Brazilian investors pay $29.4M+ for second largest hotel in Kissimmee submarket

A Brazilian hotel-focused private equity group paid more than $29.4 million on Friday for the Radisson Resort Orlando-Celebration at Kissimmee's W192 - Interstate 4 interchange, and recovered nearly the full investment that day by splitting off the land and selling it.

The hotel will be converted to a Marriott flag, a lead executive with buyer group told GrowthSpotter on Wednesday.

With 719 rooms, three restaurants and more than 10,000 square feet of meeting space, the Radisson is the largest hotel on the W192 tourism corridor and second only to the Gaylord Palms -- another Marriott-owned property -- in the Kissimmee submarket.

The deal structure was identical to one utilized by the same seller and buyer in June 2017 for the Sheraton Orlando North in Maitland.

The hotel sold first to CL2 Orlando LLC, a holding company for Brazilian group Itacare Capital Partners, which is headquarted in the British Virgin Islands and maintains offices in New York, Miami and Sao Paulo.

The $29.4 million price listed in the deed does not include value allocated to personal property. Those fixtures and furnishings typically comprise up to 15 percent of the total purchase price, which would put this asset in the $35 million range.

Itacare founder Pedro Miranda then bifurcated the building improvements from the land, which he sold the same day to KCP Celebration LLC for $28 million. Miranda's CL2 Orlando retained the hotel and signed a 99-year ground lease.

KCP is an affiliate of Net Lease Capital Advisors (NLCA), a real estate investment and advisory firm based in New Hampshire. NLCA Marketing Director Chris Campbell said the investors plan to rebrand the property as a Marriott now.

Other Marriott-branded properties in Kissimmee include the Springhill Suites at Calypso Cay and Fairfield Inn & Suites on W192.

The hotel and conference center was built in 1987 and renovated in 2013. It has a waterfall pool, fitness center and more than 10,000 square feet of flexible meeting space. It sits on 26 acres at the northeast quadrant of the interchange, with strong visibility from I-4.

Wells Fargo provided $43 million in financing in the form of two 30-year fixed mortgages: a $29 million senior note (4.95 percent) and a $14 million subordinate note (8.5 percent). Since the loan values far exceed the purchase price, it indicates the new owners plan to make significant investments.

HREC Vice President Paul Sexton, who represented the seller, said the buyer group has a strong track record in the market based on the Sheraton purchase in Maitland.

"They bought this property to enhance it and improve the product offering," Sexton said. "This is going to be a key hotel on the W192 corridor."

The hotel is located within the Parkway development, which is also home to the Vacation Village timeshare resort. Owner Lando Resorts is currently building a new 11-story tower (132 units) as part of a phased expansion on the former Arabian Nights property.

It's a mile from Florida Hospital Celebration Health, which expects to open a new $80 million patient tower in 2019.

The Radisson property is adjacent to the former Orlando Sun Resort, a sprawling 1970s-era motel complex on 77 acres. A former Hyatt that has been closed for years, it is considered one of the key infill redevelopment targets in the Celebration submarket.

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