We came across this condo hotel article in the Wall Street Journal a little while back. As with most mainstream coverage of condo hotels, a good portion of the article is a primer for people new to the concept (see our guide for a more thorough intro to condo hotels). Otherwise, here are some of their main points:

• International condo hotels have emerged as an alternative to domestic projects with the recent downturn in the U.S. real estate market.
• Developers have enticed condo buyers with new projects by global brands that offer the luxury amenities that guests have come to expect. Projects with prime locations are in development at sunny vacation destinations, near beaches with convenient access to international airports.
• The value proposition of owning a condo hotel, reliable infrastructure for renting and maintaining your property when you aren’t using it, are even more important to owners of international hotel units – distance makes self-managing a vacation property even more challenging.
• This globalization of the condo hotel market is not limited to U.S. buyers of foreign properties. Buyers from Asia and Europe are buying in US condo hotel hot-spots like Las Vegas.

Our two cents – the writer makes the anecdotal claim that the international market has picked up with the slowdown of the domestic market. However this is more likely coincidence rather than causation. Our own anecdotal-evidence driven opinion: the condo hotel market is young enough that there is a strong bias towards new properties. This is primarily because of two reasons: first, new properties have a higher perceived investment potential and second, many new developments are improvements on earlier projects (the hotel chains and developers continue to hone the model with their experience on earlier projects).

Furthermore, the capital requirements and the margins for the developers must be very attractive on these new international properties (certainly versus high cost basis sites like Las Vegas) and consequently that’s where a lot of the exciting new properties are coming available.

Helium Report’s free Mini Guide to Condo Hotels has more »