When Crescent Heights’ Raffaello Condominium Hotel opened its doors recently, it showed Chicago a new housing option: the hotel condominium, one of the hottest concepts in urban real estate.

Individual hotel rooms are sold to investors who buy the unit and allow the hotel management to rent it out when they’re not using it, sharing the revenue.

A unit can be used as a downtown weekend retreat, as lodging during business trips or as a place for family members or friends to stay. Buyers have the choice weather they wish to place their room into the rental program for general hotel guests.

Owners who join the rental pool help pay for program expenses such as front desk, reservation and housekeeping services. Revenue generated is used to offset the owner’s share of those expenses.

Located at 201 E. Delaware Place, one block from the Magnificent Mile, the John Hancock Center and the Drury Lane Theater, the Raffaello began offering hotel facilities on a limited basis to suite owners and the general public just recently.

Floors nine and above are available to those owners who have purchased a suite, as well as to guests, who wish to stay at the hotel, said Andrew Romanosky, regional operations manager for Crescent Heights. A grand opening is planned early next year, he said.

“As a suite hotel, we offer incredibly high level of attention to service and attention to detail that will set Raffaello apart from the crowd,” he said. “We are busy taking hotel reservations, and suite owners are looking forward to enjoying the use of their suites.”

The historic 17-story building has 175 condominiums hotel suites with prices starting in the $270,000s. The Raffaello is 77 percent sold and the fastest selling condominium hotel in Chicago, Ramanosky said.

He also expects a quick sellout, with just 40 suites remaining.

“As people see the hotel in operation, they will realize the convenience and prestige of owning a suite here,” he said. “At this price point, this is obtainable for a lot of people.”

Crescent Heights’ $20 million renovation is under way and is preserving the building’s classic Mediterranean-style exterior. Jill Rodemyer serves as the hotel’s general manager.

The updated interior has a contemporary look created by award-winning designer Mitchell Freedland.

Four different suite layouts are offered at Raffaello: the traditional double; traditional king; one-bedroom king suite and one-bedroom grand king suite configurations. Four furnished models are on display at the sales center, which highlight two traditional kings, a one-bedroom king and a grand king suite.

Each room has a queen-sized sleeper sofa, dry bar, refrigerator, microwave oven, flat panel televisions in the living room and bedroom, and high-speed internet access, as well as owner’s closet that allows owners to keep their clothing and other belongings in their suite.

Hotel amenities include a lobby with on-site board room and meeting facilities, a soon-to-open restaurant with room service options for suite owners and guests, and a 24-hour doorman with valet parking service, valet/butlers and a professional concierge.

Raffaello also features an outdoor patio and private top floor deck and garden.

“Guests staying at the hotel will see firsthand how beautiful Raffaello is and can make it a regular part of their visits to Chicago,” Romanosky said. Rates begin at about $200 per night.

Guests interested in a stay at Raffaello can call to make reservations at (312) 943-5000 or (800) 983-7870 or visit the Raffaello Hotel Web site at: www.chicagoraffaello.com

For information about purchasing a condo, call (312 601-8610 or visit www.raffaellochicago.com

Crescent Heights, the developer of Raffaello, has been named development first of the year by the National Association of Homebuilders.

The company also has been named national developer of the year for 2006 by the National Association of Homebuilders.