Buyers grab 133 Cape hotel condos in first day

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Buyers grab 133 Cape hotel condos in first day

By Dick Hogan
Originally posted on January 17, 2006

Special to news-press.com . An artist rendering of MarinaVillage Resort in Cape Coral.

Buyers reserved $112 million of hotel condominiums in one day at Cape Coral's first such project.

At a drawing Saturday afternoon, 133 people plunked down $25,000 checks to Grosse Pointe Development Co. to buy units in The Resort at MarinaVillage in Tarpon Point Marina. The reservations accounted for three-quarters of the 19-story tower.

One expert said condo hotels are one of the hottest trends in the state and the ones like MarinaVillage without nearby competition may be the best buys.

In a condo hotel, owners typically have the choice of living in their units or letting a management company - SunStream Hotels & Resorts in this case - rent them out and provide a stream of income.

"The one in Cape Coral will probably do well because there's nothing like it" in the city, said Deerfield Beach-based Jack McCabe, a multifamily housing market analyst with McCabe Research & Consulting. "In Fort Lauderdale Beach there's five big ones in a couple miles. To me you're reaching saturation point there."

One MarinaVillage buyer, Bruce Jorgensen, said he's optimistic that prices and demand will continue to go up there.

Jorgensen, 60, is a retired United Airlines pilot who lost most of his pension and $500,000 worth of stock when the company went into bankruptcy reorganization three years ago. He got a real-estate license and said he bought units Saturday for himself and for some of his clients.

"They're in high demand," he said. "The expensive, bigger ones went first."

The units range from $630,000 to almost $1.4 million and are from 1,200 to 2,200 square feet.

Nick Cross, director of sales and marketing for Grosse Pointe, said he expects to get reservations on the rest of the 184 units by May, at which time buyers will each have to put up a total of 10 percent down. Construction is scheduled to begin in July.

Enough buyers are signed on already to satisfy lenders, however, and, "We're not in a hurry to get them sold," Cross said,

He added Grosse Pointe took the plunge because there's a shortage of hotel rooms in Cape Coral: only 394 rooms "and there's nothing on the water."

McCabe said that when condo hotels started to become popular several years ago, they were mostly buildings right on the Atlantic Ocean or the Gulf of Mexico. Now, he said, they're popping up inland in places such as Cape Coral and downtown Fort Myers, where New York-based Homes for America has contracts on 108 of Monaco Resort & Spa's 370 units, which start at about $300,000.

"Our goal is to break ground in May" with 70 percent of the units under contract, said Will Cohill, director of sales and marketing for the builder.

Seventy of Monaco's units are designed for people who actually want to live at least part of the year and the rest would be mainly for use as rentals, he said.

Federal securities law prevents him from making specific representations about Monaco, Cohill said, but it's not uncommon to get a 15 to 25 percent return on condo hotels.

"That's pretty optimistic," McCabe said. "A word of caution: If they buy them because they think they're going to get a great rate of return, or they think their unit is going to be rented most of the time, they're going to be disappointed."

But, he said, condo hotels are proving popular among people who like the level of service associated with a hotel.

Kim Wallace, a 48-year-old businessman from Ontario, said that's the case with him. He owns a house in Cape Coral but also picked up two MarinaVillage units Saturday: one for himself and one for his parents.

He bought the unit for himself with an eye to retirement and a less-demanding lifestyle, Wallace said. "It's a little less work. The thing that's so attractive about Tarpon Point is that the amenities are all there within reach."