An iconic South Beach resort that came to symbolize the region's real estate boom and bust has found a new owner -- and is now seeking a company to manage operations.
The 409-room Royal Palm Resort Hotel, which has been mired in debt and drama for the past few years, went to California-based Sunstone Hotel Investors via an online foreclosure auction. Sunstone, a real estate investment trust, submitted the $126.1 million high bid and plans a comprehensive renovation at the oceanfront hotel.
Sunstone owns 30 other hotels around the country, including the Hilton Times Square in New York and the Fairmont Newport Beach in California. The Royal Palm is its second Florida acquisition; it also owns the Marriott Renaissance in Orlando.
The Royal Palm ``fits squarely within our target criteria -- excellent real estate, well located within a perennially strong market, with significant upside potential through a full renovation and repositioning program,'' Sunstone president and CEO Art Buser said in a statement. The company has not yet chosen a manager for the Royal Palm.
The hotel at 1545 Collins Ave., which sits on nearly two acres, has gone through a string of owners and legal battles.
In the 1990s, developer R. Donahue Peebles won the deal to open the country's first majority black-owned hotel as part of Miami Beach's efforts to end a tourism boycott. The city helped finance the project, which turned into a teardown and reconstruction rather than renovation of the historic hotel. The new Royal Palm opened in 2002.
Peebles sold most of the hotel in 2005 to investors Guy Mitchell and Robert Falor, who planned a condo-hotel conversion. The conversion plan flopped, as did several other of the duo's planned projects, and the property eventually went into foreclosure.
Mitchell was indicted in May on bank fraud, bribery and conspiracy charges, though the indictment did not mention the Royal Palm.
Hotel investment services firm Jones Lang LaSalle Hotels was retained by the court-appointed receiver as the agent for the Royal Palm's foreclosure sale.
Interest in the beachfront hotel was high, and more than 60 potential buyers had toured it since May, said Gregory Rumpel, executive vice president for Jones Lang LaSalle Hotels.
The purchase is ``a tremendous opportunity,'' Rumpel said, but warned that renovations would ``take a lot of money and time.''
Sunstone previously bought some of the hotel's debt at a discount. The company expects renovations to take about two years to complete, it said in a release. The company did not say how much it expected to invest in renovations.
News of the Royal Palm's fate follows the sale of another distressed property on the beach earlier this summer. Marriott bought the Seville Beach Hotel in a $57.5 million short sale with plans to renovate and reopen it under the Edition brand, a partnership with celebrity hotelier Ian Schrager.
Commercial real estate attorney Jim Soble said he expected to see more hotels follow suit in the near future.
``I think there's a number of hotels that may have been purchased in the last 3-5 years and financed at numbers that don't make economic sense today,'' he said. ``It's a question as to when the the owners of the hotels or the holders of the financing of these properties make an election to put them on the market.''
Source: http://www.miamiherald.com/2010/08/18/1780534/royal-palm-sold-at-auction.html
BY HANNAH SAMPSON
hsampson@MiamiHerald.com
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
No comments:
Post a Comment