SAN FRANCISCO- Kimpton Hotels & Restaurants is jumping into the residential real estate market, adding condominiums to hotel projects starting next year, and planning to build significantly more in the future, according to published reports.
The move comes as Kimpton ratchets up its real estate game, snapping up new land and new mixed-use development opportunities as it embarks on a major growth spurt expected to add 20 to 25 new hotels over the next five years, some with condominiums and some without.
The company hopes its new residential play will put it in a sweet spot of hotel condominiums, somewhere below high-end chains like the Four Seasons and St. Regis, both of which operate condominium-and-hotel projects, but above mid-tier hotel chains like Marriott, which sell timeshares. Such hybrids have become increasingly popular in recent years, both to capitalize on the booming residential real estate market and to provide easier financing for hotel projects.
Kimpton is starting with the first two locations under its new Hotel Palomar flag, in Dallas and Arlington, VA. In Dallas, Kimpton will operate 72 condominiums and luxury penthouses called "The Residences at Hotel Palomar," housed in a nine-story tower with 25,000 square feet of retail. An additional nine-story tower will house the 198-room Hotel Palomar, including spa, swimming pool and restaurant. When the $90 million project opens in April 2006, it will be Kimpton's first mixed-use development. It is owned by a joint venture of Behringer Harvard, an Addison, Texas- based real estate investment trust, and Realty America Group, a Dallas-based real estate brokerage, finance and development firm.

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