About Daytona Beach's Ocean Jewels Club

I have not visited Ocean Jewels Club since January this year. Today I have received the e-mail from the hotel manager, Tim Oliver, and I stopped at Ocean Jewels Club, Daytona Beach Condo-hotel, on my way to the office.

First pleasant surprise, the Lobby is open and I was greeted by a gentleman at the Front Desk. I introduced myself. That’s how I met Tim. Tim Oliver, a hotel manager.

The new company bought the commercial space, which includes Front Desk. They started there in May, and started from scratch. There was no rental management for awhile, and now it is extremely difficult to bring it back. From practically 0 they grew the number to 20, and plan to increase this number very significantly.

Hotel business is tough, and requires street smartness plus knowledge and experience, especially when you are talking about the resort with 198 rooms (according to Tim, my records show 201 guest room). Tim is not an hotelier by trade, and this is an endeavor for him. I think, he has a pretty good understanding where they are and how to move forward. And first and foremost they have to earn back the trust of the owners. Not an easy job.

I was getting a good feeling talking to Tim. He is open and understanding, and is not trying to sell himself. I would love to see him and the company succeed, I sure think that Oceans Jewels Club deserves getting back on track and becoming what it was just 5-6 years ago: a nice condo-hotel on the beautiful white sandy beach. The resort where guests come year after year.

Good luck, Tim Oliver

P.S. There are 20 units for sale on MLS in Oceans Jewel Club. Starting price is $42,000 and all the way to $155,000. However, if you look at units sold since the beginning of the year, there were 5 units sold from $25,000 and to $68,000.

If you are looking for units in Oceans Jewels Club or in any other condo-hotel or residential condos, call me at 386-405-4408.

What to know and what to expect when buying a condo unit in Ocean Jewels Club-A Daytona Beach Condo-Hotel.

A couple of days ago, I have received an e-mail:

"Hi Jon,

I am planning to buy a condo/hotel in Daytona Beach. I just found Ocean Jewels Club for 24K. What do you think about this one?"

If I had to answer in one sentence, I would say that I do not recommend Ocean Jewels Club at this time. Too much uncertainty ahead. But the blog allows me to go beyond just one sentence, so here is the reason for that short answer.

This 201-room condo-hotel in Daytona Beach, built in 1975, has a problem with the rental Management company. They used to have a pretty good company run by Roger Mahood, and a lot of owners still regret that he sold the management company and the space on the first and second floor that belonged to him, to a new owner.

The new owner was not a hotelier, but, as it so often happens, thought that there is no problem running a 201-room resort right on the beach. Isn't it just fun? Turned out there was something besides fun, and this part was not going well. It actually was going worse and worse.

I knew things were not good for the owner of the commercial space, and I visited him a few times. I tried to have him sell the space and the company to a seasoned hotel operator, but they already collateralized the property over and over, and could not accept anything less that what nobody would offer them in that market.

Meanwhile, there were fewer and fewer units on rental with the Front desk, as they did not pay the owners on time, and finally they simply closed the doors owning owners money. There was a note on the door saying that the front desk was closed until further notice.

That further notice has not yet come.

The Association, which is managed by All Florida Realty, would love to buy the commercial space, but there is no money to do it. The defaulted owner owns too much money between the mortgage and private loans. The property went into foreclosure, and last week finally it was foreclosed. The lender/s got it back, and so far nobody contacted the Association, so they do not know what is going to happen with the property.

Meanwhile, the Front Desk is closed and owners wither keep units for their own benefit, or rent themselves or other companies. Some a re even happy, as outside companies charge not 50% of each dollar made on rentals, but 20 or 25%.

Good deal?

Not so fast. In the long run it could probably be a very bad deal. The idea of the property rented by various Realtors, or owners is detrimental to the property. Ideally the owners are interested to have the Front desk as their eyes and ears 24 hours. Outside agents and companies are only doing Internet advertising and cleaning the units and preparing them for the next guest. They are not there and they have no clue what is happening to the resort. Maintenance for the association is not the equivalent for a good rental management. They are not there 24-hours, and their functions are different.

This is a rather unfortunate situation for the owners, even if they do not yet understand it. Buying there today makes it tricky even at $24K. Would you want to lose even $24K?

Condo-hotels are not the most stable properties on the market, and maybe the champions of the opposite, so if $25K is not a problem and you would not really noticed losing it, then it is one thing. If you, however, are counting your money, and think that this is a good deal because it is so inexpensive, then be careful. It may turn more expensive in the long run.

By contrast, the Association is doing OK. They have completed the repairs of their south Tower (6-story building) for which they had an assessment. They are trying to keep the rest of the proeprty in decent shape to avoid the assessment, and at this time nothing is planned or discussed (according to the Association Manager). It does not mean that there will ne no assessments in the future, but the condition of the market is that the longer they can hold, the better chance is to have the assessment at better time, when the tourists (and the money) are coming.

But if all you want is a place on the ocean in Daytona Beach in Ocean Jewels Club, and you can't care less about rentals, go for it. It is fine as long as you know the story.

If you are looking for condo-hotes or condos in Daytona Beach Area, call me 386-405-4408 or e-mail me.

Added July 27, 2010:

Since May of this year there is a new management company in Ocean Jewels. They are now operating Front Desk, and life is coming back to Ocean Jewels. We hope it is a good sign.

Ocean Jewels Resort, a Daytona Beach Oceanfront Condo-Hotel is not the same jewel it used to be just 10 years ago, when it was converted to condo-hotel.

Reviews on Trip Advisor range from "The Jewel is a Jewel" to "Horrible, unprofessional,filthy, not fit for pigs!!!!", which is not really surprising. It is often not about the hotel/condo-hotel, it is about the expectations, and we are used to see guests making reservations for less than $50 a nights and expecting the service of Ritz Carlton. We are used to people walking in our office in the Fountain Beach Resort, also a condo-hotel, after seeing a sign offering a condo for $50K, and I love when they say that they need a 2 bdr/2 bath oceanfront. Yes, for $50K. No, a stufio with oceanview is not gonna cut it...

"Ocean Jewels Resort is located directly on the oceanfront with 400 feet of beach. Individually appointed condo/hotel units are complimented with a fully equipped kitchen. Two oceanfront pools (1 heated seasonal) and a kiddie pool. Picnic tables and Bar-B-Que grills on the promenade and a grassy play area for the youngsters. *Exercise Room *Guest Laundry *Guest Vending *Group Meeting Facilities *Complimentary Guest Parking *Fax & Copy Service *Night Security *Front Desk Hours of Operation: 7am to 11pm Daily *Emergency After Hours Telephone Number: (386)290-0699"

You can still read it if you 'Google Ocean Jewels Resort', but if you are in Daytona and try to walk in, you will find the front door closed and a hand written sign saying that Front Desk is closed until further notice. It is already a couple of months since the management company, who owns the commercial space, simply walked away. That was the end of a story, which started quite promising...

Ocean Jewels Resort was not the first condo-hotel conversion in Daytona, but it sure was one of the nicest when it was converted. Small but clean and nice rooms, equipped with 2 burner stoves, many rooms with a view of the ocean, 400' of premium beachfront real estate, good management company, who owned the commercial space. Occupancy was good, service and maintenance were good. Maintenance fees were low. A lot of happy owners still remember those times.

About 5 years ago the owner sold the management company and the commercial space. The new owner, who had no hotel experience whatsoever, thought that this would be half vacation and easy work. The owner was not a great manager. You could see him serving at the Tiki Bar, leaving the operations to a hired GM.

Increasingly unhappy owners started taking their units off the rental program. It became inevitable that the business was running into the ground. Eventually, there were not enough rooms in the rental pool to sustain the operations, and the management company stopped paying owners their part of the rental income. And then they closed the doors.

Association is hurting. They can't foreclose on the property (they are owed Association fees for quite some time), but to foreclose on this property, they would have to pay off existing mortgages, and I heard that there were several of them. The Lender finally filed the foreclosure, but it happened just few days ago, and this could take 6 to 12 months. Meanwhile owners are left with the choice wither to enjoy it themselves, or rent themselves, or through other rental management companies.

Meanwhile, the association manager, a nice and friendly Marisa Rains, said that the association is OK and there are no Special Assessments being discussed at this time. So, sales theoretically should not be affected, but in reality they sure will. Condo-hotels attract usually those who wants to rent the unit when not using themselves. And it makes a lot of sense. If you do not plan to rent, do not buy a condo-hotel, but a residential condo.

The story started with a glory, and ended in ... Actually, it has not ended yet.

If you are thinking of buying (or selling) a condo or condo-hotel in Daytona Beach area, or want us to rent your unit in Ocean Jewels Resort, call me, Jon Zolsky, at 386-405-4408, or e-mail

Added Sept. 8, 2010. There is a new rental management company and I wrote about it. Check here.

Oceans Jewel Club at 935 S. Atlantic Avenue was converted to condo-hotel in late 90s. This was the beginning of the condo-hotel era, units were nice, though small, but with stoves. Some with view, some direct oceanfront, and some with no view of the ocean.

Commercial space including Front Desk belonged to a management company, who were running rentals and were packing the property whenever tourist were coming to Daytona. Not a glitzy property and not a snobbish place, but simple and inexpensive.

The property flies Travelodge flag.

About 3 years ago, the management company changed hands. The new owner was not a particular hotelier, but a butcher from New Jersey, who was looking for a partial retirement.

Really, what can be easier than running a hotel operation?

The new owner could still have a chance of surviving if he kept the GM, an aggressive and effective guy, who was doing very well there, but the new owner may not understand it and let the manager go. Things were going downward since then. Service was not the best, actually, nothing was the best. Money was getting tighter, condo owners were more and more frustrated, I heard that management was slow to send owners the checks, so they started opting out of the rental program, which is not mandatory. Fewer units, less money, so the management started a vicious circle.

The new owner raised some money, but it was spent, and business did not improve. The general fallout in the economy also did not help. It was obvious that they were drowning, but when I came to them with a bailout offer from my client, they laughed at me. They wanted double the money.

Then I heard that the company's commercial space is in foreclosure, and, finally, when passing by yesterday, I saw a note on the door. It said that the Front Desk was closed. A maintenance guy was in the lobby telling peple that rentals were stopped, and he could not provide any more information. He gave me the number for the Association Manager, and I called her later.

The association's hands are tied. The commercial property still belongs to the same guy, the foreclosure is in the works, but until the property is foreclosed, chances that there will be rentals are slim to none. What an unpleasant surprise to the owners, who expect that the units are rented when they are not here, and help them to offset the expenses.

Not now, not in Oceans Jewel.

There are 25 units for sale in Oceans Jewels. Starting from $45K and all the way to $165 for direct oceanfront. And even though you can actually claim it as your primary residence, and homestead it, I would be hard pressed to suggest it as a viable investment.

Not now, not in Oceans Jewel.

Jon Zolsky, your Daytona, Florida condo-hotel guru
www.DaytonaCondoHotel.com

Oceans Jewels Club

935 South Atlantic Ave., Daytona Beach, FL 32118

150-room oceanfront condo-hotel was built in the 70s. Operates under Travelodge flag. Three years ago the management company was sold. New management company is not enjoying high occupancy, and in a dwindling Daytona economy is affecting the performance of the resort.

Recently one of the buildings underwent the upgrading.

There are 2 Pools(1 heated) plus a Kiddie Pool. Fitness Center, Oceanfront BBQ Grill and Picnic Tables. Complimentary wireless access is available in the lobby.

This hotel does not rent to area locals. No pets policy. No RV/Trailer/Semi parking available.

Presently 39 units for sale from $49,900 for a studio with no vew to $179,500 for a one-bdr unit. The mere number of units for sale is indicative of slow performance. Especially if you notice that there were only 2 units sold since January 1, 2008. One for $39,000 for a studio and a one bdr unit for $85,000.