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Kayak Miami Beach hotel sale results in loss for Varde
Global investment firm sold property for $13M after acquiring it from previous owner that defaulted on $14M mortgage debt
Varde Partners wasted no time unloading a Miami Beach hotel, even taking a loss on the quick sale of the Kayak-branded property.
An affiliate of Varde, a Minneapolis-based global alternative investment firm, sold the two-story, 51-unit hotel at 2216 Park Avenue for $12.8 million to New York-based Blue Suede Hospitality Group, records and real estate database Vizzda show. The deal breaks down to $250,980 per key.
Less than a month ago, Varde, led by CEO Ilfryn Carstairs. acquired Kayak Miami Beach for $13.6 million in a deed in lieu of foreclosure deal.
That means Varde sold the hotel for roughly $800,000 less than the mortgage debt owed by the previous owner, an affiliate of New York-based and Santa Monica, California-based Raven Capital Management.
Last year, Varde sued Raven in Miami-Dade Circuit Court, alleging the firm defaulted on its loan after extending the maturity date three times prior to filing its foreclosure complaint. Raven financed its 2018 $20 million purchase of the 1936 Art Deco building with Varde’s $13.6 million loan, records show.
After renovations, Raven rebranded the hotel under the Kayak banner in 2021.
Blue Suede CEO Kenneth Lipschutz said via email that his firm plans to temporarily close the Kayak Miami Beach in order to make some changes at the hotel. “The property is in excellent overall condition, and we are very optimistic about its location,” Lipschutz said. “We plan to implement targeted upgrades, including rebranding the hotel and partnering with a new restaurant operator, and look forward to reopening the property later this year.”
The company is bullish for small South Beach hotels. Last year, Blue Suede picked up South Beach Plaza Hotel and South Beach Plaza Villas, both on 14th Street and Collins Avenue. Blue Suede paid a combined $26.5 million for the two properties, which were built in 1934 and 1936, respectively. Combined, the hotels have 79 rooms.
In another recent hospitality real estate deal, Blackstone dove into South Florida’s luxury hotel submarket. The New York-based investment giant paid $97.7 million for W Fort Lauderdale, a 346-key oceanfront hotel in Fort Lauderdale. Steve Ross’ Related Fund Management sold the property.