The Raleigh Hotel in Miami Beach has been sold to a partnership between New York-based developer David Edelstein and hotelier Sam Nazarian. The deal is unique in that both buyers own hotels just blocks away from The Raleigh on Collins Avenue: Edelstein owns the nearby W South Beach, while Nazarian owns the recently opened SLS South Beach.
The price was not disclosed. The onetime Andre Balazs-owned property, which was built in 1940, had been purchased by Brilla in 2009 for $30 million. Brilla later took out a $20 million loan for renovations.
“The interesting thing about this is you have two separate hoteliers who each have their own hotels on the beach, teaming up to buy a hotel together,” Suzanne Amaducci-Adams, who leads the Hospitality Group at the Bilzin Sumberg law firm in Miami, told The Real Deal. “You have to wonder why they did it – is it because the Raleigh is a unique asset? That there are so few boutique hotels on the beach, or that it’s not encumbered by a national brand?”
It might be the third option, she said, with rumors that the two plan to expand the Raleigh name nationally and internationally.
“The Raleigh name is very well recognized on the beach, and it will be interesting to see how they model and develop the Raleigh brand,” Amaducci-Adams said.
Of the acquisition, Nazarian, in a statement, said: “David and I share a deep passion for South Beach, and ensuring a celebrated jewel like The Raleigh is preserved in a manner fitting of its great legacy is a mission we are both supremely committed to. South Beach is one of the world’s premier hospitality destinations, and The Raleigh provides the perfect complement to the community and to the experiences offered at SLS Hotel and W South Beach.”
The New York Post first reported Edelstein’s interest in the property in June. The developer said today he wanted to “transport The Raleigh’s trademark elements and adapt them to fit within different environments.”
Nazarian’s sbe Hotel Group will assume full operational control of the property this month with a renovation planned to begin in April 2013 and last until November.
Edelstein and sbe said they would resume the hotel’s partnership with chef Michael Schwartz, who will debut a new restaurant concept at the hotel in 2013.
Either way, Amaducci-Adams said the deal was a “strong sale for the Miami Beach market,” which recently rose to the fourth-best hotel market in the country in terms of room rates and revenue per available room, according to STR’s STAR reports.
“Miami is just kind of a cool and hip place to be right now, and it’s driving real estate prices,” Amaducci-Adams said.