Affiliates of Orlando-based Sun Vista Hotels paid a recorded $39.5 million on Wednesday for two independent hotels in International Drive's convention center district, with plans to rebrand with national flags and embark on a multimillion dollar renovation.
The company also bought an adjacent 1.58-acre vacant parcel for $1.4 million, which it will bank for expansion or a third hotel in the coming years, president Alpesh Khushal told GrowthSpotter.
Located at 8444 International Dr. and 8368 Jamaican Court, the two hotels lie adjacent to the YMCA Aquatic Center and directly west of the I-Drive 360 complex.
The Allure Resort has 223 rooms over seven stories built in 1985 and 2000, and drew a recorded $23 million in the portfolio deal. That value on the deed typically reflects 90 to 95 percent of a hotel's actual purchase price, not counting interior FF&E assets that weren't declared.
Neighboring the Allure, the five-story Metropolitan Resort has 300 rooms built in 1985, and was bought for a recorded $16.5 million. Sun Vista owns a 200-room Quality Inn directly north of the new assets on Jamaican Court.
"We saw great upside with these properties. For The Metropolitan we've signed a franchise agreement with Clarion Inn & Suites, and will rebrand after a significant renovation," said Khushal, who estimated the Choice Hotels property improvement plan to be at least $3 million.
"We know this location and market, and Universal's plans for future theme parks coming basically across the street (due east) was just icing on the cake," he continued. "We're confident this location will be a premier hotel anchor spot on International Drive."
For the Allure Resort, Sun Vista is negotiating with national hotel brand owners for what should be a "higher-end, full-service flag," Khushal said.
That hotel has a bar and restaurant which is now partially closed and 7,000 square feet of event space that will be fully renovated, he added. A building near the swimming pool may also be converted into a tiki bar.
"Over the next six to 12 months we'll start on The Metropolitan renovation for Clarion first, finalize the Allure branding and start that renovation," Khushal said. "Development of that outparcel would be Phase 3. The Allure will be completely gutted for renovation, but the hotels will continue operating during the process."
Sun Vista is still soliciting bids from general contractors to lead the work on each hotel renovation, he said. The company manages its own properties.
The buyer sourced loans of $22 million from Wall Street Ventures LLC and $11.7 million from theState Bank of Texas to help fund the acquisitions.
The seller was 8444 Investments, LLC, an investment vehicle for Michigan-based hotel developer and investor Remo Polselli and wife Hanna Karcho. The entity previously paid $18 million for the properties in February 2007.
Polselli told GrowthSpotter he has no plans to reinvest the proceeds of his sale locally, and at this point his family no longer holds any hotel assets in Greater Orlando.