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National group starts Web site for condo hotels
(Orlando Sentinel, The (FL) (KRT) Via Thomson Dialog NewsEdge) May 02--Responding to the dizzying string of new condominium hotel projects, a newly formed nonprofit organization launched a Web site Monday aimed at giving buyers detailed information about the projects and their markets.
The National Association of Condo Hotel Owners, formed in February, says it will offer a rating system for evaluating condo hotel projects. The site evaluates market conditions and provides association members with an earnings calculator that considers fees, property taxes, insurance coverage and a hotel's rental program.
Developers are increasingly using the ownership method to assemble financing for new hotels. They work much like condominium apartment projects, where buyers make deposits on not-yet-built units and developers use the contracts to secure construction financing.
"Sales are structured as transactions of a piece of real estate from one individual to another," said Dante Alexander, the association's chief executive. "But 85 percent of the people who buy these units are interested in their rental potential."
The Scottsdale, Ariz., organization's Web site seeks to fill an information vacuum. Since condo hotels are sold as real-estate investments, developers are prohibited from providing cash-flow projections.
"We can't provide exact numbers, but we can say whether a unit will cover expenses or not," Alexander said.
Alexander said a $50 annual membership gives prospective investors access to the database, which he said is expanding. Orlando, the nation's third-largest condo hotel market, will be added to the database this summer, Alexander said.
The association's Web site is nacho.us.
"We look at everything on the unit level," Alexander said. "We evaluate the ongoing operations of the hotel and ask if it is commercially viable. And we look at its long-term potential based on what is being built around it."
Christopher Boyd can be reached at cboyd@orlandosentinel.com or 407-420-5723.
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