Trump trumped by The Ritz
Posted 8/24/2006 by alison
There's a new leader in the "My luxury condo project is pricier than yours" contest. The average price-per-square-foot at The Ritz-Carlton Residences, 664 N Michigan Ave, (see picture) has surpassed that of Trump International Hotel and Tower, 401 N Wabash Ave, with The Ritz standing at $1,076 and Trump at a bargain-basement $1,040, according to a story in Crain's Chicago Business. The blowhard billionaire's response? "That just shows what a great bargain people get to be in a better building in a better location."
This salvo came from Jim Kinney of Rubloff Residential Properties, which is marketing The Ritz-Carlton: "If you're buying brands do you buy Ritz or do you buy Trump? I think you buy Ritz."
Comments
8/24/06
Sam said:
Who has the best branded project downtown? I would say the top two new development branded environments on the market right now are Canyon Ranch and Mandarin. Although there are probably too many super-luxury condo-hotel units being marketed right now, I think these projects will still fare well in spite of a cooling market due to their super-brands…
alison said:
I think there are probably too many hotel condo projects on the market, too, Sam. Which hotel condo developments do you think will crash and burn?
Sam said:
ya know, that's a great question - tough to point to a specific project that is doomed. What I think will actually happen is that several of the current projects will only be able to sell maybe 50-60% of their hotel-condo units, even after a few years of marketing. Which brings up the question - is this sufficient? Perhaps in the developer's pro-forma, this is acceptable, as the hotel (or developer, or another owner) will own the units that were not sold to individuals. I honestly don't know how this works, and it may even vary from project to project. One thing is for sure - this concept, at least in Chicago, is in its infancy and really is untested. One thing that I find very ironic is the fact that these developers probably don't even need to seek this type of financing (selling the hotel-condo units individually) for their projects. The fact of the matter is that the market for hotels downtown is incredibly strong right now, and traditional financing for hotel development (or the hotel portion of mixed-use projects) through the capital markets is readily available right now - investors are screaming for more opportunities in hotel real estate in downtown Chicago, as demand for rooms is very high - business travel is doing very well and Millennium Park has really sparked a huge resurgence in leisure travel to Chicago. I think some of these developers should once again think of their hotel rooms as just hotel rooms, and their projects will be successful…
Nina said:
Ritz or Trump? Hmmm…didn't know that Trump now makes crackers as well.