Seized Florida Hotel-Condo Complex Offered
Lender Credit Suisse is shopping the luxury Gansevoort Hotel and condominium complex in the trendy South Beach section of Miami Beach.
The oceanfront property — a total of 589 units being marketed as a package — could attract bids of roughly $350 million. That would be a 13% discount to the property’s $403 million debt load when Credit Suisse foreclosed last year. Jones Lang LaSalle Hotels has the listing.
The offering comes at a time when buyers are clamoring for hotels in the high-end South Beach market, which held up well during the recession and has since seen growth in occupancy and revenues.
The F-shaped, 18-story structure consists of the 334-room hotel and 259 residential condos. Only four of the condos have been sold. The other 255, which are vacant, are included in the offering. There is also 63,000 square feet of retail space, occupied by restaurants Philippe and STK and a David Barton Gym and Spa, as well as three pools, a 55,000-sf beach club and a rooftop bar.
The property, a hot spot for visiting celebrities, was constructed in 1970 as an apartment complex and later converted into a 593-unit full-service hotel. From 2005 to 2007, a partnership involving William Achenbaum redeveloped the property into a mix of hotel rooms and condos. Although the hotel performed well during the recession, the project was dragged down by the dismal condominium-sales market.
A buyer could rent the condos and try to sell them off as the market recovers, or could convert them into “fractional ownership” units, under which partial stakes in individual rooms are sold for use for a specified amount of time each year.
The hotel, at 2377 Collins Avenue, is available unencumbered by brand or management, and a buyer would have to change the name. Performance data were unavailable, but luxury hotels in Miami Beach had a 77.9% average occupancy rate during the first four months of the year, up from 70.3% a year earlier, according to Smith Travel Research. Room rates are up almost 2%, to $413.02/room. That has given revenue per room a 13% boost over the year before.
Credit Suisse seized the property after the borrower, Achenbaum’s Gansevoort Hotel Group of New York, defaulted on an $89 million mezzanine loan. A $314 million senior mortgage from two unidentified lenders remains in place. It’s unclear if a buyer would be able to assume that loan upon the property’s sale.