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.
Interested in Plaza Resort & Spa or other condo-hotels? Call me on my mobile: 386-405-4408
Check my other blogs about the Plaza Resort & Spa: