The Bella Vista

The Bella Vista Suites in Lake Geneva didn’t begin life with that name. In 1999 the building was built under the auspices of “The Meridien”, and the property operated under that name for the first couple years of its existence. As I recall, the name change was forced by an intervention from Le Meridien in Chicago, though I’m not entirely sure if that’s the truth or just the truth as I remember it. A strange, but curious, item of note- the Bella Vista, as the properties are now marketed and the hotel is obviously named, should actually still be termed “Meridien” as it pertains to the residential real estate therein. See, the hotel name was changed, but the declaration and legal descriptions were not. So unit 120 in the Bella Vista is really still unit 120 in the Meridien, but for some reason no one except me understands that. Regardless, the Bella Vista is now called the Bella Vista, and the Bella Vista doesn’t really care what you call it these days as long as you call it something. Please, call it.

You see, the Bella Vista has fallen upon some hard times of late. By hard times, I mean miserable, loathful times, and by of late, I mean since September 28th of 2007. That was the date when the last unit changed hands here, a simple one bedroom park view condo overlooking anything but the lake, with a closed price of $115k. But I’m getting ahead of myself. The Bella Vista is a 39 room all suite hotel on the lakefront in downtown Lake Geneva. It’s a pretty building, though the lights at night are a bit much, and the Spanish tile roof is more befitting Alta Vista than a downtown hotel in a Midwestern city. The building is a condo-tel; a hybrid that combines privately owned condominium units with the on-site rent generator that is a hotel. When this building was built in 1999 the concept was new. The concept was exciting. The concept appeared to work, and life was good at the Meridien- err, the Bella Vista.

Units originally sold for strong prices, and ultimately, within just a couple years, those prices were on the decline. It wasn’t uncommon for an owner who purchased a two bedroom unit in 1999 for $289k to sell that unit for $260k in 2003. These were not the strongest of investments. Even so, as real estate prices escalated during the 2000s the Bella Vista had some market share, and I was behind much of the selling. From 2002 through 2006 I sold quite a few units in the Bella Vista, where two bedroom units were selling in the mid $200k’s, then the mid $300k’s, and ultimately the extra fancy and equally spacious penthouse unit sold for $534,300 (not my sale). I sold these units to people who wanted a lakefront condominium but wanted to offset the ownership expenses with the added benefit of room revenue. The concept worked, until of course, it didn’t. During the meltdown of 2007 that has lasted to this day, buyers have largely shunned condo-tel style ownership primarily due to their lack of liquidity on the resale market and weak returns that rarely live up to the projections.

The last MLS transfer of a Bella Vista was the sale I mentioned earlier in September of 2007. Another condo-tel property, The Abbey Resort (converted to one obviously, not originally built as one) has also experienced a painful down turn in sales, with the last MLS recorded sale of a unit there dating back to August of 2007. It might be sunny and 85 in Lake Geneva today, but the Bella Vista is not happy.

It’s not that the building isn’t nice. It is. Nor is it that the units aren’t beautiful. They are. And the views are incredible and the location ideal. It’s not the hotel that is struggling, it’s the owners that are unable to sell their units due to a change in popularity of this style of hybrid ownership. There are currently eight units available on the market as of today, priced from the low $100k’s to the low $300k’s. The trouble doesn’t end with the lack of liquidity here, as I saw a couple of pending foreclosures percolating here when I last checked Lis Pendens filings yesterday. Foreclosures could really impact this building- not by decreasing interest, because to be frank, there isn’t much to begin with- but by lowering the already lowered prices to teeth-gnashing levels. If a bank takes ownership of a unit here, the price required to attract buyer interest is going to be painfully low.

I’ve had several thoughts of late that the Bella Vista should be taken private. I should broker a deal to sell the 39 unit property to a hotelier, and work a buy out number with the 39 owners. If you know anyone who feels like buying a boutique hotel that should be the premier hotel in all of Lake Geneva, just let me know. Who knows if the idea could ever fly, but it might be worth a discussion. For now, I’d probably take a very weary look at the Bella Vista. The numbers might make some sense from a return standpoint, particularly as money markets and cash accounts struggle to return even one half of one percent in annual interest, but I’d still crunch the numbers awfully hard here. If you’re looking for a hotel to stay at for a Lake Geneva weekend, this property is absolutely perfect. With huge lake views, clean rooms, and a downtown location that is easily walkable to shops and restaurants, this is the best lakefront accommodation available in all of the Lake Geneva area. In fact, if you feel like coming up to look at some Lake Geneva vacation homes in the next couple weeks, just ask and I’ll gladly put you up in the Bella Vista, my treat. Then you can be the judge. See you at the lake.