Is Chicago's hotel condo market for morons?

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We’ve been watching developers jump on the hotel condo bandwagon over the last year and wondering whether it is the hot new thing that so many claim that it is. It seems that at least a few developments aren’t coming to fruition. The Fordham Company has decided against marketing hotel condos at The Ambassdor East Hotel, according to news reports, and The Falor Companies is pulling out of the Solis Hotel and Spa, although Falor hasn’t confirmed that. Developer Peter Dumon of The Harp Group, which was an investor in The Ambassador, says his company pulled out because: “It is a business that is dependant on a moron buying your unit,” according to a story in Monday’s Crain’s Chicago Business.

Dumon says there is a “thin geographic market” for hotel condos. That said, projects like Trump and the Shangri-La Hotel at Waterview Tower are reporting decent sales. Dorrie Freiman at Waterview tells Yo that 35 percent of the project’s 222 units are sold after nearly a year on the market and that developments with a strong brand should do well. Laura Sherman at LR Development Company‘s Canyon Ranch Living, which hasn’t opened sales, tells Yo that the ideal buyer of a hotel condo is one who knows he or she will want to use the unit regularly, whether it’s a condo near the slopes in Vail or in a high-rise surrounded by spa amenities in downtown Chicago.

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