Timeshare Condos

In recent months, the condotel or condo hotel ownership industry has seen a slight decline in sales. Most industry experts are not concerned and believe it is only part of a normal rise and fall in real estate trends and that the recent lag in sales parallels the overall decline in the housing market nationwide.

Yet apparently, if your name is Donald Trump and the condotels you are offering are well located and well-priced, you are bulletproofed against the effects of a sluggish real estate market.

The Trump Organization, together with Irongate, a Los Angeles investment and real estate company, have co-developed a multi-stage luxury resort project in North Baja, Mexico. Located only thirty minutes from downtown San Diego, when completed, The Trump Baja will include 525 luxury condotel suites. The three cliff side towers will overlook the Coronado Islands and the Pacific Ocean. The first 231 units are expected to be ready for occupancy by late 2008.

Interested buyers paid $5000 apiece to reserve the opportunity to select their specific unit on a first come-first serve basis. Typically, prices for Trump ownership hotel suites start around $700,000. ($799,000 USD for Trump International, Ft. Lauderdale, Florida and $815,000 USD for a suite at Trump Chicago). When The Trump Baja began their presales with fully furnished suites priced from the mid $200,000’s to a little over one million dollars, it was not surprising they were gobbled up quickly. One hundred and eighty-eight of the first tower’s units were sold by noon on the first day of presales, accounting for over $46 million. According to an AP report, presales hit $122 million within the first week.

Owners of the condotel units can hold their suite solely for their own use or participate in a rental program, with a management company handling all the details of guest services.

The Illinois Securities Department says they are acting on a complaint filed by Unite Here Local 1, the labor union that represents some Chicago hotel workers.

According to an article recently published online by Chicago Business (www.chicagobusiness.com), Tanya Solov, a spokesperson for the state regulatory agency, says, “We’ve looked at a number of these offerings…we haven’t taken any action, but we do have open inquiries.”

Solov’s comments referred specifically to the Shangri-La Hotel, owned by Teng & Associates, a major Chicago-based developer. The union alleges that the development company gave printed marketing materials that include monthly rental income projections for the condotel rooms to potential buyers of the condotel units.

Condo-hotels or condotels are a fast-growing concept in vacation ownership. They allow individuals to purchase a hotel room or suite, often bought during the pre-development phase. The unit is then available to the individual owner for their personal vacation and travel use, but can also be rented through the hotel in the same way hotel guests would rent any other room or suite.

Because the individual owner stands to receive roughly 40 to 50 percent of the room rental revenue, many purchasers of condotel units buy hoping to see a financial return for their expenditure. And while such prospects look good, the individual owner is also responsible for all on-going maintenance, taxes and other costs associated with home ownership.

The Securities and Exchange Commission views the sale of condotel units the same way as they view the sale of timeshare vacation units. Because these types of sales do not comply with the state and federal registration and disclosure requirements governing the sale of securities, no seller can legally represent them as a purchase to be made for investment potential.

Buy timeshare vacation property and condotel units as an “investment” in a lifetime of luxury vacations and a lifestyle committed to regular relaxation and rest. Invest in yourself and your own well-being. And as over-worked as many of us feel these days, that type of “investment” just might turn out to be far more valuable than any other you will ever make.

Overlooking the Dubai Marina and the Arabian Gulf in the United Arab Emirates is the seventy-four story Dubai Torch Tower. When completed in 2008, the building will house between 200 and 500 apartment units, as well as numerous indoor and outdoor swimming pools, a health club, gymnasium, restaurants, aerobics room, shops and parking garages.

Dubai Select has recently announced that they will sell timeshare condo units in the prestigious Torch Tower. The units will be available for exchange through Interval International’s worldwide interval timeshare network and will be sold in two-week increments.

The entire Marina project is an amazing undertaking. It is billed as the world’s largest man-made marina and the world’s largest master planned waterfront development. The design objective has been to create a city within a city, with the marina area offering the best and most luxurious in a city already known for opulent luxury.

The first phase of the Dubai Marina in Al Marsa was completed in 2003 at a cost of roughly $200 million US dollars. Built to be a modern interpretation of Venice, this waterside community occupies valuable real estate on the Persian Gulf. Man-made lakes on both sides of the community connect the land with the sea. A 700-berth marina, already completed, accommodates ships and yachts of all sizes.

The Torch Tower is among the tallest skyscrapers which will be in the community, although a few of the buildings rise about it with roughly 100 stories.

Condo hotels offer timesharing with more availability and flexibility

Owning a condo hotel suite provides you with guaranteed accommodations in your favorite luxury hotel. Unlike a timeshare, condo hotel suites are available to owners for as many or as few weeks as you choose to use them. During the times you are not using the hotel suite it can be made available for rental by the hotel management. It will then be booked like any traditional hotel room. Room rental is typically split about fifty/fifty between the suite’s owner and the hotel itself.

There are plenty of condo hotels available. Developments magazine reported on one recent study which revealed that “70 percent of all new hotel construction has some type of condo hotel component.” Timeshares, vacation clubs, and fractionals like the San Francisco Ritz Carlton renovation project I wrote about in June are no longer the only options in the world of vacation ownership.

Condo hotels are proving to be a great idea for hotel developers. Units can be pre-sold before construction, thereby reducing the financing the developer needs to secure. Unlike timeshare, where the owner pays for only the days and nights he or she schedules to use, condo hotel suite owners bear the full upfront cost and then seek to offset that cost by using their property as a rental.