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Condo-Hotel Bubble Pops, Splatters Many

As more rooms go empty, buyers target developers

By Rob Quinn,  Newser Staff

Posted Apr 5, 2008 12:12 PM CDT
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(Newser) – Condo-hotel rooms were a hot buy at the height of the housing boom, but marketing them as investments that would pay out every time they were occupied could come back to haunt developers, the Wall Street Journal reports. As business sours, buyers who find themselves making mortgage payments on empty rooms are suing to get refunds.

Developers loved the up-front financing the condo rooms provided, but if regulators can be shown proof they created unfulfilled expectations for room occupancy rates or income, they could have to cough up refunds. "All you have to do is find the developer's newspaper ads, and it could be a devastating blow," one lawyer said.

Buyers have found themselves losing plenty of money on their condo-hotel room buys and many blame developers who sold the rooms as an investment.
Buyers have found themselves losing plenty of money on their condo-hotel room buys and many blame developers who sold the rooms as an investment.   (Getty Images (by Event) Individuals)
Condo-hotel rooms were a hot buy in Florida during the real estate boom but as the economy slows down and their values plummet, some buyers are looking for ways to get their money back.
Condo-hotel rooms were a hot buy in Florida during the real estate boom but as the economy slows down and their values plummet, some buyers are looking for ways to get their money back.   (KRT Photos)
Condo-hotel rooms like the ones in the Trump International Hotel & Tower aren't proving as good an investment as many buyers had hoped.
Condo-hotel rooms like the ones in the Trump International Hotel & Tower aren't proving as good an investment as many buyers had hoped.   (AP Photo)
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