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1 Hotel & Residences Reduces Number of Investment Opportunities

March 5, 2008 by  
Filed under ALL CONDOS

1 Hotel and Residences LogoOnly a small fraction of 1 Hotel & Residences have sold, and the project has been delayed again.  However, even though the Seattle market hasn’t expressed acceptance of the hotel/condo concept as hoped, the developer still remains positive the project will be built with some consideration that 100% of the retail space has already been filled.  The major problem doesn’t appear to be lack of interest in owning a hotel room, but the nationwide credit crunch condo-hotel projects are seeing from lenders.  Therefore, plans are being redesigned to be more appealing to lenders.

If you have been considering 1 Hotel & Residence as an investment, we’re not sure all this hype is reason enough to look away from it. But, here are a few pros or cons to help differentiate between owning a hotel/condo versus owning a condo as a 2nd home.

  1. Revenue – This is one of the biggest reasons someone considers such a project.  The majority of hotel/condo projects are more established in areas like Florida and Las Vegas and anyone considering the purchase should research tourism trends.
  2. Pre-furnished – Most all successful businesses have some consistency in service and appearance.  As a business, hotel/condo projects will rarely allow you to change anything about the room including fixtures, paint color or even blinds.
  3. Convenient Space – A common trait among hotel/condo projects is that they generally offer a superior location than a traditional condo and are generally larger than nearby hotels.
  4. Check-In – Unlike owning a condo as a 2nd home, hotel/condo projects require a notice in advance that you’ll be staying in your room (in some cases up to 60 days in advance).
  5. It’s a Business – But you generally don’t have the responsibility other than the equivalent of paying an HOA-type fee.  In addition to having management and staffing to service the guests and property, hotels are generally experienced in marketing.
  6. You Just Don’t Know – …what the return will be.  The U.S. Securities and Exchange Commission prohibits hotels and real estate firms from making any predictions.  Therefore you’ll need to know what types of property has the highest probability in appreciating.
  7. Consistency – Tourism is generally seasonal. Despite a large increase in overall tourism to Seattle, there’s not nearly as many potential visitors in the Winter as there is in the Summer.  Also, keep in mind that rates can and will change.

If you have any questions regarding this type of investment, but sure to contact an experienced expert before making making any decisions.

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