A team of developers on Florida’s Gulf Coast is pushing the trend of putting luxury hotel brands on high-end condo projects from Miami to St. Petersburg.
The municipality of around a quarter million residents also will follow its larger sibling city of Tampa, which has seen high-end condos take shape with the Ritz-Carlton and Penury brands, among others, the Tampa Bay Times reported.
The trend has been a mainstay of Miami’s market in recent years, with five-star hotel brands joined by other luxury marques ranging from Porsche to Dolce & Gabbana on residential developments.
The plan in St. Petersburg has local firm Feldman Equities working with national developer Property Markets Group and City Office REIT, which owns a downtown parking garage that would be torn down to make way for hotel-branded residences.
Dan Kaplan, managing partner at PMG, told the Times that a deal is nearly done “to bring a 5-star, luxury-branded condominium project to St. Petersburg” but stopped short of confirming other reports that it would be a 44-story Waldorf-Astoria.
Branded condo deals typically give luxury hotels a cut of sales — often in the 1-to-3 percent range. The hotel provides a brand halo for the project, and services such as housekeeping and other hotel-style amenities to unit owners. The deals sometimes include an actual hotel within the building, separate from residences on the rest.
St. Petersburg has numerous high-end condos, but new developments seem to be in a race to attach established hospitality brands to projects. The Related Group’s deal with the Ritz-Carlton in Tampa acted as assurance of quality services after purchase, said Kurt Drstvensek, a Related managing director. The tower fetched a record price of $11.6 million for a unit in May.
The developers in St. Petersburg seem to be well timed, with demand for high-end condos exceeding supply, according to Derek Hayden, vice president of JLL’s hotels and hospitality unit. The 46-story, 301-unit project dubbed 400 Central has racked up more than$250 million in pre-sales.
“We’re seeing these $7 million, $8 million condominiums sold in pre-sale, versus 10 years ago you would have been hard-pressed to see those sell for $1 million,” Hayden said.