As high-end developers price out smaller players on Hollywood Beach, a trio of entrepreneurs plan to convert a rundown motel at 509 North Federal Highway near Young Circle into a 1960s-inspired boutique hotel called Runway Resort.
Lauren Abrams, a veteran of hotels run by Ian Schrager and Chris Blackwell, teamed up with Manny Mashouf, the founder of the publicly traded women’s retail store Bebe, and Alan Roth, a former Miami Beach nightclub owner, to buy the 60-room MiMo-style Entrada Resort.
The partners are closing on the property at the end of the month after an exhaustive search for a small hotel on Hollywood Beach came up empty. With builders like The Related Group and Lon Tabatchnick constructing the $200 million Hyde Resort & Residences and the $147 million Margaritaville Hollywood Beach Resort, existing hotel owners near the sand are jacking up their prices, Abrams said.
“When I started looking with my director of operations, the prices were at $175,000 per room,” she told The Real Deal. “Within a week, it had doubled to $250,000 per room. Every time we met with another realtor, the prices kept going up on the beach.”
Following her 13-year career as vice-president of marketing for both the Royalton Hotel in New York City and subsequently Island Outpost Hotel, Abrams and two ex-colleagues bought a boutique hotel in Islamorada called Casa Morada in 2001. Twelve years later, they sold it, and Abrams began looking for a new boutique hotel to take over.
“I like to find places where there is a desire for boutique hotels,” she said. “And I wanted to do something in Hollywood.”
When she struck out on Hollywood Beach, Abrams came across the Entrada Resort while searching the real estate listing site Loopnet. “It’s a dump right now, but it’s also perfect,” she said. “It sits on an acre of land and we are only three blocks away from Young Circle where there is significant redevelopment going on.”
Abrams is referring to the construction of two mixed-use towers, Hollywood Circle and Young Circle Commons, on Young Circle. And the price was right for Entrada Resort. “It’s $88,000 a room,” she said. “By the time we are done renovating it, the hotel will be worth $150,000 a room.”
She originally brought in Roth, who happens to be the landlord of the house she is renting in Miami’s Belle Meade neighborhood, as her consultant for entertainment, food and beverage. Roth owned the now-defunct Rumi nightclub in Miami Beach and has more than 30 years experience throwing parties and events. “Once she brought me on board, I fell in love with the space,” Roth said. “Lauren and really hit it off and she asked me to be a partner.”
In turn, he recruited Masouf, who is Roth’s partner in buying and renting homes in Belle Meade. Masouf, who no longer owns Bebe, but remains on the company’s board of directors, is putting up 51 percent of the equity for the project. “I think it is an excellent deal,” Masouf said. “That area of Hollywood has not really been developed like the rest of south Florida. We are at the beginning of the next hot trend in Hollywood.”
Abrams said the partners plan to keep the motel in operation while most of the $3.5 million in renovations are made. “I’m hoping we can have the grand opening by Fourth of July weekend,” she said. “I do believe there will be a huge demand for this type of resort.”
Craig Studnicky, a principal of of Miami-based International Sales Group, said the group faces the challenge of convincing tourists and visitors that the area near and around Young Circle is a destination. “You are about a mile away from the beach,” Studnicky said. “That’s a potential weakness.”