The Sagamore Hotel in South Beach has sold to Fort Lauderdale-based InSite Group for $63 million, just days before $41 million in debt and interest payments were due – and after settling with suitor Merchants Hospitality, The Real Deal has learned.
Sagamore Partners Ltd. sold the hotel at 1671 Collins Avenue to EBJ/InSite Sagamore, according to a deed signed April 6 and recorded by Miami-Dade County Tuesday night. An InSite executive had not returned a message left Tuesday afternoon.
Executors for the estate of the Sagamore’s late owner Martin Taplin, who died on March 8, recently reached an agreement with Merchants Hospitality, which earlier also had a $70 million contract to buy the hotel, according to a Merchants spokesperson. The New York-based firm owns the Hyatt Andaz, Philippe Chow and Westin Aruba Hotel & Casino.
“The matter has been resolved to our mutual satisfaction and we look forward to working together in the future,” Merchants CEO Abraham Merchant, who signed the agreement, said in a statement. Merchants declined to disclose if a payment was part of the settlement.
The Sagamore faced a $31.5 million balloon payment and $14 million in interest due to LNR Partners on April 11, a Sagamore spokesperson previously had told TRD.
Taplin’s estate faces additional claims of more than $14 million tied to various pending lawsuits, Miami-Dade probate court records show.
Last week, movers began removing artwork from the oceanfront Sagamore, where Taplin and his wife Cricket had based their art collection. The all-suite Sagamore, which had called itself “The Art Hotel,” displayed its collection of photography, sculpture and video throughout its common areas and event space.
The 93-room hotel, originally built in 1948, encompasses 92,000 square feet on a 43,125-square-foot site, according to Miami-Dade property records. The five-story property last sold for $315,000 to Sagamore Partners in 1997.
At $63 million, the new price InSite paid equates to $677,419 per room. InSite Group, backed by Israeli investors, also owns such hotels as the Sheraton Tampa Riverwalk, the Coco Key Resort in Orlando, and the former Clarion Suites in New Orleans.
South Beach oceanfront hotels have fetched sky-high prices recently. Last year, Chesapeake Lodging Trust bought the James Royal Palm, less than two blocks away from the Sagamore, for $278 million or $707,000 per room for the 393-room oceanfront hotel.
Also last year, Carey Watermark Investors paid $328.6 million to purchase a majority stake in Key Biscayne’s waterfront Ritz-Carlton condo hotel which has 302 hotel rooms, including 188 condo-hotel units. Blackstone Group also purchased an 85 percent interest in downtown Miami’s InterContinental Miami hotel for $322 million, as part of a $6 billion deal.
The Sagamore had filed for Chapter 11 bankruptcy protection in October 2011. At the time, Sagamore Partners Ltd. said it filed for bankruptcy to protect the property from a foreclosure suit filed by special servicer LNR Partners. The hotel had defaulted on its $31.5 million mortgage and tried to stop a foreclosure action in 2010. Sagamore Partners said that it stopped making the payments in an effort to restructure the loan, as per LNR’s instructions.