New York-based Tishman Hotels is expanding its Central Florida portfolio with the recent acquisition of the Grand Orlando Resort at Celebration, Kissimmee’s second-largest hotel.
A Tishman affiliate paid $36.3 million last week for the ground lease of the full-service, 718-room hotel at 2900 Parkway Blvd. Banco Popular de Puerto Rico provided $43.5 million in financing to the buyer.
Eric Opron, executive vice president for Tishman, told GrowthSpotter the hotel makes an attractive investment because the sellers had already begun a full renovation of the property and had secured an agreement with Marriott to rebrand the property under its premium Delta flag.
Opron said the lobby and more than 200 guestrooms have been updated, but they still need to be outfitted with Delta-approved fixtures, supplies and linens. All of the guestrooms should be completed by the end of this year.
“So going forward, we will actually begin selling the renovated room product as a Delta-branded room product by mid-to-late second quarter of this year,” he said.
The renovations will extend to the hotel’s restaurant, which should be completed in early 2023, as well as all of its amenities. The pools will be significantly upgraded and a second fitness center with a cardio theater will be added. The development team will also be enhancing the pool bar restaurant and adding Delta’s fully-stocked “pantry” to the food and beverage options. The total renovation budget is $35 million.
“We are putting property improvements in place to obtain a resort status with a Delta brand, and we would be the second Delta brand resort anywhere,” Opron said. “Most properties are Delta hotels but we would be the second property to have a resort status.”
The assignor, or seller, was Cambridge Landmark, a Brazilian hotel-focused private equity group that had owned the asset since 2018. At that time, the firm paid $28 million for the land lease, which included the building but not the fixtures and furnishings. Cambridge Landmark had initially announced plans to invest $10 million in renovations at the former Radisson property and rebrand it under Marriott’s Delta flag. Opron said the budget will be substantially higher than the initial figure.
StepStone Hospitality has been named the management company and will oversee the property. A new general manager and director of sales and marketing have been appointed.
The hotel and conference center was built in 1987 and sits on 26 acres at the northeast quadrant of the U.S. 192 interchange, with strong visibility from I-4. It has two outdoor pools, including one with a waterfall grotto, a fitness center, tennis and volleyball courts and more than 10,000 square feet of flexible meeting space. The Walt Disney World Good Neighbor hotel offers free shuttle service to and from the theme parks.
The property is located in the Kissimmee West submarket, which has a 12-month average occupancy of 46.7% versus 59.7% for the Orlando Market, according to CoStar. The 12-month Average Daily Rate in Kissimmee West was $102.38 versus $124.19 for the Orlando Market.
Opron said Tishman expects to benefit from the relaunch. “It’s just a great distribution channel that becomes available, and it that location with everything that’s around it — Disney’s Wide World of Sports, the Osceola sports complex, some major convention hotels for overflow — there are a lot of channels that will really become available to that property. So we do think that the conversion will be a nice boost to that in both occupancy and rate.”
The property is adjacent to the former Orlando Sun Resort, a sprawling 1970s-era motel complex on 77 acres right at the I-4 interchange. A former Hyatt that has been closed for years, it is considered one of the key infill redevelopment targets in the Celebration submarket.
Tishman has had a presence in Orlando’s hotel sector for more than 30 years and maintains a satellite office here. The company is best known locally for its ownership stake in the Walt Disney World Swan and Dolphin hotels in Lake Buena Vista. The 349-room Walt Disney World Swan Reserve, an Autograph Collection Hotel, opened in November 2021.
In 2018, Tishman paid $81 million for three select-service hotels near Orlando theme parks. The three properties, Homewood Suites Orlando, Homewood Suites Lake Buena Vista and Hilton Garden Inn Lake Buena Vista, comprised 400 total rooms in the tourism corridor.
EDITOR’S NOTE: This article has been updated with new details about the hotel manager and renovation budget.
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