Building:	Madison Tower/Hotel 1000
Location:	Downtown Seattle
Client:	Murray Franklyn
# of Homes:	47 plus hotel below
Year Completed:	2006
# of Stories:	24

Challenge

This tower was the first proposed condominium/hotel in Washington State. In fact, the idea of a mixed-use hotel/condominium was still fairly novel around the country in the late 1990's when we were first hired to do a feasibility analysis.

Our first challenge was to determine the premium the condominiums would gain from the hotel. Under the original plan which was to bring in a nationally branded hotel it was a little easier to determine this premium. However, during the planning and permitting 9/11 occurred which put on hold the entire project and of course the hotel business changed as a result. When the timing was appropriate to review again the development of this site the Condominium Developer became the hotel owner without a recognizable name or brand which was an additional challenge.

Our second challenge was the site itself which is a quarter block on a steep slope. The site did not lend itself to separate lobbies for the mixed uses nor did it allow for ramped parking with would allow for a self-park underground parking garage which was typical to our market.

We were then asked to determine the feasibility of pushing price over the $900 per square foot level which was well above market in 2005 in downtown Seattle, particularly in this neighborhood which was south and west of the downtown core.

Solution

To determine the premium we traveled to cities around the country that had hotel/condominiums to interview brokers on value and homeowners on what attracted them to this combination of uses and what they perceived as the additional value. We asked homeowners what hotel services attracted them when they bought and what amenities and services they appreciate as an owner. We then compared pricing in condominiums over hotels to stand alone condominiums to determine a range for the premium which we found varied depending on the hotel brand.

The team agreed to settle for valet parking with garage elevators to transport cars down into the parking garage. To make this a positive amenity the Owner put a lot of thought into making a garage area where homeowners could opt to leave their car for the valet that was a welcoming space with good lighting and upgraded flooring with state of the art equipment to monitor and photograph the car prior to going into the garage elevator, so we could ensure buyers of proper handling. Or the owner could opt to drop off their car in front of the hotel. A house phone was installed in every condominium so hotel services could be ordered, including the valet bringing up your car, at the touch of a button.

The lobbies were combined into one in spite of the fact that most of the properties we visited had separate lobbies. A private condominium lobby was designed into the hotel lobby to allow owners to use the hotel concierge when their private concierge was not on duty minimizing HOA dues and offering additional services 24/7.

Results

The pre-sale center opened in the spring of 2005. When the hotel opened its doors in the summer of 2006 all 48 homes were sold. Sales prices topped the $900 per foot projections when the condominium market was less than robust and other downtown condominiums were averaging just over $500 per foot.