Holtze Converting Hotel to Condos

It would just be too expensive in most cases, Holtze says. Hotel consultant Bob Benton also says he is unaware of any hotels to be converted into condos, other than mountain properties, which aren't "true condos," as most people think of them, he notes. In those cases, condos are sold as interval ownership or condos, but typically remain in the hotel rental pool.

Holtze has renamed his 120-unit, extended stay hotel as Boston Commons Condominiums. There are 10 one-bedroom units, with prices starting at $119,000. The other units are priced as high as $169,000. So far, at least 15 have been sold.

Holtze says of the seven extended-stay hotels in the Denver Tech Center area, he believes his has the highest RevPAR numbers. His average occupancy rate, while still relatively high compared to most hotels in the mid-70% level, is far down from the peak a few years ago above 90%, he notes. The problem is that the number of hotel rooms along the corridor has grown substantially, while many big employers such as Hewlett Packard, Merrill Lynch and JD Edwards have either shut down their operations, or dramatically scaled back, hurting his business.

Holtze says he initially designed the rooms with their own individual gas and electric meters, making it easier to convert to condominiums than most hotels. At one point, the Executive Tower Inn in Downtown considered converting to condos, but that deal never happened.

"We've kept hotel operations going simultaneous with home sales up to this point," Holtze says. "Now we've reached a critical point where we want to provide a more residential feel for our first owners."

The hotel is now only open to guests planning to stay more than 30 days. The decision to transition now from hotel to condo operations also opens up government-backed financing options through Fannie Mae that are available solely to non-rental properties. Holtze says he expects many of the buyers to be first-time home buyers who work in the Denver Tech Center, and might otherwise be priced out of the area and it's expensive housing. In many cases, the after-tax cost of buying will be less than renting, he says.

Boston Commons is a block where T-REX crews are at work on theGreenwood Village Light Rail station on South Yosemite Street, and from the proposed site of a Greenwood Village civic center. According to Silvio DeBartolomeis, director of builder marketing forColdwell Banker Residential Brokerage, agent for Boston Commons, theconversion away from hotel operations will accelerate sales. "Coupled with the low financing that's available this fall, somebody with any confidence in the market is going to want to take advantage of the pricing," he says.