Regent’s Out, Hilton’s In, and What’s Up with The Gansevoort?

Regent South Beach rendering

According to the Miami Herald, the Regent Hotel has left as operator of the new hotel at 1458 Ocean Drive in South Beach.  The new hotel operator is Vincci, a Spain-based hotel chain.  The 80–unit property opened nine months ago were sold as condominium hotels.

If I were a owner of a unit, I would be pretty annoyed.  That is one of the risks of buying a condo-hotel unit.  It would be like the equivalent of buying a unit at The Ritz Carlton and ending up with a Super 8 operator, or worse yet, a Nicky O!

Bentley Beach

Speaking of Nicky O’Hilton

The Bentley Beach, a 109–room condo-hotel located at 101 Ocean Drive in South Beach, will become a Hilton next week.  The Hilton was famous for operating The Fontainebleau Hotel on Collins Avenue up until 2005.  Since 2005 Hilton has not operated a hotel on Miami Beach.

Paradiso Condo

What’s Up With Paradiso Condos/Gansevoort Hotel?

It seems that the Chetrit Group, L.L.C., has sold the project to the owners of the Gansevoort Hotel in NYC.  Gansevoort Hotel owners, William and Michael Achenbaum, were originally tapped to be the hotel operator for the South Beach project.

A source has informed me that a mortgage was recorded on the property, by CSFB, earlier this summer for $370M.  Calls to the sales office have confirmed that Chetrit Group, L.L.C. is no longer the developer. Closings of Paradiso condominiums are scheduled to begin in October while the Gansevoort Hotel is slated for opening in November. 

Michael Achenbaum tried unsuccessfully to take over the Royal Palm Crowne Plaza Resort in 2004.

Gansevoort Hotel, Paradiso South Beach, Miami Beach condo-hotels

  • JS

    This happened back in May

    http://la.curbed.com/archives/2007/05/no_gansevoort_f.php

    but I think the mortgage is half that amount according to Dade county records.

    Project looks OK – the internal finish of the condos is pretty average, the lobby looks like – so all will depend on how the “hotel” areas look for the condo owners. Still if you rent your unit out, your renters cant use the gym, beach club or rooftop pool, so it’s all a bit of a con.

  • http://www.kevintomlinson.com Kevin Tomlinson

    LOL. We will see. The mortgage amount may include monies for the completion of the construction as well. I know Chetrit originally bought the property in foreclosure for around $150M. I definetely know that the total amount was $370M.

    Thanks for commenting.

  • http://www.table8restaurants.com Josh Woodward

    Just a comment on the turn over of Regent South Beach to Vincci Hoteles. Quite contrary to unit owners being upset about the change, they should be thrilled. As the owner of Table 8 Restaurant, I was the catalyst for the change in management and brought Vincci in because I was convinced they would achieve a higher occupancy than Regent and were a much bettter fit as a hotel partner for us. Vincci is a hip group whose Spanish background will be much more in-line with a South Beach mentality than the Regent brand. All that will matter to unit owners is that they are seeing a higher return from the higher occupancies. Vincci will maintain the high standards that Table 8 is now known for in the market and the two brands will compliment one another wonderfully.

  • http://www.kevintomlinson.com Kevin Tomlinson

    Josh,
    Thanks for your comment. Even though Miami Beach has primarily european clientele, I’m wondering how many unit owners would have purchased knowing with the original operator being Vincci.

    Whether you agree or not, being in real estate before the big luxury boom, I know that it would be a much harder sell as the Vincci brand is not well known here.

    I hope this change is positive for the owners. I wish you continued success.

  • http://www.table8restaurants.com Josh Woodward

    I agree with you that it would have been a tough sell at the time, but I know that now they will do better with Vincci’s involvement. As long as Vincci keeps the room rates up and increases the occupancy, oweners will be happy. But I absolutely hear ya about what a tough sell it would have been!

  • John Kalendek

    Kevin,

    As one of the condo owners of the former regent now vincci, I want to thank you for your comments. I would have never paid the kind of money I paid for a vincci room. What is real upsetting, it was never disclosed during the buying process that i would be in partnership with the developer. I assumed i was partners with the hotel company. Branding is important, now i have a $300 room unit with no brand. I could of purchased two units at the strand for my money if i wanted that. I own one unit at the strand, it is completely different, we have a condo association that isn’t a dictatorship. I think we both know what happened, the developer was losing money, so he brings in another hotel company that will pay off his debts! You don’t fire a hotel company in less then one year. I was happy with my unit, although i have heard the penthouses weren’t renting out that much. I am sure if they were given the opportunity, the regent could of slashed room rates and improved occupancy. If he was looking out for the people that trusted him in purchasing the units, he should of got us at least an extra ten per cent payout, obviously he wasn’t! To answer Josh Woodwards statement about room rates, room rates have dropped 30% since the change. Obviously, regent occupancy would have improved if they dropped rates 30%, but then again, my compensation is based on room revenue, not occupancy. I now own a no name brand, and receive the same percentage payout of a 30% less daily room rate. I honestly don’t know how the developer sleeps at night

  • http://www.kevintomlinson.com Kevin Tomlinson

    John,
    Wow! Thanks for commenting. That seems one of the pitfalls of buying branded condo-hotels. Acqualina just did the same thing. Rosewood was a quality operator but Trump thinks he doesn’t need the Rosewood. I feel bad for owners who get caught up in this type of problem.

    For others out there considering purchasing a condo-hotel: read your condo docs and understand the managment agreement that the developer has with the operator!

  • Gene Grabarnick

    Kevin, over 70% of the condo owners purchased there unit before a hotel operator was ever selected. They based there decision on the outstanding building design,location and fabulous room designs along with the fine finishes. The condo has many unique features such as having entrances on both Ocean Dr and Collins ave, glass bottom pool, all suits have at least a 200 sq/ft balcony and there are 27 private roof top gardens that have hot tubs and wet bars with automatic shading systems,9 other units with extra large verandas with hot tubs, under ground parking and much more. There are many reasons why owners purchased, some purchased to come and enjoy south beach as there condo ownership has know limits on how many times an owner can use it. I am very surprised by the statements made by the owner above as many are just not truthful in many areas, if he would like to discuss them with me I am always available to our owners as he knows. Vincci started managing the hotel only 45 days ago, occupancy has increased each week to were the hotel was 100% booked last weekend for the first time, rates will definitely increase along with demand and season as this is the best hotel on Ocean Dr. Vincci is a very fine company with a great deal of expertise, they operate over 35 boutique 4 and 5 star hotels world wide and understands how to market and provide quality service to it’s hotel guests. there are many reasons why a management changes was needed and it wasn’t as easy as allowing them more time.A rose is still a rose no matter what you call it.The hotel is still the best hotel with the best restaurant(Table-8) on Ocean Dr. we look forward to a long and profitable future for all of the condo owners, Vincci and the developer. Gene Grabarnick

  • http://www.kevintomlinson.com Kevin Tomlinson

    Gene,

    Thanks for stopping in. I’m a nice guy and am not here to make anyones life miserable, though I do find this very interesting.

    I have a couple of questions and if they are none of my business, feel free to let me know.

    1. Why did you select Regent as your operator?
    2. Regent knew that the hotel was a trendy/chic/urban neighborhood–it wouldn’t seem to me that this property would be a good fit for its brand. Why would they take it on–knowing that it would probably not be a good match.
    3. I’ve heard rumors of Regent bowing out of the property in Bal Harbour, have you?
    4. Hilton/Conrad would be a better fit, in my humble opinion than Vincci, no?
    5. Chosing a flag/operator is more about hooking into their reservation system. Conrad would be PERFECT.

    In any case, I wish everyone good luck!

  • Gene Grabarnick

    kevin, when we first purchased the property we hired Price Waterhouse to help determine what the highest and best use of the property was, There study said hotel. They were then hired to do the accounting to be able to show to there hotel management clients, which are world wide. After many months of interviewing different hotel management companies we selected Kempton hotels who would operate the hotel under the name DeSoleil South Beach, as they are a unique boutique operator. During the year long negotations we were introduced to Carlson Hotels inc. a very fine and experance company who is the owner of the Regent brand and who wanted to open it’s 1st hotel in the U.S.and was looking for a long time to open a 1st class hotel on south beach. They could not find a hotel that met there high standards, they offered to brand the hotel a Regent if we would build it to there requirements with the design and all of the fine finishes, hence The Regent South Beach.
    I believe that should answer your 1&2 questions, as for 3. I have know idea.
    4. As I said above ,we reviewed all of the management companies including Conrad/Hilton who would have love to manage this hotel, but we felt it did not bring the high end boutique operation that we wanted. A lot is to be said about a good reservation system but more is to be said about good solid marketing and highend service, and most important having skin in the deal.
    I hope I have answnered most of your questions, if you would like, call me, we can have lunch at Table 8 and I can show you our hotel and discuss this futher. gg

  • Lorenzo

    Kevin;

    Turns out this ex-Regent, ex-Vincci property is now being operated as DeSoleil South Beach. I wonder what happened with the Vincci affiliation. Any word? How’s the property doing?

  • http://www.krepostkmv.ru/ Mella

    Love the advice. Thank you. :)

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