for $480,500 or $902 per square foot in December 2006, representing a 69% decline.
Starwood’s W Hotel in Miami Beach opened in July 2009 and only 42 out of 408 units closed by the end of 2009 at an average sale price of $1.8M per unit or $1,806 per square foot. In 2010, 12 condo hotel units closed according to public records. The South Florida Business Journal reports that buyers filed a lawsuit in an attempt to get their deposits returned.
“Banks are unloading the white elephants at steep discounts and today’s buyer will be well positioned when the market turns and hotel occupancy rates return to normal levels,” Dickenson said. “Opportunities still exist for bulk condo buyers interested in condo hotels or converting the product to pure condo. I discovered several condo hotels in South Florida that failed to close a single unit and the buildings have been sitting empty for years.”
“Unit owners and hotel operators are essentially business partners, and when the dust settles, hopefully they will come to terms on a fair and equitable rental program agreement,” Dickenson concluded.
Kevin Dickenson is a Palm Beach real estate agent with Prudential Florida Realty and represents bulk condo buyers and hoteliers looking for distressed condos and commercial properties in South Florida. For additional information, Kevin can be contacted at 561-262-8243, or visit his website StealThatCondo.com.