Orlando's Premier Resort
Condominiums...
Orlando Set To Dominate
Condo Hotel Market
By Bob Ostrander
Greater Orlando has approximately 120,000 hotel
guest rooms. While that’s far more than most U.S.
cities, many hotel and condo hotel developers are
confident there’s still room for expansion in this
popular tourist and convention destination.
Orlando leading the condo hotel boom'
As one of the world’s top vacation destinations,
Orlando offers beautiful weather, unparalleled theme
parks, incredible shopping, championship golf and
close proximity to top-notch beaches.
In the hospitality field, the city has long been
noted for its many hotels and timeshares. But now,
it has also taken a leadership position in the condo
hotel market with more properties under development
than any other city in the country.
Condo hotels offer hassle-free ownership;
Because condo hotels are a new type of vacation home
ownership, it’s not surprising that they’re popular
in Orlando, the vacation capital of the world.
These fabulously-furnished condominium suites in
luxury hotels and resorts offer visitors fantastic
amenities like full-service spas, state-of-the-art
health clubs, resort-style pools, extravagant
clubhouses, upscale restaurants and 24-hour
concierge services.
Owners can use their condo hotel vacation homes when
they want and place them in the hotel’s rental
program the rest of the time. They’ll receive a
share of the revenue their unit generates, typically
about 50%. Because the onsite hotel management
company takes care of finding guests and maintaining
and operating the property, condo hotels offer
hassle-free ownership.
Expansion of the hospitality sector to include condo
hotels'
Greater Orlando has approximately 120,000 hotel
guest rooms. While that’s far more than most U.S.
cities, many hotel and condo hotel developers are
confident there’s still room for expansion in this
popular tourist and convention destination. They
cite the following facts about the Orlando market as
the reasons for their optimism:
• Approximately 50 million visitors come to Orlando
each year, and that number is continually growing.
• Orlando is the vacation capital of the world. With
new attractions continually being built, it shows no
signs of relinquishing that prestigious title.
• In addition to theme parks, Orlando attracts
visitors with its 200+ championship golf courses,
800+ tennis courts, numerous world-class shopping
venues, and a high concentration of lakes ideal for
fishing and water sports.
• Hotel occupancy rates in Orlando are historically
73%, although many properties report occupancy rates
of over 83%. These rates are among the highest
occupancy rates in the country.
• Orlando’s average daily rate for rooms is 4% above
the national average.
• The Orange County Convention Center in Orlando is
the third largest in the country, enabling it to
attract major trade shows and conventions and keep
hotel rooms filled year-round. Over one billion
delegates attend conventions at the Orange County
Convention Center each year. In 2005 and 2006
Orlando was able to absorb many of the conventions
and trade shows planned for the Louisiana Superdome.
• Attendance at Orlando’s theme parks grows
annually, and their reach extends far beyond U.S.
borders. The theme parks spend millions of dollars
each year on worldwide marketing and promotions.
Attendance at Disney’s Magic Kingdom, the area’s
largest theme park, is estimated at over 15 million
annually.
• Orlando is strategically positioned in the center
of the state, making it an easy visit from Florida
cities north, south, east and west.
• Orlando International Airport is seeing annual
increases in traffic of approximately 20%, making it
one of the top 20 busiest airports in the U.S. and
within the top 30 for the world. It is ranked #1 by
JD Powers in passenger satisfaction.
• Florida is the single most preferred state by
Americans for a recreational property purchase
according to the ARDA (American Resort Development
Association).
• Foreign buyers favor Orlando over other Florida
and U.S. cities. They account for 23% of Orlando
home sales, according to the National Association of
Realtors. International buyers are more likely to
purchase higher-priced homes, and these purchases
are likely to be used as a vacation home (38%) or as
investment property.
Many condo hotels already under construction;
There are 15 to 20 condo hotels currently selling
units or under construction in Orlando. Many more
are in the planning stage, including some that will
be large-scale, mixed-use projects incorporating
spas, golf courses, town centers, stores and
restaurants. A few of the biggest projects are over
1,000 units and will include water parks as on-site
attractions.
Some of the condo hotels will be new construction
while others will be conversions of existing hotels
and resorts. Most will be of three- to five-star
caliber and in close proximity to Orlando’s theme
parks, attractions and golf courses.
Some of the condo hotels will have well-known
franchise operators like Sonesta, Starwood and
Hilton while others will be run by independent
hospitality firms.
Orlando Condo Hotels Offer Value
Orlando condo hotel units tend to be larger than
those found in cities like Miami Beach and Fort
Lauderdale. Designed to accommodate the many
families and extended families that come to the area
theme parks, two-, three- and even four-bedroom
units in Orlando properties are not uncommon. In
South Florida cities, you primarily find studios and
one-bedroom units.
Orlando condo hotel units also tend to cost
significantly less per square foot than South
Florida condo hotels. In Orlando, you can expect to
pay $400 - $700 per square foot. You can find a
luxury unit with resort amenities starting at
$350,000.
In South Florida, most condo hotels start at
$500,000 and up, significantly more if they’re
oceanfront. Miami condo hotel units range from
$1,000 to $2,400 per square foot, and Ft. Lauderdale
condo hotels range from $1,000 to $1,300 per square
foot.
Although real estate appreciation has been occurring
at an astounding rate of 20% to 30% per year
throughout Orlando, many buyers still consider
Orlando to be a good value when compared to other
Florida locales and when all that the city has to
offer is taken into consideration.
A Branded Urban Lifestyle For Second-Home Owners
BY DAVID DEVOSS
FOR INVESTOR'S BUSINESS DAILY
Posted 3/23/2006
"Moonlight as a VIP. Guests demanding top-rate
business facilities fully wired for maximum
productivity share the elevator with travelers on
the prowl during a hedonistic holiday of beauty
treatments, top restaurants and a lively night
life.“
Sound like your cup of tea? Well, for just a bit
over $500 a square foot you, too, can buy a piece of
the new W Hotel & Residences.
The focal point of Victory Park, a $3 billion
minicity sprawling across 75 acres near the heart of
downtown Dallas, the 250-room W Hotel will set a new
standard of opulence when it opens in June. But the
hottest properties in town are atop the hotel: 66
condos priced from $400,000 to $7 million.
"We're selling an urban lifestyle to people in their
20s with trust funds and married professionals in
their 40s," explained Clay Likover, a senior
associate with developer Hillwood Capital. "We have
a psychographic, not a demographic."
The W Hotel & Residences is part of a property
development trend that has spread fast over the past
two years: the condotel. Throughout the U.S., hotels
in prime urban areas are being redeveloped to
include homes that can be bought outright like a
normal condominium or acquired on a fractional
basis.
In White Sulphur Springs, W.Va., the 200-year-old
Greenbriar resort is getting into the ownership game
by building 500 homes on lots ranging from $400,000
to $2 million. So is the Fontainebleau Hilton Resort
in Miami Beach, which manages two condo towers.
Most new condotels are not resorts, however. More
often they are redeveloped historic buildings in big
cities with strong condo markets, high hotel
occupancy rates and shopping and cultural amenities
that entice baby boomers interested in a second
home.
Because they are selling a lifestyle, most are run
by luxury brands like Mandarin Oriental, Starwood's
St. Regis, Marriott's Ritz-Carlton and Hilton's
Conrad division.
"Eighty percent of hotel condos are bought as second
homes and 20% for appreciation and tax benefits,"
said Robert Falor, CEO of privately held Falor Cos.
in Chicago. "This is a way to own a second home
without the hassles.“
Falor owns three existing hotel condos in Chicago.
It also has seven projects in South Florida. It
plans to expand to Boston, Los Angeles, San
Francisco and Washington, D.C.
Fractional owners buy access to a specific hotel
room for a set number of days. Unlike a time share,
a fractionally owned room is real property that can
be depreciated, resold or passed on to heirs. Owners
not in residence often elect to recoup part of their
taxes and mortgage payments by putting their rooms
in a rental pool run by the hotel.
Hotel condos often are owned by suburban baby
boomers who took some savings out of the stock
market after the dotcom collapse and used favorable
interest rates to buy a second home in the city. But
the amenities and cachet of a luxury hotel do not
come cheap.
Besides hefty management fees, owners pay a service
charge when they occupy the room. Part of that money
is returned when a room in the rental pool is
occupied by a paying hotel guest, but not all.
Hotels normally take 50% of any rental income a
privately owned condo generates plus a 25% booking
fee.
For developers, a condotel is all upside. Hotel
units sold before construction generate revenue.
That can help a developer get construction debt and
equity. Lenders usually finance condo hotels with
only 20% equity due to pre-construction sales.
Otherwise they want 40%.
Also, condos serviced by a four- or five-star hotel
sell at a premium above similar luxury condos
nearby.
"On average, a hotel condo can be sold for 38% more
than a regular condo," said David Parham, a senior
analyst with Delta Associates, a real estate
research and consulting firm in Alexandria, Va.
The homes and hotel aren't always physically
connected.
Late next year, the historic Chronicle Building on
San Francisco's Market Street will reopen as The
Ritz-Carlton Club & Residences. One of the first
homes of the San Francisco Chronicle, the
115-year-old structure will contain 52 privately
owned condos and 49 units offered for sale on a
fractional basis.
Redeveloped at a cost of $90 million, the building
is almost a mile from the Ritz-Carlton Hotel. Yet
the 101 designer-ready homes being developed by
Hunter Group of Alameda, Calif., collectively are
expected to sell for $250 million.
No one knows for sure how the housing cool-down will
affect condotels. Industry officials argue the
scarcity of prime urban locations will keep
condotels in demand.
The market is luring hotel management firms from
Asia and Europe. Shangri-La Hotels & Resorts of Hong
Kong is developing condotels in Miami, Chicago and
Vancouver, British Columbia.
The Vancouver project includes a 120-room hotel plus
homes costing $1.5 million to $2.6 million.
"All but eight of our 288 condo units already are
sold, and construction has yet to reach the ground
floor," said Stephen Darling, Shangri-La regional
vice president.
Buying a five-star condo hotel is not for everyone,
Darling cautions. Although separately owned units
can be resold as easily as any condo, the market for
fractional shares is not as robust. Said Darling:
"We're selling a lifestyle to affluent baby boomers,
people who want service without the servants.“
LA, Orlando Lead Top 10 Markets To Watch
Written by Mark Heschmeyer
Posted May 15, 2006
Los Angeles is the top retail investment market to
watch in Sperry Van Ness' 2006 Top 10 Markets To
Watch retail report. This is due to expected growth
of 100,000 new residents and 80,000 new jobs in
2006.
In addition, Los Angeles is expected to post the
strongest retail sales growth of the firm's markets
at 7.9%. Furthermore, vacancy rates have improved to
a near-index low of 3.6% with many submarkets
recording sub-3% vacancy. While some firms place
heavy emphasis on cap rates and prices when
reviewing market activity, Sperry Van Ness' report
for the retail sector focuses on future trends and
the markets that show the greatest potential for
income growth based on these economic indicators,
rather than historic market data as a truer
indication of future performance.
"Investors must analyze forward-looking economic
factors when deciding where to acquire property
because our research tells us that the best
indicators for a property's financial performance
are factors such as area employment growth, personal
income and vacancy," said David Frosh, president of
Sperry Van Ness. "This information is more credible
than merely the past analysis of cap rates and
further proves that we need to be advisors first
when directing our clients' investment interests."
Orlando comes in at number two highlighted by the
fact that developers are scheduled to complete only
1.4 million square feet of space this year, less
than one-half the average of the past six years. The
region will have its lowest vacancy in seven years
at 5.3%. Orlando will welcome 52,000 new residents
and
44,500 new jobs this year.
In the number three spot is the Puget Sound region
with 23,000 new households and 48,000 new jobs in
2006. Fundamentals will continue to improve with
vacancy dropping to 4.5% and rent growth reaching
3.6% this year.
As the second Florida market in the top 10, West
Palm Beach/Fort Lauderdale finished in the number
four spot with 30,000 new residents and 54,000 new
jobs expected in 2006. Vacancy will continue to
improve with inventory increasing only 1.2% in 2006,
the lowest level in four years.
Rounding out the top five is San Diego, which
continues to record declining unemployment and a 6%
increase in visitor spending. Additionally, San
Diego boasts the lowest vacancy rate and highest
rental increase among markets examined at below 3%
and 5%, respectively.
Spots six through 10 are Phoenix, San
Francisco/Oakland, Austin, Denver and San Jose. Each
of these markets is expected to see strong
population and employment growth in 2006, leading to
increased retail sales.
In compiling this report, Sperry Van Ness analyzed
more than 100 primary, secondary and tertiary
markets examining economic factors that impact
future retail investment real estate. The market
rankings in this report were focused on dynamics
including retail sales and inventory, vacancy
factors and rental trends. Capitalization rates and
price per square foot for property transactions
valued at more than $1 million were also factored
in, but to a much lesser degree.
ORLANDO INFORMATION
History
When the second Seminole war ended in 1842, American
settlers began following soldiers into Central
Florida. Originally named Jernigan after Aaron
Jernigan who came from Georgia and settled here in
1843, the town grew slowly around an old Army post
-- Fort Gatlin -- that had been abandoned in 1849.
The town's name was permanently changed to Orlando
in 1857. While different versions of the origin of
the name are told, the official account is credited
to Orlando Reeves, a U.S. soldier who was killed in
1835 by an Indian's arrow while on sentinel duty at
what is now Lake Eola Park in downtown Orlando. By a
vote of 22 men from the 85 residents, the
two-square-mile (5.18-square-kilometer) city was
officially incorporated on July 21, 1875. According
to the book Flashback - The Story of Central
Florida's Past, the undeveloped expanse of land east
of the Orlando International Airport still resembles
what the first Orlando settlers saw 150 years ago.
Accommodations
More Than 114,000 Rooms
Accommodations range from luxury resorts and themed
hotels to economy hotels/motels and campsites.
Vacation ownership units, condominiums and houses
are also available.
Attractions
Breathtaking & Memory Making
Orlando is home to more than 95 attractions that
keep visitors coming back for more. With the
excitement of the theme parks, unbelievable museums,
sensational shows and thrilling rides and
attractions, it would take approximately 62.5
eight-hour days to visit all of the entertaining
offerings in Orlando.
Shopping
With nearly 52 million square feet (4.6 million
square meters) of retail space, Orlando is one of
the fastest growing retail markets in the United
States. The destination offers an astonishing array
of shopping options that include everything from the
latest in electronics and fashion to fine jewelry
and antiques. Outlet centers, flea markets and
wholesalers offer great bargains, while themed
shopping villages mix retail shops with dining and
entertainment for a unique experience. Nine regional
malls offer the convenience of having brand name
department and specialty stores under one roof.
Rejuvenate
Relax with a wide range of treatments in the area’s
diverse spa collection including Wyndham Palace
Resort & Spa in the Walt Disney World Resort, Euro
Day Spa & Salon, Grand Floridian Spa & Health Club,
The Papillon Spa at Westgate Lakes, Forte Salon and
Spa at the RDV Sportsplex, The Mandara Spa at
Portofino Bay Hotel, The Spa at the Orlando World
Center Marriott, Canyon Ranch SpaClub at Gaylord
Palms Resort & Convention Center and The
Ritz-Carlton Spa.
Dining
More than 4,500 restaurants serve up continental and
ethnic cuisine in unique settings. There are more
than 52 upscale restaurants within a 10-mile
(16-kilometer) radius or Orlando’s Orange County
Convention Center.
Arts & Entertainment
Beethoven to Shakespeare.
The Orlando Opera, Orlando Ballet, Orlando-UCF
Shakespeare Festival, Bach Festival Society, The
Orlando Philharmonic Orchestra, SunTrust Broadway in
Orlando series and several professional and
community theatre companies provide entertainment
for visitors of all ages.
Arts & Culture
Orlando's numerous year-round art exhibits and
cultural diversity add an extra dimension to make
Orlando the perfect vacation or meeting destination.
From the world's most comprehensive collection of
works by Louis Comfort Tiffany at The Charles Hosmer
Morse Museum of American Art and 19th- and
20th-century American art at the Orlando Museum of
Art to Eatonville, the nation's oldest incorporated
African-American municipality, insightful excursions
await Orlando's visitors. Children of all ages can
also embark on an
exciting expedition at the Orlando Science Center or
relive the early days of Orlando’s citrus farming at
the Orange County Regional History Center.
Special Events
More Than 180 Special Events Annually
From rodeo performances and celebrity concerts to
ethnic festivals and art shows, Orlando has
year-round events to please everyone and add more
vacation variety. Visit Orlando’s official Web site,
orlandoinfo.com, for a comprehensive calendar of
events.
Recreation
Water, Greens, Courts and Teams
Lakes - More than 300 lakes, springs and rivers
provide swimming, boating, water skiing
and fishing in the Florida sun.
Golf - Tee off on one of more than 150 golf courses
in the Greater Orlando area.
Tennis - Orlando serves up more than 800 tennis
courts.
Professional Sports - In addition to the National
Basketball Association’s world-renowned team, the
Orlando Magic, Orlando offers professional baseball
spring training (Atlanta Braves and Houston Astros);
Orlando Predators arena football; and the Orlando
Seals Hockey Club.
Climate
Warm, Sunny Days & Mild Nights
October - May Average Daily Temperatures
Days - Low 70s F (22 C) to mid 80s F (27 C)
Nights - Low 60s F (16 C) to high 60s F (20 C)
June - September Average Daily Temperatures
Days - Upper 80s F (27 C) to mid 90s F (32 C)
Nights - Upper 60s F (20 C) to mid 70s F (25 C)
Visitation
From Near and Far
Approximately 48 million visitors come to Orlando
each year. Of those visitors, approximately 45.2
million are domestic visitors. In 2004 more than
half of Orlando’s international visitors were from
Western Europe (51.6%) followed by Canada (23%),
South America (12.8%) and Asia (4.1%).
Meeting Space
Board Meetings to Citywide Conventions
Orlando is a world-class meeting destination with a
variety of facilities that accommodate small
meetings as well as large citywide conventions and
trade shows.
Orlando's Orange County Convention Center is ranked
second in the United States in terms of exhibition
space with more than 2.1 million square feet
(189,000 square meters). The Center also offers
479,190 square feet (43,127 square meters) of
meeting rooms.
Orlando Expo Centre features 74,691 square feet
(6,722 square meters) of exhibit space and 150,222
square feet (13,520 square meters) of meeting rooms
in downtown Orlando.
Also, more than 2.9 million square feet (261,000
square meters) of space is available in the area's
hotels and cultural venues.
Transportation
Planes, Trains & Automobiles
Orlando International Airport - The airport is the
16th busiest in the United States and 28th busiest
in the world with approximately 700 commercial
operations per day. More than 32 scheduled airlines,
11 charters and nine cargos provide nonstop service
to 72 U.S. destinations and 13 international cities
as well as direct
service to more than 100 cities worldwide. It is
easily accessible and located within 15 miles (24
kilometers) of major attractions, meeting facilities
and downtown Orlando. Shuttle vans, buses, taxis,
limousines and rental cars are readily available.
The airport has won numerous awards for its
architectural design and aesthetics. For two
consecutive years, Orlando International Airport was
named by the International Air Transport Association
survey as the number one airport in North America
and number one in the world for overall passenger
satisfaction for airports serving more than 30
million passengers annually. For the second time,
the facility finished highest in overall passenger
satisfaction in the large-airport category in J.D.
Power and Associates’ 2001 Report. More information
can be found at www.orlandoairports.net.
Roadways - Major highway networks provide easy
access for visitors to reach their destinations and
for traveling in and around the Greater Orlando
area. Major highways include Interstate 4, the
Florida Turnpike, Highway 528 (Bee Line Expressway),
Highway 408 (East-West Expressway) and Highway 417
(Central Florida Greeneway).
Train Service - Amtrak serves Orlando with two daily
trains originating from New York and Miami or Tampa
with stops in downtown Orlando, Winter Park, Sanford
and Kissimmee, as well as with a triweekly train
originating from Los Angeles. Amtrak also offers the
Auto Train, which transports passengers and their
vehicles and features the comfort of bi-level
Superliner sleepers, a diner and a lounge. The Auto
Train runs daily between Lorton, Va., and Sanford,
leaving each town at 4 p.m. and arriving at the
destination at 8:30 a.m. the next day.
About town – In addition to taxi and limousine
service to anywhere in the Greater Orlando area, the
city's Lynx bus system provides economical public
transportation around Orlando. Bus stops are marked
with a "paw" print of a Lynx cat. The downtown
Orlando Lymmo bus system provides free transit
reaching from the T.D. Waterhouse Centre to City
Hall. The I-Ride Trolleys serve the popular
International Drive Resort Area year-round, seven
days a week, from 8 a.m. – 10:30 p.m. with scheduled
stops every 20 minutes. The 78 route stops are
designated with numbered “I-Ride” location markers.
Returning to the horse-and-buggy days, carriage
rides are also available through local vendors in
downtown Orlando.
Regional Offerings
Best known for its world-famous theme parks, Central
Florida offers a wealth of vacation options all
within an hour’s drive from Orlando. Sun-drenched
beaches with refreshing water; scenic nature
preserves filled with rare species of wildlife;
high-energy spectator and participatory sports;
unique cultural, educational and historic
attractions; out-of-this-world technology; retail,
antique and boutique shopping; nightly entertainment
options; and a wide range of dining selections
create the world’s most diverse vacation
destination.
Time Zone
Orlando is in the Eastern time zone.
Population
More than 1.8 million people reside in Greater
Orlando, which consists of Orange, Osceola, Seminole
and Lake counties.
Visitor Information
Official Visitor Center
8723 International Drive, Suite 101
Orlando, FL 32819
Operating Hours: 8 a.m. - 7 p.m. daily (closed Dec.
25)
On the southeast corner of International Drive and
Austrian Row. Free Orlando Magicard® discount card
available.
United States & Canada: Call toll-free at
800-551-0181
Other areas: 407-363-5872
Web site: www.orlandoinfo.com
