exceptional opportunity to acquire fee-simple interest in a beachside hotel with brand flexibility

Transcription

1 Lido Beach, FL exceptional opportunity to acquire fee-simple interest in a beachside hotel with brand flexibility OFFERING SUMMARY

2 investment overview Holliday Fenoglio Fowler, L.P. ( HFF ) is pleased to offer, on an exclusive basis, the opportunity to acquire the fee-simple interest in the Holiday Inn Sarasota-Lido Beach (the Hotel or the Property ). The 135-key, interior-corridor Hotel offers 300 linear feet of beachside frontage along Benjamin Franklin Drive on Lido Key, which is wedged between world-renowned beaches of Siesta Key and Longboat Key in Sarasota County, Florida. Additionally, the Hotel is just moments from St. Armand s Circle shops, minutes from Downtown Sarasota, and six miles from the Sarasota-Bradenton International Airport. In Q1 2016, current ownership completed an extensive $6.1 million ($45,000 per key) renovation, which upgraded the entire Property. The Hotel is encumbered with a management contract (10 years remaining) with Ocean Properties, a preeminent Florida lodging operator. While the Hotel is currently encumbered by the Holiday Inn brand, expiring in 2024, there remains the potential to either explore alternative branding options or negotiate an extension with IHG. PROPERTY SUMMARY ADDRESS: 233 Benjamin Franklin Drive, Sarasota, FL YEAR BUILT/ RENOVATED: GUEST ROOMS: 135 MEETING SPACE: FOOD & BEVERAGE: AMENITIES: 1970 / ,000 SF (Indoor) and 3,000 SF (Outdoor) Sand Dollar Dining Room Kokonuts Lounge & Tiki Bar Business Center Fitness Center Complimentary beach towels Outdoor Pool 2 Lido Beach, FL

3 holiday inn lido beach offering summary investment highlights Irreplaceable Beachside Location The Property boasts 300 feet of frontage along Ben Franklin Drive, directly across the street from Lido Key Beach with permanent, unobstructed views of the Gulf of Mexico. The Hotel is situated in an extremely high-barrier-to-entry, coveted location due to a dearth of developable land on Lido Key. Lido Key Beach is less than a mile and a half north of Siesta Key Beach, which was ranked as the #5 Best Beach in the World by TripAdvisor in The Property s location is complemented by upscale retail shops at St. Armand s Circle, just a quarter mile away. Recently Renovated with Minimal Capital Requirements A new owner will step into a brand new asset with minimal capital requirements. Beginning in 2013, the Property underwent a $6.1 million ($45,000 per key) renovation completed in Q1 2016, which upgraded the entire property. The Property s excellent physical quality today is comparable to boutique, beachside hotels across the greater Tampa and Sarasota-Bradenton markets. Strong In-Place Cash Flows with Tangible Upside The Hotel s cash flows have quickly ramped following the completion of the renovation. Net operating income grew 27.4% from 2015 to 2016 and is on track to increase an additional 50.8% through year-end The reforecasted 2017 NOI demonstrates a recovery back to the previous high watermark of pre-renovation With a newly renovated property, a new owner should be able to continue this strong performance and push cash flow to never before seen levels. Thriving Lodging Market The Hotel is located on Lido Key, part of the greater Sarasota-Bradenton lodging market, which experienced a RevPAR compound annual growth rate of 8.7% between 2011 and While there is some new supply in the Sarasota area, it is virtually all in the CBD. Beachfront real estate is more insulated from this new supply. Despite the new supply, the overall market continues to perform well. Preeminent Management Company The Hotel is offered encumbered by a management agreement with Ocean Properties, ending in July Ocean Properties is a privately held operating and development group headquartered in Delray Beach, FL with a portfolio of 67 hotels, including 41 in Florida. Ocean has strong relationships with major brands such as IHG, Marriott, and Hilton as a best-in-class operator in FL, as well as experience operating independent, boutique properties under their proprietary Opal Collection. Ocean has created tremendous value for the Hotel during the current ownership tenure and will continue to enhance performance during the remainder of the management agreement term. 3

4 investment highlights Dominant Brand and Distribution System Holiday Inn is a full-service hotel chain within the InterContinental Hotels Group (IHG) family of brands. IHG is one of the world s leading hotel companies, located in nearly 100 countries and territories across the globe. Holiday Inn hotels are known for comfort, value, and dependability. As the world s most recognized hotel brand with over 1,200 locations, Holiday Inn hotels host 100 million guests annually, thereby proving the popularity of the brand. In fact, 9 out of 10 travelers have stayed at a Holiday Inn hotel globally, more than any other hotel brand. The brand has exceptionally strong recognition among Latin American and European tourists, one of the fastest-growing segments of travelers visiting Florida. Pricing Expectations Supported by High per Key Comparable Sales The Gulf Coast of Florida, Hillsborough and Sarasota Counties in particular, has experienced robust performance due to extremely high barriers to entry, making it a highly coveted market to invest in. As show in the chart below, there have been several comparable, high-priced trades of beachside assets in recent years. SALES COMPARABLES Property Name City Date Keys Year Built Sale Price Price/Key DON CESAR BEACH RESORT St. Pete Beach Feb ,830, ,125 BEACH HOUSE SUITES BY DON CESAR St. Pete Beach Feb ,863, ,619 SIRATA BEACH RESORT 1 St. Petersburg Jan ,000, ,193 BLUE WATERS BEACH CLUB Holmes Beach Dec ,500, ,452 THE KIMPTON HOTEL ZAMORA 2 St. Pete Beach Dec ,525, ,500 HYATT REGENCY CLEARWATER BEACH 3 Clearwater Beach Feb ,500, ,000 HOLIDAY INN SANIBEL ISLAND Sanibel Dec ,000, ,510 WEIGHTED AVERAGE PRICE PER KEY: $416, Expected to spend north of $20,000 per key in capital improvements. 2. Not beachfront 3. On a ground lease with less than 65 years remaining. Expected to spend $20,000-$30,000 per key. 4 Source: Real Capital Analytics & HFF Research

5 holiday inn lido beach offering summary value enhancements Potential Branding Optionality The Seller has offered to sell the Property either encumbered of the Holiday Inn brand or or delivered as an independent hotel to allow an investor to explore repositioning strategies. Although Holiday Inn contributed a significant portion of the Property s guestroom demand in 2016, the Hotel represents the only non-boutique product on Lido Key, thus bringing into question the necessity of the system, especially with the already established connection to a major operator s reservation tools. An investor is afforded the opportunity to choose between retaining the Holiday Inn brand with a proven track record, pursuing a more luxurious brand to drive performance, or operating as an independent property. Drive Group Business An investor can reduce the negative impact of seasonality in the weaker September-January months by focusing more heavily on group business during the week days, where the Property has historically underperformed. The newly finished guestrooms, renovated meeting spaces, and expansion of the lobby bar/lounge and pool deck bar will allow the operator to sell a higher-quality package than previously offered at the Property. Furthermore, there remains opportunity to bring the catering in-house or package the F&B operations with the restaurant as part of a third-party lease. Lease Out the Restaurant Operations to a Third Party An investor can choose to outsource the operations of the three-meal-a-day restaurant, the Sand Dollar Dining Room, located on the 7th floor. The restaurant is easily accessible to both guests and visitors of the Hotel via a separate, glass elevator, which is currently not in use. The newly renovated space is the only elevated restaurant that offers sweeping views of the Gulf of Mexico on Lido Key. Effective marketing from a third party operator will further activate the space and attract the high-end shoppers from the proximate St. Armand s Circle (138 stores) along John Ringling Causeway (34,000 vehicles per day) and provide a consistent operating lease income to the bottom line. 5

6 SARASOTA-BRADENTON INTERNATIONAL AIRPORT (6.4 MILES) DOWNTOWN SARASOTA (3.6 MILES) SARASOTA MEMORIAL HOSPITAL (4.3 MILES) MOTE AQUARIUM ST. ARMAND S CIRCLE SHOPS: BRIGHTON TOMMY BAHAMA MICHAEL S STARBUCKS SPERRY ST. ARMAND S KEY RINGLING CAUSEWAY (34,000 VPD) SARASOTA YACHT CLUB S BOULEVARD OF THE PRESIDENTS BIRD KEY AVERAGE HOME PRICE $1.6 Million AVERAGE HOME PRICE $593,000 Lido Beach, FL LIDO KEY BEACH BENJAMIN FRANKLIN DRIVE BEACH PAVILLON GULF OF MEXICO 6

7 property overview Lido Beach, FL BENJAMIN FRANKLIN DRIVE 7

8 hfflp.com INVESTMENT ADVISORY HFF New York 45 Rockefeller Plaza Suite 2400 New York, NY (T): (212) Daniel C. Peek Senior Managing Director Head HFF Hotel Group (212) KC Patel Senior Director (212) CAPITAL MARKETS Scott Wadler Senior Director (305) HFF Tampa 101 E Kennedy Boulevard Suite 3905 Tampa, FL (T): (813) Preston Reid Director (813) preid@hfflp.com HFF Miami 1450 Brickell Avenue Suite 2950 Miami, FL (T): (305) Kevin Ross Analyst (305) kross@hfflp.com HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change Holliday Fenoglio Fowler, L.P. ( HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 24 offices and is a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information, please visit hfflp.com or follow HFF on