RANCHO MIRAGE, CA— The condominium hotel phenomenon that seems to be taking the hotel industry by storm has attained a whole new level of interest. That was evident here at Jeffer, Mangels, Butler & Marmaro LLP’s Annual Hotel & Resort Conference in the Desert that focused on condo hotels, as nearly 500 executives attended the event, while others had to be turned away because of the lack of space. For those that did fit in the door at the Rancho Las Palmas Marriott Resort & Spa, they were treated to a comprehensive examination of all facets of the rising condo-hotel trend, from operating issues and sales tactics to design trends and legal implications. Plus, there was no shortage of potential deals in the works, as developers of all sizes were sizing up their own condo-hotel opportunities with the many lenders, operators, architects and lawyers that were also in attendance. “Condo-hotels can even out the vagaries of the hotel market,” asserted the event’s keynote speaker, Charles Reiss, who was formerly with the Trump organization when it developed two condo-hotels and is now the president and COO of the Sunshine Group. “But condo-hotels can only do that if the condo-hotel bubble become permanent. In order for that to happen, owners must be treated fairly and receive returns that are commensurate with the risk that they take.” Reiss opened up the event with his keynote address following a few introductory words by the chairman of JMBM’s Global Hospitality Group, Jim Butler, who later noted that the condo-hotel topic will surely be revisited again in other JMBM-sponsored conferences. Reiss’ address initially touched upon his history with one of the country’s first condo-hotel developers— Donald Trump. While with Trump, he was a part of the creation of condo-hotels in New York and Chicago. Now that he’s with Sunshine, he revealed that the company is working on new condo-hotel projects in such cities as New York, Las Vegas and Montreal. Reiss went on to note that he learned a lot about condo-hotels while working for Trump. “We learned how to get people to participate in the rental program,” he said. “We learned not only how to run a good hotel, but how to keep up the sale product because it’s both a hotel and a real estate investment. We learned the value of branding and governance. And we also learned the lesson that the buyer wants luxury and convenience and they’ll pay for it if they know they’re getting something back.” He added that the most crucial component of a condo-hotel is the hotel itself because it needs to be a great hotel on its own in order for the entire model to work in the long run. Additionally, he said that people are interested in owning condo-hotel units mostly because they are simply good real estate investments and second homes. Following the keynote address, a panel of condo-hotel experts discussed why they are interested in condo-hotels and what type of condo-hotel regimes they have each established. Speaking during this session, which was entitled “Practical Advice From the Experts: Condo-Hotel Regimes,” were Guy Maisnik, partner, real estate department, JMBM; David Lee, director of development, Golden Door; Bill Sipple, corporate vice president, development, full-service hotels, Carlson Hotels Worldwide; Steve Sorensen, vp/senior project manager, East Coast Towers Division, WCI Communities, Inc.; Frank Jansen, svp, special projects, Chicago Title Company; and John Alderson, president, JAVentures, Inc. “A lot of people come to us with a renovation project that they want to turn into a condo-hotel, but if a property does not work as a hotel and doesn’t have the right hotel features, then it won’t work as a condo-hotel,” Sipple explained. “It has to be a seamless experience for the guest, who can’t think that it’s a condo-hotel. Also, we as a brand need to have a minimum hotel inventory level in case owners are not participating in the rental program.” From the developer’s point of view, Alderson
