Condo sales come to near standstill at two condominium-hotels

Condo sales closings have come to a near standstill at two local condominium-hotels, a new report from Deutsche Bank shows.

At Palms Place, only one unit has closed between Dec. 19 and Feb. 9 and Trump International Hotel & Tower has seen four units close in the same time frame.

Only 58 percent of Palms Place's 599 units have closed since units were first made available in February 2008. Nearly 23 percent of Trump International's 1,284 units have closed since being offered the same month.

Additionally, one unit at Palms Place was resold in November by its original buyer for $680,000, Chicago-based real estate research group BlockShopper.com reports.

The unit was purchased for $984,180 eight months prior.

An Oct. 14 article in the Review-Journal discussed the challenges buyers were facing in closing sales.

Buyers of hotel-condominium units are being asked to pay as much as 50 percent down and have exceptional credit to close a loan.

The trend probably doesn't bode well for other condominium-hotel projects opening in the next few years.

Buyers for condominium units at CityCenter will begin trying to close on their units in September.

Potential buyers for some of the 2,184 condo units at the Cosmopolitan, scheduled to open in the second quarter of 2010, have filed lawsuits asking to be released from their contracts.

The elephant-in-the-room is still the 1,018 condo-hotel units planned for the 3,815-room Fontainebleau, a $2.9 billion project scheduled to open in October.

The resort's preview center opened in December, but only contact information is being taken from prospective buyers.

Standard & Poor's Credit Rating Service cut the project's credit rating to "in poor standing" Friday, expressing concern that Fontainebleau "is unlikely to generate any meaningful levels of proceeds from condo sales over the intermediate term," forcing the project to open with a considerably higher debt load than planned.