The global situation has led us to rethink solutions and improve responses in all sectors, as well as the construction and real estate industries reinvent themselves. We are at a momentous moment in human history and we must capitalize on 10 as soon as possible.
Faced with this panorama that COVID-19 represents, there is currently a population density issue on the table, that is, the scheme of developing homes with several tens or hundreds of units within the same space is being rethought.
We are aware that the Polígono Central and surrounding areas of our Greater Santo Domingo have been growing, without future planning, in vertical housing, resulting many times lower according to the population density, compared to other cities worldwide. This continues to represent a magnificent opportunity for the development of new models that make it possible to improve the offer of spaces to inhabit: however, the confinement itself brings to light the need that, for years, we have been raising about shortening distances and reducing use of the automobile, trying to create healthier communities that bring benefits of raising the happiness and quality of life of the inhabitants.
The availability of land is limited, to build new complexes. Developing mixed-use buildings will be able to have in the same space with everything necessary to survive without leaving the complex. being fundamental to satisfy all the requirements that are had. Design adequate accesses with the greatest possible circulation and independence, between the links that may occur in the multiplicity of activities: commercial, residential, educational, hotel, industrial, cultural or institutional so that they do not interfere with each other.
The result will be the creation of vertically, physically and functionally integrated microcities. If we look at the history a bit, we find that the first mixed-use building was Marina City, located on the banks of the Chicago River. Completed in 1962 and almost sixty years later, it remains a global icon of urban development. It is made up of five buildings: two residential towers, a concert hall (formerly a theater), a hotel (which was previously made up of offices) and the ground floor —full of restaurants—, which connects these four buildings with the marina (which gives name to the set). He achieved the intention of the architect Goldberg, that the workers did not have to travel from the outskirts of the city to the center every day to work.
The New Urbanism emerged in the 1980s in the United States to respond to the general dissatisfaction of the environments, since there was a separation of human activities such as residences from shopping centers, civic institutions and offices. For many years, in the wrong way, it was built by segregating uses due to a bad urban development policy, which today brings us problems of mobility, marginalization, traffic, massive use of the car, pollution. Today we are more aware of environmental care and the importance of well-being and quality of life, which leads us to make efforts to reverse this trend.
This separation of uses demonstrated, after decades of application, that they are unsustainable from a social, economic and environmental point of view, since they produced a continuous metropolitan area: dominated by highways and parking lots: a dispersed city with extreme consumption of infrastructure and a society dependent on automobile use, with residents wasting much of the day in traffic to get to work, places of purchase, or residential units.
In 2017, the United Nations (UN) determined that urban areas concentrate 54% of the global population and 70% of economic activity. Edward Glaeser, in his book Triumph of the City, states that, according to studies done in the United States, people who live in denser cities are happier and have a higher quality of life. The city is a human invention that has fostered, nurtured and defined our culture, civilization and economy. Dense and well-planned cities promote contact and encounter between people, which, in turn, creates wealth and well-being through creativity, contact, and collaboration.
Since the seventeenth century, the concept has been evolving in an attempt to integrate the uses of buildings, so that they are compatible physically and functionally oriented to pedestrians and public uses. To promote denser and more efficient cities that allow to provide a dynamic Life at a short distance, mixed uses are an effective solution. Renovate and reconvert spaces that are now in disuse as a city, redensify certain areas and renovate based on an overall vision, will lead us to a healthier city.
The approach has been expanded with new components and the evolution of consumer needs. Not only are shops, offices, hotels and residences combined, but the needs of education, health, well-being, security and personal development are also met. In turn, these projects achieve a positive integration with their urban environment, when factors such as transport, green spaces and new technologies are considered.
In the operation of these buildings a self-demand is usually generated. For example, an apartment building that has a commercial plant will create a customer niche for it. This is provided that they are well planned and designed to generate these operational synergies.
Another vital point in mixed uses is the sustainability of the property, so that it is more attractive to the new pro-environmental generation. Taking care of natural resources continues to have great value and will bring better dividends, even if the investment is a little higher.
Open spaces and integrated in the best way with technology are part of the new trends, as well as having amenities in outdoor areas.
Builders and developers in general should begin to think about the needs not only of millennials, centennials and generation Z, try to meet their requirements as of today, since, due to generational habits, in the next 20 years they will be the largest consumers of housing globally. The rent prevails over the purchase for this audience.
A fundamental factor in the success of mixed projects in large cities is the adequate study of the site to offer, through architectural design, a response that generates greater profitability for clients. These projects increase their capital gains because they offer a greater financial guarantee to investors, generating jobs, public income and social meeting places.
We must recognize that our city does not have spaces for walking, contact with nature, enjoyment, offering a solution to the issue of mobility. Creating a commercial balance is part of what guarantees the success of mixed uses, since we have a multiplicity of services that will shorten the distances and routes, maximizing the value and use of the land, benefiting citizens to avoid transfers that lead to greater time, pollution and they offer a better quality of life, since day-to-day life takes place in shorter distances that can be traveled on a pedestrian basis, without the need for a car or public transport. Communities (residences, work, businesses, education and entertainment) are created in a walkable radius, which frees citizens when it comes to mobilizing.
In large cities of the world, important developers, builders and investors are focused on mixed-use projects, aware that they are being the key to a differentiating value within the market, offering a successful coexistence because they achieve that cities are renewed and create an effect immediate positive for citizens, while being highly profitable in financial terms. Regardless of how it develops, this is an important concept in urban planning and future development that has the power to create flexibility in planning policies for the future of our cities.
In conclusion, let me emphasize that the primary objective of mixed uses is to integrate communities with proximity, but a proximity on a pedestrian scale. Mixed-use complexes as an urban solution are designed to create environments adapted to people. With this we managed, both architects, developers, clients and government authorities, to prioritize people as a new mindset, offering cities to live in.
WHAT ARE THE CONDOHOTELS?
DIFFERENCES BETWEEN CONDOHOTEL AND CONDOMINIUMS WITH SMALL APARTMENTS
From an economic perspective, it seems essential, in view of the events that have taken place in the Anglo-Saxon market, to reorient the figure of the condo hotel so that its nature as an investment product gives way to a “paid second home” nature.
The figure of the hotel or condohotel condominium is not a new concept. It dates back to the decade of the seventies of the 20th century, but the success obtained during the last decade has brought it back, with more force. The concept of condohotel -condotel and even hotelcondo- originates from the fusion of the words “condominium” (a term used in the United States to refer to horizontal property) and “hotel”, part of a conception of the hotel establishment that essentially caters to The structure of the real estate property on which it is based.
The condo-hotel can be defined as that building intended for hotel accommodation, whose ownership is horizontally divided, and in which its owners contractually assign the management to a single operator in exchange for an economic consideration. with the possibility in addition to using your property privately for a certain period of time per year.
Functionally, it is simple: individuals acquire ownership of one or several portions of the tourist accommodation establishment susceptible to economic exploitation – which are called accommodation units – and joint ownership – undividedly – of the common elements of the property. Then a private operator is hired. that assumes the hotel management, the operation of the accommodation unit or units of its property, in such a way that both – owner and manager – obtain an economic return, the distribution mechanism of which will also be established in the aforementioned hotel management contract. Finally, it can be included in the agreement that the owner personally use some of his accommodation units for a certain time, so that during these periods the owner can stay at his property as another guest, enjoying the services and facilities offered by the establishment of tourist accommodation under the conditions agreed in the hotel management contract. The remuneration to the operating company of the establishment can be materialized through a fixed amount agreed in the assignment contract, but it is also possible that it is set based on the operating results, so that the income derived from the use of the units of accommodation are distributed, in the agreed percentages, between owners and operator. This last modality allows the parties to share both the risks and the benefits of this association. And with regard to expenses, the management company of the establishment must pay those derived directly from its tourist exploitation (personnel, cleaning, maintenance, advertising, taxes related to business activity, etc.), while the rest would be in charge of the owners (major repairs, reforms, insurance and taxes related to the ownership of the property and the benefits obtained from the operation of your accommodation unit). There is freedom of agreements in this matter.
BACK WITH MORE STRENGTHS
The reasons why the figure of the condo-hotel has become topical again are varied. Industry analysts highlight the drop in hotel profitability, the growth of residential tourism, the asset divestment plans by some hotel chains and the entry of new investors into the sector. Through this figure, the tourism sector aims to attract investment in second homes; that despite the economic crisis suffered in recent years, it has not stopped growing. We understand that the pandemic has multiplied the number of people in demand for second homes.
The advantages of using this tourist exploitation system are bidirectional in nature. In the first place, it allows the tourist entrepreneur to access a property for its hotel operation without making the investments that its construction entails. so that you can start the management of this without the need for financial outlay or external financing.
From this point of view, the advantage for the hotel entrepreneur is undeniable, but it does not differ fundamentally from that achieved with long-standing civil contract modalities, such as industry leasing. With regard to investors, the advantage for them is also undeniable because, taking into account that second homes are generally used for a short period of time per year, their transfer to the tourist entrepreneur allows them to obtain economic returns from them at those times. in those that are not used by their owner.
But not only the purchasers of second homes of a holiday nature can find advantages in this figure. Also for certain people who, for various reasons (family or work, mainly) must travel recurrently to a destination, it may become less expensive to own a space in which to spend the night during their travels, so that the expense dedicated to this need can be recovered by transforming it into a real estate investment.
This last possibility is worthy of consideration not only by natural persons, but also by legal entities, since for certain companies it may be more advantageous to house their workers in spaces of their property -whose investment can be amortized during the time in which are not used by them through their tourist exploitation. to pay individually for each of these overnight stays.
Condo hotels are often associated with the term timeshare (famous “timesharing”) that was very fashionable a few decades ago. In timesharing, room units were sold individually and the owner could acquire the right to use them for a period of time (usually 20, 30 or 50 years), with a title and a maintenance payment. Additionally, timeshare offers its owners the possibility of exchanging their week, both independently and through exchange agencies. to be in one of the thousands of resorts that operate under this scheme around the world.
A «fractional time» is to buy a week, 15 days or a month of a year of a unit, and I say that you don’t really “own a unit, you own the time you use it.” In summary: in condohotels, the accommodation is located within a property so that the owner has a room, but the management of it is from the hotel chain.
The hotel divides the different rooms, which are sold to different owners by a promoter company that assigns the management right to a hotel chain. The price of the rooms does not have to be the same. Normally, this is higher than a rental
normal, but lower than the purchase price of a flat in a condo. The owner of a condo hotel is the full owner and the property is registered in the Property Registry and it is the hotel chain that manages the rooms when the owner does not occupy them.
ADVANTAGES OF OWNING A CONDOHOTEL
The owner can enjoy a holiday residence with all the luxuries that the hotel offers: swimming pool, gym.
The hotel takes care of the community and maintenance expenses.
The condo hotel can be rented, that is, the months that it is not enjoyed can be rented.
In the condo-hotel model, the purchaser is the full owner of his unit (with a property title registered in the Land Court), but the management of this property is transferred to a hotel chain, which in turn offer the same quality. of service for which they are recognized, increasing the profitability of the investor. Logically, this annual return is given after expenses, so the average return on investment is between 3% and in some cases up to 6%. Most of the most successful are those that belong to the most recognized hotel chains in the world.
The concept of aparthotel has always existed in the large European capitals and in the main cities of the United States, especially in Miami, it began in the nineties. It is believed that the idea arose when the hoteliers themselves noticed that, for many guests, due to their frequent and long stays, this was like a second home.
After 9/11, due to the financial recession and hotel operation, many developers took up the concept in which the pre-sale of the condominium was combined with the hotel operation and, once built, the banks financed a condominium and the resources obtained them Individual buyers, minimizing bank risk, making loans to many individual owners, energizing the economy.
From the point of view of architectural design, it has the incorporation of usual hotel areas: swimming pool, gym, spa. restaurants, services, etc. As it is a hotel, these rooms will be furnished, sometimes all with the same furniture and decoration. The location for the success of this type of project is essential, as it depends on the environment and area to ensure attracting investors and buyers.
The reason why this type of construction is increasing is because it offers a format in which hotel chains facilitate the construction of the hotel with the funds of investors, affordable prices for purchasers, for which it becomes a business model in the construction sector that continues to boom, especially in countries like ours where tourism is massive. The problem is that there is still no well-defined legislation in our country for the regulation of this type of property.
From an economic perspective. It seems key, in view of the events that have taken place in the Anglo-Saxon market, to reorient the figure of the condo hotel so that its nature as an investment product gives way to a “paid second home” nature, in such a way as to increase its attractiveness to potential buyers and the obstacle that its low profitability supposes in the current market can be overcome.