Next year’s opening of Disney’s Star Wars: Galaxy’s Edge attraction has prompted the Saudi owners of 200-plus acres surrounding the Gaylord Palms Resort and Convention Center to revamp their marketing strategy for the land.
Master developer Xentury City has engaged CBRE’s Robert McEwan to market individual lots on Osceola Parkway and International Drive for sale to luxury hotel developers. Previously, the owners would only consider land leases for the real estate, which is fully entitled and pad-ready.
“The idea now is that we are selling these lots for high-end hotels,” McEwan told GrowthSpotter on Friday. “The two parcels directly across from the Gaylord Palms are most likely to go first.”
Those lots are 29 and 31 acres, respectively, and sit at the northwest corner of Osceola Parkway and I-Drive. CBRE is still pulling together its marketing materials and website, but McEwan said a preliminary brochure has drawn global interest. The hotel pads could even command five-star hotels.
“The hotel market is the best it has ever been, and that’s what is driving the level of interest,” he said. “There is potential for a five-star hotel. The metrics for assets like the Waldorf Astoria and Four Seasons Orlando are all breaking records for occupancy. That end of the market is underserved based on the demand.”
The four star/four diamond Gaylord Palms is adding 300 rooms as part of a total $150 million expansion of the hotel and convention center.
“I think the expansion of the Gaylord Palms helps to create a larger presence and momentum for the balance of the property,” McEwan said.
Paul Sexton, vice president with HREC Investment Advisors, said Xentury City has an advantage over other segments of the tourism corridor because it falls outside of the “area of protection” for most hotel brands in the Lake Buena Vista submarket.
“I like the idea of a concentration of full-service hotels at that intersection,” Sexton said. “Then we’ll start to see all kinds of ancillary development and new restaurants opening around them.”
One of the key marketing strategies for CBRE is to focus on the $190 million Disney is spending to revamp Osceola Parkway and make it the primary entrance to Hollywood Studios this fall, in anticipation of next summer’s opening of the Star Wars attraction and hotel. It’s already the gateway to Animal Kingdom and ESPN Wide World of Sports.
“The traffic counts on Osceola Parkway are going to increase dramatically,” McEwan said. “Disney is driving all of this. Osceola Parkway is a road that was underutilized. Now Disney wants everyone to come in that way.”
Xentury City’s parent company is a firm called Xenel International. Xenel, based in Jeddah, Saudi Arabia, is a billion-dollar multinational corporation dealing in real estate, oil, gas and other industries.
Osceola County approved the first Development of Regional Impact (DRI) for the project in 2004. It has entitlements for another 4,000 hotel rooms, 500 timeshare units and 400,000 square feet of retail space, and Xentury City has already completed the master drainage system for the project.
The firm also has permit approvals to mitigate dozens of acres of wetlands on the 80-acre parcel at the northeast corner of I-Drive and Osceola Parkway, making that lot fully buildable.
Two lots on the east side of I-Drive and south of Osceola Parkway (30.5 and 22.5 acres) are well-suited for multifamily, timeshare and retail development.
“The total listing price for all of the property is over $200 million,” McEwan said. “For someone to come in and buy it all would make my job easier, but more likely it will be individual users.”
Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @LKinslerOGrowth. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.
