The condominium market’s loss is the apartment market’s gain, according to surveys of multifamily housing developers by the National Association of Home Builders.

Builder confidence in the condo market dropped dramatically in the second quarter of this year, while confidence in the apartment market hit record highs.

NAHB Chief Economist David Seiders says there is “clearly an oversupply” of unsold condo units, while vacancy rates for apartment buildings are dropping and rents are increasing.

“It looks pretty solid for the rental market for the foreseeable future,” says Leonard Wood, director of Wood Partners, a Marietta, Ga.-based multifamily housing developer.

The conversion of apartments to condominiums when the condo market was hot helped increase the demand for new apartments, he notes.

Now some projects that had been planned as condos are being switched to apartments. But these are “marginal projects” in poor locations, says Bruce Menin, president of Crescent Heights, a New York City-based developer of high-rise condominiums.

“Special projects on special streets in American cities are not going to get replicated,” he says, and will still do well.

But some projects may get harder to do as condo prices soften, he says. This means local governments should moderate their demands for low-income units in new condo projects, he says. That’s “a good public policy goal,” he says, but requirements that are too onerous could keep projects from getting off the ground. This ultimately would reduce housing supply, and make housing more expensive in tight markets, even for moderate-income residents, he says.

Wood says local governments should “be more careful” about adding costs to multifamily housing projects through impact fees and building codes.

David Hendricks
Express-News Business Writer

The Atlanta-based developer of a planned northwest San Antonio retail complex is pushing ahead with an expanded high-end hotel-condominium project valued at $130 million, despite the withdrawal of its luxury hotel management partner.

Thomas Enterprises will break ground this summer on the 13-story project named Hotel Talavera, with 152 hotel rooms and 133 condos at The Rim, on the northeast corner of Interstate 10 and Loop 1604. The opening is slated for spring 2008.

The expanded project was announced Thursday after news earlier in the week that Atlanta-based West Paces Hotel Group and its planned luxury chain brand, Hotel Solís, had withdrawn from the Mexican colonial-style project.

West Paces left the project after Thomas Enterprises expanded the hotel from its original four-story hotel design to include condos, said Thomas Enterprises President and Chief Executive Stan Thomas.

“It will be among the nicest hotels in Texas,” said Hal Thannisch, president of Thannisch Development Services Inc. in Atlanta, the developer for the Hotel Talavera project. “It will be notable in Texas among other luxury hotels.”

The Talavera name comes from the distinctive tile and ceramic arts that originated from the Mexican city of Puebla during the French Army’s occupation in the mid-1800s and spread throughout Mexico in varying interpretations.

The hotel’s ground floor will be common space, including the lobby. Hotel rooms, averaging 500 square feet, will occupy the next three floors. The condos will fill the remaining floors, ranging from one-bedroom units at 1,200 square feet to three-bedroom units at 2,500 square feet.

Penthouses with rooftop terracing will be larger. Condo prices will range up to $1 million or more, Thannisch and Thomas said. Condo residents will be entitled to the same services and hotel amenities as the hotel guests, including room service and the planned 11,000-square-foot spa.

“This will be a little oasis,” Thannisch said. “We’re trying to strike a prominent landmark for that corner of San Antonio. It’s exciting to make that addition to San Antonio’s dynamic growth.”

Hotel Talavera will operate two restaurants, an 80-seat restaurant with 40 seats outdoors and a casual poolside taqueria. A culinary center will allow for “food and fun” activities in which guests and residents can learn about cooking from chefs and match foods with wine.

A 4,600-square-foot ballroom also is planned, along with a 2,000-square-foot meeting room and two smaller meeting rooms.

The hotel-condo project will be on the caliber of the Thomas Enterprises’ Las Ventanas al Paraiso resort in Los Cabos, Mexico. The San Antonio hotel “will have the same design team. Mexicans know Las Ventanas as the market leader in their country,” Thannisch said.

The design team consists of Dallas firms HKS Inc., the architect SWA Group, which will do the landscaping, and Paul Duesing Partners, which will do the interior design.

Thomas Enterprises has developed or plans to build similar projects in the Atlanta area, in Orlando, Fla., and in California, the Caribbean and Europe. “Our desire is that each project express their own individuality and provide authentic experiences for guests,” Thannisch said.

Hotel Talavera will provide the residential anchor for The Rim, which is called a “lifestyle center” based on the idea that residents will not have to leave the residential-retail complex for shopping or entertainment.

The Rim’s retail center will cover 2 million square feet on 150 acres of the 800-acre site. The retail anchor will be Bass Pro Shops Outdoor World store. Other retail tenants have not been announced.

Adolfo Pesquera
Express-News Business Writer

Fairfield Resorts, an Orlando, Fla.-based division of conglomerate Cendant, is buying out Loopy Ltd.’s interest in a 10-story residential project that will be adjacent to La Cascada, downtown’s newest luxury condominium.

Mitch Meyer of Loopy said construction will begin by late March or early April. To be known as Fairfield Resorts at La Cascada, the tower will provide 100 time-share units.

Fairfield Resorts is the largest time-share company in the world with 499,000 families holding interests, but its holdings are predominantly on the East Coast, said Adam Schwartz, a company vice president. It recently started building in places such as Las Vegas, Hawaii and the California coast.

Fairfield has only one other property in Texas, Schwartz said, the Riverside Suites at 218 College St., a property acquired two years ago during the buyout of another time-share company.

“San Antonio is an area that we’d like to aggressively expand in, and we want to start in one of the most popular destinations in the state, the River Walk,” Schwartz said.

Fairfield Resorts signed a definitive purchase agreement with Loopy this week and will close on the property when the tower is completed in late 2006.

Meyer originally intended the tower to be a hotel, but those plans were derailed by the downturn in the hospitality industry after the Sept. 11, 2001, attacks. With sales strong at La Cascada’s tony units by the San Antonio River, Meyer was moving toward building a second condominium tower when Fairfield Resorts contacted him.

Fairfield’s tower will feature La Plaza, a 14,000-square-foot ground-level retail center.

“La Plaza will be the final jewel in the La Cascada crown,” Meyer said. “It will feature a small urban grocery store, liquor store, dry cleaning drop-off, a restaurant, bar, gift shop and other amenities. It also will have maid services, room service and concierge services for both residential towers.”

Meyer expects the deal will accelerate sales of the remaining 17 condominiums in La Cascada because a number of prospects were waiting for the second tower project to move forward. Loopy has sold 29 of the units and will have residents moving in by Christmas.

“La Cascada will be substantially complete by mid-January,” Meyer said.

By Brian K. Miller
Last updated: December 14, 2004 11:14pm

SAN ANTONIO, TX-Fairfield Resorts of Orlando reveals plans to develop a two-building complex along this city’s Downtown River Walk, a 2.5-mile cobblestone pathway lined with hotels, restaurants, sidewalk cafes and riverboat operators. The project will include 100 timeshare units, 48 luxury condominiums and 14,000 sf of retail.