News for the Hospitality Executive
|By Suzanne Marta, The Dallas Morning News
Knight Ridder/Tribune Business News
Dec. 11, 2003 - A year after opening the swanky Hotel ZaZa, developer and owner Charlie Givens wants to extend the concept for longer-term customers.
Mr. Givens plans to add a 36-unit condominium complex to the boutique hotel in Dallas' trendy Uptown district.
The Metropolitan Club condos will officially go on sale Saturday.
Hotel ZaZa The Metropolitan Club condominiums (right) will be adjacent to Hotel ZaZa.
Earlier this month, Mr. Givens displayed an artist's rendering of the condo complex in the hotel lobby and, he says, "accidentally" sold nine units. At the time, Mr. Givens wasn't even sure what the condos would look like inside.
"People were asking us questions about colors and carpet and we hadn't even decided yet," he said.
Mr. Givens and his business partner, Jeff Records, now have their plans in place, and construction is scheduled to begin Monday.
The condos, which will connect to the hotel at the second floor, will have a separate entrance and will be available in eight floor plans ranging in size from 1,200 square feet to 2,175 square feet. Prices start at about $280,000 and top out at about $535,000. Mr. Givens said he thinks the pricing is aggressive enough that he will be able to sell all the units before Christmas.
Mr. Givens' launch of the Metropolitan Club comes after a dismal month in the Dallas area for condos and townhouses. Sales declined 24 percent in November from the same month last year, according to the North Texas Real Estate Information Systems Inc.
The Metropolitan Club's State-Thomas neighborhood has been relatively strong compared to other parts of Dallas, but demand for higher-priced properties has become sluggish. The market has been particularly difficult for units priced above $500,000, said Michael Puls, a residential real estate analyst with Foley & Puls.
"The economy has been hard," Mr. Puls said. "The pent-up demand from higher end customers has already been quenched."
Adding condominiums to luxury and upscale hotel projects has become a popular way of gaining more favorable financing terms in recent years, said Greg Crown, a hospitality consultant with PKF Consulting.
"There's certain synergy between the assets," Mr. Crown said.
Sales of condos can underwrite or pay down the mortgage of a hotel product, and their residents can bring more sales to a hotel through paid services such as housekeeping or room service.
Mr. Givens hopes to have the project finished and occupied by the end of next year.
The condos will have 10- and 12-foot ceilings, hardwood floors, marble bathrooms and large balconies. Like the hotel, the condos will have a contemporary French design. Buyers must pay a $10,000 deposit on Saturday to secure their spot.
Hotel ZaZa isn't the only Dallas-area hotel to consider condos. Hillwood Capital hopes to build the 258-room W Hotel and Residences with 80 high-end condos next to the American Airlines Center. Construction is slated to begin early next year and the 31-story complex would open in late 2005. On average, a 1,500 square-foot luxury condo would be priced at about $450,000.
Industry insiders say Crescent Real Estate Equities has been working on a project for a Ritz-Carlton Hotel in Uptown that would include condos.
The Mansion on Turtle Creek opened its adjacent condo project – the Mansion Residences on Turtle Creek – in 1994.
Like other hotel condo projects, residents of the Metropolitan Club will be able access the hotel's housekeeping staff and room service.
"Residents can get access to a chef who can cater a party," Mr. Crown said.
The five-story building also includes seven "grand" suites for overnight or extended stay guests who want more space. The suites, which will be priced at $1,500 for overnight guests, will be set up as one- and two-bedroom apartments with an average of 1,650 square feet.
The hotel, with 146 rooms and 13 themed suites, has outperformed the market and will finish the year with 70 percent occupancy, Mr. Givens said.
"It's exceeded our expectations," he said.
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