As Palm Springs undergoes its renaissance as a desert luxury destination with more than just golf, the city is also beginning to attract more developers and second home buyers. Nearby desert community La Quinta is already home to residences owned by several destination clubs—including Quintess and Ultimate Resort—as well as a number of private residence clubs. Now Palm Springs and nearby Palm Desert are seeing more development of their own, despite the sluggish real estate sales market.

This month two well known hoteliers announced resort real estate projects in the Palm Springs area that will cater to luxury buyers seeking a vacation home with five-star amenities. Both projects are positioned at the high end of the market, which in the current real estate slowdown has held up better than the mid-range and entry level sales market. That said, both projects will be offering real estate products that have become harder sells in recent months. In fact, in many areas condo hotels have become the dogs of the market, while fractional ownership sales have slowed in others. But there is a potential bright side. The Palm Springs area hasn’t seen the explosion of high-rise and condo inventory overflow that resort towns like Miami and Las Vegas have experienced, so these new projects won’t be going head-to-head with a slew of other luxury resort and condo options. Here’s a preview of the developments.

Palm Springs Hotel and Residences

Morgans Hotel Group, the boutique hotel developer of the ultra-chic Mondrian brand, among others, has announced that it is building the Palm Springs Hotel and Residences in downtown Palm Springs. The resort will include a 200-room Mondrian hotel as well as a restaurant, bar, spa, fitness center and pool, complete with cabanas and a kids club. The resort plans to sell 50 condo-hotel units, with an additional 150 condominium units planned.

As part of the downtown Palm Springs revitalization, the property will sit on ten acres across the street from the recently updated Convention Center. Expected to open in 2010, the Mondrian will be one of the first large full-service hotels to be built in Palm Springs in the past 20 years.

The Fairmont Avanterra

Fairmont’s first Palm Springs-area property will sit adjacent to the Classic Club golf course, site of the PGA Bob Hope Chrysler Classic in Palm Desert. Phase one is slated to include 300 rooms and 125 Fairmont residences, a Fairmont Gold lounge and concierge rooms and a 45,000-square foot Willow Stream Spa.

The next phase will bring a Fairmont Heritage Place, the company’s fractional private residence club to Palm Springs (there are Fairmont Heritage Place projects currently under construction in San Francisco and Dubai), as well as additional wholly-owned Fairmont residences. The project is expected to be completed in 2011, and is being touted by Fairmont as an environmentally progressive community.