An affiliate of California-based Stratus Development Partners paid $3 million Tuesday for the Downtown Orlando site of a planned 155-key Cambria Suites west of Lake Eola, as part of its $30 million-joint venture with a South Florida developer.
Located at 170 E. Washington St. on the southwest corner with Rosalind Avenue, the 0.63-acre vacant parcel has been owned by an LLC affiliate of Choice Hotels International's corporate office since 2010.
Stratus has developed Cambria-branded hotels across the country, but this is its first commercial development in Florida in more than five years.
Sunny Isles Beach-based investor and developer HB Capital Group had identified and worked on the Eola-adjacent site for a few years with Choice Hotels, and brought on Stratus after investing in two of their Cambria hotels in Napa and Sonoma, California, senior director Dailyn Mizrahi told GrowthSpotter on Thursday.
The hotel will now feature "a strong retail component" on its ground floor of up to 3,500 square feet, with Select Strategies Realty hired to handle leasing, she added.
Stratus is now the lead development member of the JV, responsible for sourcing a construction loan and general contractor to get the project built and stabilized, partner David Wood told GrowthSpotter. HB Capital will also have a role in development and guide the retail concept, he added.
"The Orlando market is strong, RevPar for downtown is healthy and we really see a rebirth there in downtown of pedestrian activity," Wood said.
HB Capital has led the group's Master Plan application thus far with the city of Orlando. It drew a Municipal Planning Board recommendation in September and approval last month from City Council.
The partnership is now immersed in design and construction documents with Newport Beach-based Hannouche Architects.
Total project cost is now estimated near $30 million, said Wood, with Stratus expecting to pursue a construction loan in First Quarter 2018 at 75 percent loan-to-cost. Private bids for a GC will also be sought in early Q1.
The land seller, Ortel Partners LLC, a direct affiliate of Choice Hotels International, also had Stratus' buyer entity sign an agreement giving Choice the right to repurchase if certain development deadlines aren't met for the hotel. Details of those deadlines weren't included in a shortened version of the agreement document recorded locally.
The buyer sourced a $2 million loan directly from Choice Hotels International. A third-party hotel management firm will be hired.
HB Capital is managed by South Florida hotelier Steven Hurowitz, who is also managing principal in Consolidated Mark Development (CMD). This project will be an Orlando market entry for Hurowitz's firm, which has led the $20 million redevelopment in recent years of the 355-key Newport Beachside Hotel & Resort on Collins Avenue, and the 298-key Sawgrass Grand Hotel & Suites in Sunrise.
The hotel's rooftop balcony amenity for guests will be the first or second for a hotel in Downtown Orlando, depending on when United Capital Corp. builds out and opens its planned rooftop bar on the renovated Marriott hotel near Creative Village.
The new MP filing merely updated a previously approved Cambria Hotel & Suites Planned Development ordinance that was approved by the city in 2011. Choice pursued the project that year with Concord Eastridge as development partner, but it stalled due to capitalization challenges.
Jason W. Searl, attorney with Gray Robinson, has represented the new developers in their recent applications to the city, and negotiations with the neighboring St. George Orthodox Church.