Brazilian business group Brasif, owner of the Avanti Resort on International Drive, closed a $26 million purchase on Monday for its second hotel in Orlando's tourism corridor, the 652-room International Palms Resort & Conference Center.
The company will shut down the property early in First Quarter 2017, carry out a thorough renovation with an independent rebranding, and reopen around October 2017, said Marco A. Manzie, founder of Paramount Hospitality, Brasif's owner-representative and property manager in Orlando.
"The game plan will be to recreate this hotel in an image we believe will be adopted by the market, with the goal to be a family-driven property that also competes for SMERF and association business," Manzie told GrowthSpotter on Monday.
Located on 13.64 acres at 6515 International Dr., southwest of Wet 'n Wild water park, a highlight of the International Palms is its 20,000 square feet of meeting space, which Brasif's other hotel doesn't have. SMERF is a meeting industry acronym that encompasses social, military, educational, religious and fraternal groups.
The buyer sourced a $14.3 million mortgage from Banco do Brasil Americas to help finance the acquisition.
Paramount led Brasif's conversion of an aging Econo Lodge on I-Drive into the independently branded Avanti, after the Brazilian investor bought it in 2012. The company is now planning to build a 21-story UNIQ Hotel on that site as well.
Manzie said the hotel renovation plans are still in development, but he expects the property's room count to remain at 652.
This hotel and the International Palms Cocoa Beach were the last two hotels Lone Star Funds was holding in a hospitality fund it was liquidating, said Paul Sexton, vice president in Orlando for HREC Investment Advisors, which represented the seller.
Opened in 1979, the International Palms on I-Drive was given a $4.4 million renovation in 2011 ($7,000 per key), according to HREC.
The property's uniquely large parcel and walkable distance to many I-Drive attractions helps position it for significant value-add potential.
RevPAR was $35.57 as of February compared to $54.03 for a comparable properties set, reflecting a RevPAR index of 65.8 percent. The difference represents another $4.4 million in additional revenue potential from rooms, HREC said in its marketing materials.
The property generates more than $11 million in annual revenue, and the outgoing owner had been able to increase net operating income (NOI) by more than $1.8 million since the end of 2012, based on management's leverage of renovations, HREC noted.