A pair of international investors are in the midst of the largest buy-up of commercial property in the blocks behind the city beach.Acting independently of each other, the two men have spent about $39 million to acquire more than two dozen small hotels, apartment buildings and shops. The change in ownership signals the start of the next wave of redevelopment on the barrier island after the construction of luxury oceanfront hotels such as the W and Ritz Carlton. One of the investors has laid out a sweeping vision of transforming the interior of the island into a bustling area of upscale resorts alongside new restaurants, cafes and boutiques. it’s been 20 years since such a turnover in the streets behind A1A.
Right now sellers are willing to make way for a different kind of beach development for Broward. Once the four and five star hotels are on the beach, the natural movement is westward with higher-end properties This was something the small motels could not do.
“Par Sanda, a hedge fund manager originally from Sweden, has been buying mom-and-pop hotels between Bayshore Drive and the Bonnet House, according to county land records. Other records show Canadian hedge fund manager Michael Wekerle has purchased the historic Escape Hotel and shops in the Sunrise Lane area next to the newly opened B Ocean luxury hotel.
The two men each began their acquisitions a year ago.
They’ve capitalized on real estate prices driven down by the national recession. Small hoteliers have particularly struggled because they’ve been forced to cut prices while paying higher property taxes and insurance bills. Sanda’s purchases have often been for less than what the current hotelier originally paid. Earlier this month, he paid $1.6 million for the Flamingo hotel on Terra mar Street. It last sold in 2005 for $2.5 million . Tropic Rock Resort on Bel Mar Street, had no choice but to sell. The owner has loved the hotel but described the last couple of years as “bloody.” He offered rooms for as low as $56 last summer and had a property tax bill this year of $53,000. He sold Tropi Rock in February to Sanda for $2.8 million, about $100,000 less than he paid in 2002 . “ Just trying to keep our doors open, my wife and I lost a small fortune,”the owner said. “That’s our life savings. We decided if we could sell, we would and cut our losses. Sanda has been piecing together blocks of properties with his purchases. His plans largely follow what the city has wanted to see happen low-rise redevelopment that creates a much more active community. Sanda’s team will launch a hotel expansion in April and say it exemplifies their overall plans. They combined the gay Royal Palms resort that Gray once owned with two nearby hotels, the Monte Carlo and the Three Palms. The new 62-room property is being marketed as the largest luxury gay resort in North America. Sanda undertook a seven-month, multimillion-dollar renovation to create a contemporary European style. Rooms feature white leather furniture, 42-inch flat-screen televisions and rain showers. The expansion includes a bar and grill, three pools, a fitness center and a spa. The other properties will appeal to a mix of travelers, including families and Europeans.
The hotel’s future will be closely watched because it is one of the remaining examples of mid-century modern architecture on the beach. The previous owners pleased historic preservationists by promising to restore the hotel. The Sunrise Lane area where Wekerle has purchased eight properties has long been home to tattoo parlors and T-shirts. The neighborhood is changing as a result of the conversion of the old Holiday Inn at Sunrise Boulevard and S.R. A1A into the B Ocean hotel. Wekerle’s purchases include the old Village Zoo nightclub and the Pink Pussycat Boutique.
