MIAMI—The Securities and Exchange Commission (SEC) recently adopted a new rule that marks good news for condo-hotel developers. In the last real estate cycle, condo hotels were popular among domestic and international investors in Miami, Fort Lauderdale, New York, and Las Vegas. Yet, developers were restricted on how they could market their projects without violating SEC rules.

The SEC Rule 506(c)—which went into effect on Sept. 23, 2013—lifts that restriction, creating new business opportunities for developers and the real estate brokers marketing condo-hotels. What does that really mean?

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