ATLANTA-Although Jones Lang LaSalle Hotels has been hired byChicago-based Capri Capital Partners as the asset manager for the WAtlanta Hotel & Residences, the company doesn’t have any plansto make changes in how the property operates, says Justin Epps,vice president, Jones Lang LaSalle Hotels. Instead, it is chargedwith looking at the strategic, long-term picture for theproperty.

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In addition, says Martin G. Alston, Capri Capital Partners'chief administrative officer, “We retained Jones Lang LaSalle toassist in the transition from the Barry Real Estate Co. to Capri."In April, Capri, as manager of a co-mingled fund of institutionalinvestors, assumed primary ownership of the 28-story, mixed-usehotel and condo property when they converted their mezzanine loaninto an equity interest. The Barry Real Estate Companies developedthe W Atlanta Hotel & Residences.

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“We are doing an initial assessment of (the W), including the 75condominiums associated with it,” says Epps. “To date, only one ofthe condominiums has sold, but we will be working with the currentbrokerage firm, Atlanta Fine Homes, to get those condos back ontrack.”

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“The problem with selling the condominiums,” says Epps, is thatFannie Mae views any condominium which shares services with a hotelas a condo-hotel, but these are not condo-hotels, because the unitsdo not go into a rental pool, although they do share a pool andfitness center with the hotel,he says. Once this issue isclarified, that will clear the way for financing of thecondominiums, says Epps.

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The condominiums at the W were finished in the fourth quarter of2008, says Epps. “This was really bad market timing and Atlanta isnot a mature high-rise condo market,” which adds to the difficultyof selling the units, he says.

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Prices for the condominiums at the W start in the $300,000s to$2.5 million for penthouses, but the high prices are not whatconcerns Epps. What is an issue, he says, in addition to thecondo-hotel question, is whether these units will be purchased assecond homes, which, given their downtown location, could be thecase. If they are second homes, Fannie Mae won’t finance them, saysEpps.

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