Thanks again for the data. Now we know the answer to the question many have been asking: Who would possibly buy a 400 sq.ft. refurbished motel room at the GSR to live in?

The answer: Nobody.

It is apparent that these are all investments owned by out of towners. This is less surprising for the GSR, which never really marketed these units locally because a motel-condo unit is necessarily for out of towners. I remain more interested in the trend at the Belvedere, and hope you supply more info as more closings occur.

Thanks to DataGuy.

Agreed Mike Van. The GSR is an entirely different animal than the downtown condos. Selling to different folks for different purposes. Nobody has ever suggested that the hotel-condo project at the GSR was going to be part of the “let’s get people living in downtown Reno” revival. That’s why I remain much more interested in the Belvedere than the GSR. Because if it turns out that the Belvedere ends up being mostly owned by out of towners who will come here for a weekend a month, that’s not going to help the downtown revitaliztion movement very much. For downtown Reno to ever really turn around, these units are going to have to be owned by full time residents, not people just coming here once a month to stay in their privately owned motel room.

I have to disagree with you a bit Smarten. It says in giant letters on http://www.grandsierracondos.com ‘Reno Tahoe’s Complete VACATION Ownership Destination.’ I worked for them, direct with marketing, and you are a little off on how they were marketed. Notice nowhere on their web site OR their brochure they say that it is an investment property. This was the big marketing challenge for GSR…they couldn’t advertise the property as an investment, nor mention anything about the income gained from people renting it. Note in their brochure listing owner benefits it mentions nothing about the return income from room bookings. Only when they were about to sign the contract and were behind closed doors did they learn the details about the income portion. On a side note, I think the ‘Make a Condo Deposit’ button on their website is hilarious.

I think there is a misperception about “how high” the $/SF are at Belvedere vs other “comparable” products.

Here are some actual comparisons for all 2007 sales recorded in the County Files for various properties.

BELVEDERE

Sales - 29
Ave Price - $230,546
Ave SF - 532
$/SF - $433

PALLADIO

Sales - 49
Ave Price - $512,240
Ave SF - 1276
$/SF - $402

OTHER - Arlington Twr 7, Park Twr 5, Riverwalk 3

Sales - 15
Ave Price - $317,693
Ave SF - 880
$/SF - $361

ALL FIVE DEVELOPMENTS

Sales - 93
Ave Price - $393,021
Ave SF - 980
$/SF - $401

Though Belvedere units are selling at a premium per SF to the other 4 developments, the premium is not outrageous. And, because they are smaller, the total cost to buy is significantly less than in the other projects. For out of town part time users, the lower total investment is probably a good offset for the moderately higher $/SF.

Here, for comparison, are the 2007 Grand Sierra sales (excludes the sales in late Dec 2006 which were in the 2006 file).

Sales - 153
Ave Price - $281,191
Ave SF - 460
$/SF - $611

Grand Sierra’s $/SF are far higher than either Belvedere or the other downtown condo sales.

Belvedere, like GSR, is obviously appealing to out of town part time users. If I were such a buyer, it looks cheaper than GSR($230K vs $281K), slightly larger on average (532 SF vs 450 SF) and a whole lot lower $/SF ($433 vs $611).

I see no conspiracy, just different real estate options that appeal differently to different types of buyers.

And yes, Data Guy, I see that I really overstated the cost to own at the Belvedere. Thanks for setting me straight. If one can buy a 530 sq. ft. shoebox for only $230K, that seems to make it even more likely that Bay Area folks may find the Belvedere prices comparable to the bizarro real estate market they already live in.

Data Guy, this came originally from you again? Thank you very much!

Well SkrapGuy, I don’t really want to hijack this thread but consider classic condominium/townhome ownership:

You “own” a condo, but somebody else decides what you can do inside it.

You “own” a condo, but somebody else tells you who can actually occupy it.

You “own” a condo, but somebody else decides if your pet can occupy it with you.

You “own” a condo, but somebody else decides if you can rent it.

You “own” a condo, but somebody else manages it for you, and that somebody decides how much money they will charge for their management fee.

You “own” a condo, but somebody else decides what repairs will be done to the common elements, and when, and how much more you will be assessed.

And have you ever noticed how the neighbor you thought was the nicest person turns into the homeowners’ association board member from hell?

Ah, the joys of home ownership!

One thing that I find interesting about Data Guy’s info is that for the Palladio, the Belvedere, Arlington Towers, the Riverwalk, and Park Towers, we are talking about 93 deals. There is no point in talking about GSR sales because those are not going to be anybody’s residence and are not even intended to be.

So 93 deals. Whats that, about 3% of the closed deals in Reno this year? Well, at least it’s more than the 0.8% of the market that Montreux accounts for that we spent so much time talking about here.

The Belverdere also provides a rental service so although they were never as explicit about it, its easy to see why it appeals to out of towners.

Are you all smoking crack or something? Or perhaps you just don’t read, but I said above that the $49 a night rooms are NOT THE SUMMIT HOTEL CONDO ROOMS. The $49 night rooms are just the plain jane rooms.
Before you all spit out worthless dribble, I suggest you go pretend to book a room at http://www.grandsierraresort.com and see what their SUMMIT SUITE prices are. Here I will for you. Let’s see, for one room, for one night, in their Summit Hotel Suites, a Grand 2 Suite is $80.00, a Grand Suite is $110, an Imperial Suite is $450 a night, a Loft Suite is $350.00 a night, and a Golf Grand Suite is $110 a night. So to all in this thread that keep saying a Summit Suite is $49, go do some research.

I don’t think we are all quite as dumb as that. Well know that the GSR has almost 2,000 hotel rooms. We all understand that not all of them are the condo-ized units that are being sold to investors. We all understand that the lowest advertised rate gets the basic room, probably something left over from the MGM/Ballys/Reno Hilton days.

The point, I think, is that despite all the expensive advertising hype from the GSR, the property is still a mixed bag as a “resort”. I agree that any place offering $49 rooms is going to have something of an image problem if it desires to market itself as a “high end” resort destination. But then, that’s a bigger issue for Reno than just the GSR, isn’t it?

I have also been to a couple of Ritz Carleton condo-hotel properties. They were both truly first rate. And I assure you, there were no rooms, anywhere on the property, for $49 a night.

Mike is sounding like he has an interest in GSR. I am amazed at the listing of buyers who would throw money at this. If the property offers $49 rooms, how many are going to want $110 suites (which by the way, are no different from hotel rooms besides size and design…they don’t even have kitchens!)? That will lessen the bookings for your room, and who’s to say what GSR decides will be their cut down the road? GSR, badly run as it is, books few rooms in the first place. Don’t these buyers also have to pay property taxes on top of everything? And quite honestly, from what I’m hearing about this operation, I have real doubts they’ll last here.

When I stayed at the Ritz Carlton in a condo-hotel suite, I asked a bit about the concept since I was curious. I was told that the way it worked was that the unit was a condo, not a timeshare. In other words, the purchaser bought a condominium that just happened to be located in a resort hotel. The purchaser got a deed to the unit. I was told the purchaser had the ability to decide when he wanted to use the unit, that it was quite flexible. The only restriction on personal use was that the owner had to agree not to live in the unit full time. When the owner was not using the unit, he had the option of placing the unit in the rental program. The property manager would then essentially treat the unit like a hotel suite and would take reservations, provide maid service, do repairs, etc. The room rate charged for the condo unit was, allegedly, the same as for a comparable suite that was not individually owned. As compensation for this service, the operator/manager took a percentage of the room rate that the guest paid. I can’t recall exactly the percentage, but I seem to remember that it was quite high, something like 75%. But don’t quote me on that.
Keep in mind also that the Ritz guy I was talking to was talking only about that property, and so the arrangements may be different with other operators and different properties.

Obviously, the questions and issues that can arise here are many. Beyond the scope of this thread I think. There is a ton of material on condo-hotels. Just google condo-hotel ownership and set aside about 3 days to read it all.

In response to SkrapGuy’s request, here is a breakdown of RECENT sales for various projects by buyers mailing address. For simplicity - rather than listing the hundreds of sales individually - I have created location groups.

The groups are:

RENO - buyer address is RENO only.

RENO METRO - buyer address is roughly within 1 hour of Reno - includes RENO PLUS… Sparks down to Gardnerville along 395, out to Fernly and Fallon and areas around Lake Tahoe including Truckee.

TIME FRAME - I looked at all transactions from 2004 TO DATE. When multiple transactions for the same parcel occurred, I eliminated all but the most recent.

NOTE: For all properties, “roughly” 90% of the sales that were made outside of what I termed the RENO METRO area went to west coast mailing addresses. For Grand Sierra it was slightly lower (80-85%). For simplicity, I have not broken down where NON-METRO buyers tend to reside, but it is heavily biased toward areas within a reasonable driving distance of Reno (mostly Northern CA).

In the table below, the first percentage is RENO mailing addresses. The 2nd percentage is RENO METRO mailing addresses and following the name of the development (in parentheses) is the total number of transactions examined.

68% 88% ARLINGTON TOWERS (56)
73% 82% PALLADIO (51)
61% 70% PARK TOWERS (56)
66% 69% BELLA VISTA (29)
50% 60% RIVERWALK (109)
03% 10% BELVEDERE (29)
01% 02% GRAND SIERRA (179)

I listed the projects from the largest to the smallest proportions of RENO METRO AREA sales.

Almost 9 of 10 Arlingon Towers transactions are associated with RENO METRO mailing addresses. Palladio is also VERY HIGH.

Belvedere and Grand Sierra are on the opposite extreme.

I seem to recall reading a few months ago that the company retained to sell the “condos” in the GSR resigned due to poor sales. Anyone remember that?

I am struck by the smallness of the number of deals. If I understand Data Guy correctly, since the beginning of 2004 to date, a period of now almost four years, there have a total of 301 deals at Arlington Towers, Park Towers, Riverwalk, and Belvedere combined. That can’t be more than 2% of all residential real estate closings in that time period. This blog has spent a lot of words over the past year talking about a statistically insignificant segment of the real estate market. I suppose that’s understandable given all the hype and press these downtown condo projects have bought and paid for. But is it really a bit of a tempest in a teapot?

A little bit off base [sorry], but I just received an e-mail which gives a little different view from a little different perspective that some on this blog might appreciate.

The Village at Squaw Valley - you know, the European Village of mixed upscale shopping/condos developed several years ago at the base of Squaw Valley U.S.A.

Like the rest of the Lake Tahoe Basin/Reno Metropolitan Area, pricing at the Village rapidly escalated in the 2004-2006 period.

Well this afternoon I received an e-mail from a local realtor specializing in this development letting me know that a pending sale of one of her 1 BD/1BA condos in Station 22 had “fallen through” and the owner had decided to reduce his asking price to $369K to make a fast sale [it won’t last long (don’t you just hate these words?)].

To put this price in perspective, it supposedly represents the lowest resale price [by $20K] in the Village’s relatively brief history. Also during the last two years, I have watched prices for similar units steadily climb up to the $475K range. So for there to be a 22% drop in price in roughly a year on the eve of the most popular season for Squaw Valley, is IMO remarkable.

It’s also an indication that in the “so called” hot Lake Tahoe resort real estate market which appeals to rich Northern California second home buyers/investors, even pricey Lake Tahoe is not immune to what’s going on in Reno/Sparks and other similar surrounding areas [like California’s central valley, Rocklin, Roseville, etc.].

Let’s see if Mark and Lexi include this type of non-biased real estate information in next month’s Lake Tahoe/North Shore real estate newsletter!

Regarding the “low numbers” of downtown condo sales from 2004-date… Of the sold- out condo projects, none contain a whole lot of units.

Of the ones that are not sold out, Riverwalk is almost sold out and it contains in the low 100’s, as I recall.

Palladio contains something like 90 units and has closed on 53 I think (only 51 are in the closed file). I think it has about 8 still in escrow and 30+ including a few resales currently on the market.

Of the two projects with larger numbers of units, Belvedere has barely started closing (29 closings out of its projected total of 380 or so as I recall) and Montage is not yet closing but will look to close on most of its 384 or so units over the next couple of years.

Less heralded, but fairly significant are the growing numbers of smaller low-rise condo projects that are beginning to surface. Grants Landing will have more than 100 residences. Ryder is apparently about to break ground on the first 28 of 50-60 units it plans to sell (a bit south of Grants Landing). Another 15-20 unit infill project is set to start a block south of Mill on Holcomb. Thoma Street Lofts may break ground soon and plans 30-35 units - as I recall - to name a few.

These types of projects haven’t received nearly the hype of the highrise casino rehabs and the several stalled new high rise proposals, but they will also contribute a lot to the future health and vitality of the downtown area.

I have actually heard this about the GSR as well from a vendor leasing space in the basement shopping area.

Does it mean anything? Dunno, but it would be one way to get rid of some labor contracts that GSR management has been complaining about recently.

Be sure and check out Diane’s rates for blog coaching - $200/hr or a $5000 prepaid package.

All we need is some voodoo financing packages for these services (Jeff?) and it is truly back to the Good Old Days.

$200 an hour is about what a jumbo jet airline pilot makes. Certainly Diane has both the comparable skill set and responsibility - right?

Diane - you just broke my heart.

$200 an hour yikes! That seems a bit steep when most marketing firms and web firms in town charge half that rate and have plenty of experience with blogs and marketing one’s self. Especially when the average residential realtor is near broke. BUT, I wish her the best of luck, I can say confidently more realtors need to follow her lead in marketing. In fact I have acouple of real estate clients I may push her way to get educated in blogging. Luckily though they are both commercial brokers and not residential, and the commercial/industrial market is actually booming right now so they can afford that rate…LOL oops did I say that? Poor poor residential realtors.

Diane doesn’t have to convince the readers of this blog, 2,500 Reno area realtors (or agents), or the average residential realtor (or agent) that her services are worth what she charges. She just has to convince a FEW agents who can afford to pay her. She only has so many hours in a week to sell, for crying out loud!

Furthermore, people’s perception of what her services are worth are influenced by how much she values herself. Even if it’s just subconsciously, her value goes up in their eyes just because she has placed a high value on herself. The reverse would be true if she placed a low price on her services. I wish her well with this new endeavor.