The oceanfront Miami Beach hotel charging $1,700 a night debuted five years ago with plans to sell two towers of condo-hotel units. That changed last year when management decided to run one tower as a vacation club -- a cross between a country club and a time-share resort -- with management going so far as to buy back condo-hotel contracts from buyers.
But that idea didn't last long. In August, the Setai dramatically scaled back plans for its club and decided to put most of the second tower's 88 rooms back on the market as condo-hotel units.
Once again, the idea didn't stick. Setai partner Michael Breene revealed in a recent interview that the owners had halted condo-hotel sales in order to run the second tower as a traditional hotel. He said sales were strong enough to continue but that room rates had exceeded expectations.
''Lehman Brothers never thought we would get the rates we are getting,'' he said of the hotel's main lender. ``They've decided the hotel business is not so bad after all.''
But Mark Zilbert, a condo broker who sold units at the Setai, said some buyers were reluctant to put down $1 million for a hotel room where the maintenance and management fees can hit $6,000 a month.
Even so, Zilbert said he breaks even with the unit he bought there. ''I get a check each month,'' he said.
-- DOUGLAS HANKS III
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