Upper Upscale Hotel Cos. Enter Condo Arrangements

The trend among deluxe hotel brands to team up with real estate developers to build new properties as part of condominium residential projects spread to the upper upscale segment of the industry this week with the announcement by Starwood Hotels & Resorts Worldwide that it would employ this approach to develop W Hotels. Starwood announced such multi-use projects today in Fort Lauderdale and yesterday in Dallas, partnering with different real estate developers.

For buyers who work with Starwood, there will now be additional inventory in two popular transient and meetings markets. For Starwood--as for Ritz-Carlton and Four Seasons, which are examples of deluxe hotel companies that have entered into these condominium arrangements--it gets to expand its presence into new markets with the real estate developer assuming most of the financial risk.

Starwood's W Fort Lauderdale Hotel and Residences will consist of a 346-room hotel and 171 apartments, while the W Dallas Victory Hotel and Residences will consist of a 251-room hotel and 94 residences. Completion of the projects is expected in 2006 and 2005, respectively.