Foreclosed 144-Unit Lake Cecile
Resort Sells for $4.7M
By Alex Finkelstein
Last updated: Jan 8,
2003 11:49AM
ORLANDO-REH Capital Partners LLC is starting
the new year with a strategic hospitality acquisition. The Fort
Lauderdale, FL-based investor group purchased the 10-acre Lake
Cecile Suites and Resort, a 15-year-old, 144-unit, foreclosed-on
property from an undisclosed Arizona-based lender for $4.7 million
or about $32,639 per unit. The building is located minutes from Walt
Disney World and Universal Orlando at State Road 535 and U.S. 192,
one of the most active commercial development hubs in Central
Florida.
The price "represents a deep discount from pre-9-11 marketing
pricing and is about a 60% discount to full replacement cost," REH
chairman Frank Nardozza says in a prepared statement. Occupancy at
closing was 94%.
Nardozza's observation is borne out by Orlando area construction
industry estimators who tell GlobeSt.com on condition of anonymity
that hard construction costs of new hotels range from $100,000 to
$200,000-plus per unit. The resort was initially developed in 1987
as a Marriott Residence Inn.
REH acted as principal in the deal through a private consortium
comprised of Miami-based investors Ezra Katz of Aztec Leisure Corp.
and Enrique Dillon of Lake Cecile Hotel Investors LLC. The group is
investing another $1.6 million to renovate the property and have it
ready in April for affiliation with Choice International Hotels as a
MainStay Suites Resort. Kelco Management and Development of Westin,
FL will operate the property.
"With this acquisition, we believe we have found a tarnished gem
whose luster we believe we can readily restore," says Nardozza, a
former national hospitality practice leader for KPMG Consulting.
REH and its partners snared the property at a below-replacement
cost by locking in the price in March 2002. The price was based on
the property's immediate post 9-11 performance. "We patiently waited
and worked through many issues with the seller to finally reach the
finish line," Nardozza says.
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