Hotel Condos for Miwaukee and More
The boutique hotel chain Kimpton is preparing for construction on its 600,000 square foot hotel/condo in the heart of the Miwaukee city center. Designed by HKS Architects, Kimpton Hotel and Condominiums will feature 63 condominium units with 176 guest rooms along with retail and office spaces. The property will also have stunning views of Lake Michigan.
Hotel/condominiums have been a highlight for the past decade and it is a marvelous idea for hotel owners from a financial perspective. First of all, land prices are exuberantly high, so the first thing that comes to mind is: build as much as possible/don’t under-utilize. However, most markets do not allow for 50-story, 2000 room hotels, unless you are in Las Vegas or Macau. So the most feasible would be to combine the hotel with something else… maybe an office building? Many cities, especially in Asia, it is a very popular concept. Many newer hotels in Tokyo and Hong Kong are built that way, since land is so expensive, but those cities also happen to be major financial centers. In the US, there are very few financial centers and second-tier cities like Milwaukee or Portland, Oregon don’t have extreme demand for office space compared to, say New York or Washington, DC. How about putting in some condos? Why not? It usually allows the developer to make a profit on otherwise unused space and in many US markets right now, condos are expensive. A one bedroom condominium (around 700 square feet) sells for around US$ 500,000 in the Seattle, Washington metro area. Penthouses and larger units easily top US$ 1,500 per square foot in the same region. Although labor and material costs are rapidly rising, I doubt it takes that much money to build. In the end of the project, perhaps the hotel owner will make some money and if lucky, get a FREE hotel!
