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Plaza Resort & Spa in Daytona Beach. Premiere Condo-Hotel in Times of Crisis

I wrote about Plaza Resort & Spa in Daytona Beach. Premiere Condo-Hotel a few times before. You can't drive past it and not notice this magnificent historic building with a clock tower capping it's 14-story building.

Started more than 100 years ago (1888 to be exact), its fascinating history captures imagination. In 1998 the resort was bought by Charles Bray and Joseph Gillespie, underwent a massive and very expensive renovation, and became how we know it now.

After the renovation, developer decided to convert the property to condo-hotel in order to pay for the remodeling. They announced the sale in the fall of 2005 and in January and February of 2006 they closed on 2/3 of all the units before the market slowed down. They stopped selling the units and still own abut 1/3 of the units in the resort.

Last year did not see much of the activity in the Plaza Resort & Spa with only 5 sales, which is not surprising as at that time you could buy a condo-hotel unit in other resorts for 1/3 of the money. However, the prices were falling faster in the Plaza Resort & Spa than in any other condo-hotel resort and are now starting from $35K. Obviously, these are distressed sales, but so many sales are distressed, I would say the majority of sales would be considered distressed in a normal market.

For some time I thought I was the only broker working in Plaza, and thhough even now I do more business there than anyone else, other brokers found this gem and are selling the units to their clients.

The reason for such a fallout is simply because when people bought the units at the ab solute peak of the market, they still expected them to be going higher in value. Well, they did not. Now the owners were stuck with the units which value was declining, a huge mortgage, and declining rental income due to the overall state of economy. I have a unit under contract, whihc was originally sold for $409,000. Imagine buying it with 10% down, which was pretty standard when you were buying from the preferred Lender. People might be stuck with a $3,000 a month payment. ANd they see that they could buy the unit for practically their one year mortgage payments.

Even though Plaza Resort & Spa still managed to have one of the highest if not the highest rental occupancies and one of the highest rates, the decline in tourism in the area affected everyone. Nobody thought it would be long before it all comes back, and it took good few years for the owners to understand, that there are no miracles, and that they would not be able to recoup their investment any time soon.

And then they started walking away from the properties. Really, there is no surprise after all.

This is a terrific property, where you can buy a unit for the price that was unimaginable just a few years ago. With these prices the resort rentals cover the expenses and it makes a lot of financial sense for the new owners.

The Plaza Resort & Spa Interested in Plaza Resort & Spa or other condo-hotels? Call me on my mobile: 386-405-4408

Check my mini series of short blogs about condo-hotels.

Check my other blogs about the Plaza Resort & Spa:

Posted by Jon Zolsky, your Daytona Beach, Florida connection on 07/27/2009 11:56 PM

Comments (4)

Plaza Resort & Spa, a Condo-Hotel in the Regional (Localism) Channel

plaza resort spa, plaza resort spa daytona, condohotel daytona, vacation condo daytona, jon zolsky

Originally posted at: Jon's Blog: Plaza Resort & Spa in Daytona Beach. Premiere Condo-Hotel in Times of Crisis

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4 Comments on Plaza Resort & Spa in Daytona Beach. Premiere Condo-Hotel in Times of Crisis

JUL

Uh WOW at those prices and the beauty of the project! Are you having difficulty with condo financing in FL too? We are big time here!

JUL

Renee - Luckily for us, at these prices they are bought with cash, and I did not deal with financing of a condo-hotel for over a year. I know that it is still possible, but not easy, and not cheap. Condotels are especially hard, as this is a niche financing, smaller guys, and they are more and more reluctant to shell out the money.

I can't blame them

SEP

The Plaza is absolutely one of the premiere places in Daytona Beach. If their prices are down that much I shutter to think what some of the small condotels are going for.

OCT

Michelle - sory, i did not notice your comment before. You will be surprised that some smaller condo-hotels, far from Plaza in terms of class and quality, retain their value better.

But nobody buys them (LOL)

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