How Are Those Condo-Hotels Doing? The Raffaello at 201 E. Delaware in the Gold Coast
This condo-hotel unit at The Raffaello at 201 E. Delaware in the Gold Coast has been on and off the market since October 2011.
The listing says it is bank owned.
The condo-hotels were all the rage at the height of the housing boom.
You own the hotel room which has a private, locked closet where you can put your belongings when you’re not using the room.
When you’re not there, the hotel can rent the room out for you.
This unit is a double/double with 2 double beds.
The listing says you can use it as on your own or as an investment.
This unit is listed about 50% under the 2007 price.
What would you want to pay for this to make investment sense?
Mary Summerville at Jameson Sotheby’s has the listing. See the listing here.
There aren’t any interior pictures- so see the listing for #1011, also a double/double unit. It’s been on the market over 600 days and is listed at $190,770. See the pictures here.
Unit #411: hotel room, bathroom
- Sold in April 2007 for $244,000
- Lis pendens foreclosure filed in May 2011
- Originally listed in October 2011 (I couldn’t find an original list price)
- Currently listed as a “bank owned” for $125,000
- Assessments of $480 a month (includes heat, a/c, doorman, cable)
- Taxes of $2300
- Central Air
- Flat panel tv
- Fridge
- Microwave
- Living room: 30×14
- Kitchen: 4×4
The concept of a hotel/condo isn’t necessarily a bad one – however, this one fails miserably for a few reasons:
1. Amenities – hotel condos are meant for people with some disposable income – those people WOULD pay for a hotel condo IF the hotel had great amenities (ie the Ritz Carlton, 4 Seasons, Trump). The Raffaello is a boutique hotel that doesn’t have a lot of amenities/extras.
2. The “condo” itself – hotel condos would be appealing if they are “suite-like” and somewhat more spacious than a regular hotel – the ones at the Raffaello are NOT.
For these two reasons, it makes NO sense whatsoever for anyone to buy a unit here. They would be better off finding different places to stay every time they came to chicago – or just renting a studio in the area for 1200-1500/month!!
Agree with CLIO.
Why on Earth own a hotel room at all, even one in a superb hotel, when you have to saddle yourself with the costs whether you’re getting the use of it or not?
It’s really only slightly better than a timeshare, the biggest burn in the world.
Methinks that situations like this were something that only made sense at the top of an insane, overinflated, artificial boom when everybody was paying anything for anything.
All i can think of are bed bugs and bodily secretions….why would anybody want to own a dirt trap like that?
Major Fail.
“Agree with CLIO.”
Clio and Laura are agreeing? Wow.
Does anyone know how much the hotel kicks back to you if the room is occupied by a hotel guest?
I could see an elderly man living here. He can make friends and socialize with the building staff and they could look out for him. If he paid cash, it would be less than $700 a month to live here. I knew a couple people whose grandparents permanently lived in a hotel. They seemed to like the lifestyle.
I’m interested in this as a cash flow property. If you get short term renters in here (biz travelers who come to Chicago for 2 month spells), you can prob charge more than is typical b/c the place is furnished and in a good location for biz. Also, the company may be expensing it so that usually leads to less price sensitivity. 125k is cheap, especially if you can offset the high assessments with either higher rents / niche marketing / kickbacks if it gets used as a hotel room.
Yike. Someone paid almost a quarter of a million $$ for one of these in 2007!
I can see this concept making sense for a retired suburban couple like my parents. They like having the amenities of the city (and 2 of their children live downtown) but prefer to live in the ‘burbs. While not poor, they are not of means to actually purchase a second residence that won’t get that much use. If they could get enough income from hotel guests to cover their holding costs, they could come down to visit or enjoy the city and not have worry about trekking back to the ‘burbs at the end of the day. If you could actually market this to business travelers and get $1000/wk out of it, you’d only have to rent it out for 15-20 weeks a year to cover your costs. I realize there are a lot of ifs involved and I agree that if I were going to do this, I’d prefer a building with more amenities, or at least a pool, but this is the only scenario where this makes sense to me.
“I can see this concept making sense for a retired suburban couple like my parents. They like having the amenities of the city (and 2 of their children live downtown) but prefer to live in the ‘burbs”
UHHH – do you guys even realize that this is a HOTEL ROOM (not a studio, not a suite) – it has NO kitchen, NO sitting area or anything – it is a small room with two double beds. Your parents would be MUCH better off renting a hotel room whenever they come down here – or better yet, hire a limo to bring them downtown and then pick them up and drive them back to their house (about 150/night).
I had the unfortunate experience of staying in one of these rooms. My wife bought a night on Groupon or something, so we stayed here. The “suite” felt like a dungeon. There was a big living room that was very dark and uncomfortable with a little t.v. The bedroom was very small, like sleeping in the closet of a dungeon. This was supposed to be an upgraded room because when we arrived they were over booked and gave us this suite. On checkout day, we came back from a late breakfast only to see the maid (who looked like she was on crack) lingering in the hallway who asked us if we were checking out soon because she wanted to leave. The location may be nice, but the whole place is depressing and creepy.
Based on the comments above I can see why one wouldn’t want to buy this as a primary residence or even as a weekender. But what about as an all cash investment? Based on their website, it looks like the rates are $225 a night. Also, seems like a great location. Safe, clean, near shopping and night life – perfect for tourists. I’m also presuming maid service is included in the nightly rates.
Just not sure how much of their nightly rates get kicked over to the owner.
Also, trip advisor reviews of this hotel seem to be mainly positive:
http://www.google.com/url?q=http://www.tripadvisor.com/Hotel_Review-g35805-d87635-Reviews-Raffaello_Hotel-Chicago_Illinois.html&sa=U&ei=tDGpT8CKIYmi9QTW2ZSiAw&ved=0CBAQFjAA&usg=AFQjCNEiBkGdddwjgsyhGWsZaIkZQFWqyw
Never underestimate the value of a “Roof-top desk”.
Pass and epic failure. Clio summed it up above. As for the suburban parents idea I see the logic however think that the hotel room costs are so cheap downtown these days that it does not make sense. You can frequently get a room for $99 or less per night on the weekends. If there is a convention in town that will change but overall it should not be that difficult to contain costs.
Also there are some deals on the high end. I can get a room at the Peninsulia at a special discounted rate typically around $250 per night. If you committed to the FS, Pen, Trump, or others to stay 25 nights per year I am confident that they would give you some consideration. On the lower end I suspect that befriending a front desk manager at the Hyatt or other mid level business hotel will at minimum get you some great upgrades.
I have a nice relationship with the Front Desk Manager at one Four Seasons properties. We met her when we stayed there last fall. Now whenever I make a reservation at any of the other FS properties I email her directly with my confirmation number. She then calls that property and the magic happens. We had a 2 bedroom “180 degree suite” at the FS Las Vegas this past weekend and paid substantially less than online rate. It was really nice!
Having this type of hotel condo makes no sense to me. Rather have people look at clubs that are not time shares but home rental options such as Portico and Inspirato for that type of deal.
“this is a HOTEL ROOM (not a studio, not a suite) – it has NO kitchen, NO sitting area or anything”
“Fridge
Microwave
Living room: 30×14
Kitchen: 4×4 ”
So, clio my friend, are you saying the listing lies? Or merely exaggerates badly? I truly have no idea.
As my 12-year old would say, this place is a “major fail.” How someone could have paid a quarter of a million for it boggles the mind.
“So, clio my friend, are you saying the listing lies? Or merely exaggerates badly? I truly have no idea.”
See the other listing – there’s a small kitchen area, with a small fridge and a microwave, and probably a mini-bar. Maybe that works great for some people.
“Fridge
Microwave
Living room: 30×14
Kitchen: 4×4 ”
anon (tfo), I think some of that is limitations of real estate listing fill-in-the-blanks… a studio is basically listed as a living room and nothing else, so that 30×14 IS the entire space… and given the way real estate agents measure, that 30′ probably includes windows to door, even if there is a narrow hallway for 8′ of it. And I wouldn’t exactly consider 4′ of counter (and willing to bet the 4″ in other direction based on patch of tile floor in front) with a mini fridge and microwave a “kitchen” in any sense of the word when you can’t cook anything beyond a meal of Hot Pockets. This is a standard hotel room, and not a studio in the sense of a traditional apartment building.
Wait, where did that 30 I quoted come from? Actual listing says 15×18. And the floorplan provided (http://media.cdn-redfin.com/photo/68/bigphoto/266/07605266_8_1.jpg) in the listing clearly shows this as just a plain old hotel room.
According to the listing, the pictures, and the provided floorplan, it has a fridge, a microwave, AND a place to sit. Yes its a hotel room, but its a *free* hotel room (in my above scenario).
I can see this appealing to the travel-the-country-in-an-RV types. The people who prefer to spend $200k on a bus so they can sleep in “their-bed” rather than the boatload of super nice hotels you could stay in for that kind of money. Yes it’s a hotel, but at least you could leave a toothbrush and the basics there so you wouldn’t have to worry about packing for the weekend. If you like the comfort of staying in the same place, this would provide that.
” How someone could have paid a quarter of a million for it boggles the mind.”
This, while hugely, hugely nicer:
http://www.redfin.com/IL/Chicago/401-N-Wabash-Ave-60611/unit-2230/home/12983226
is asking $500k, has $2300+ in monthly assessment and a ~$1200 tax bill.
Does anybody know the economics on these w/ regard to hotel revenue being kicked back? And what limitations there are in terms of nights (in a row & total per year) one can stay? Seems you’d be looking at about $1200/mo for mortage, assessments, tax… so if the room was rented out 1/2 the time and you got $100/night, it’d break even. But are those numbers even close to reality?
“Wait, where did that 30 I quoted come from?”
See the post above. Copied directly.
Condo hotels sound like a good idea in theory, but I have never heard of any that were anything but a total disaster (for the buyers). Mainly because the unit prices were way too high and the rental income assumptions way too optimistic. Does anyone have any info to the contrary?
[SXN]
I’ll concur with trip advisor, I have stayed here a few times and always enjoyed the rooms/staff/experience. Maybe I just had a better room than Laker but I have always had positive experiences here.
No as for buying a room? …no, fuck that noise.