The Real Deal Miami

KHP Capital Partners acquires Key West Inns portfolio for $109M

Deal includes 6 boutique hotels with 222 rooms in Key West
By Katherine Kallergis | August 08, 2018 10:32AM

From left: KHP Capital Partner’s Ben Rowe, Mike Depatie, and Joe Long with Key West Inns (Credit: KHP Capital Partners)

A San Francisco private equity firm just paid $109 million for the Key West Inns, a portfolio of six boutique hotels in Key West.

Julie Fondriest, who began assembling the 222-key portfolio in 1997, sold the Key Lime Inn, Lighthouse Court, Albury Court, Merlinn Inn, Chelsea House and Cypress House to KHP Capital Partners, a hotel investment firm that also owns the Hilton Key Largo, a 200-room hotel and marina in the Florida Keys.

KHP paid about $491,000 per room for the hotels at 1030 Eaton Street, 709 Truman Avenue, 601 Caroline Street, 725 Truman Avenue, 902 Whitehead Street and 811 Simonton Street. The sale also includes office buildings and parking lots, according to a press release.

Will Langley and Claude Gardner of the Gardner/Langley team at Berkshire Hathaway HomeServices Knight & Gardner Realty brokered the deal.

In 2016, KHP acquired the renovated Hilton Key Largo resort from the Blackstone Group for $62.3 million. That property includes more than 13 acres of waterfront land at 97000 South Overseas Highway.

The firm, led by managing partners Mike Depatie, Joe Long and Ben Rowe, focusing on investing in boutique and independent hotels, according to its website.

While much of the Florida Keys has recovered from damage caused by Hurricane Irma, a number of resorts and attractions are still rebuilding in the Lower Keys and Islamorada. Little Palm Island, a luxurious resort on a private island near Little Torch Key, will not reopen until early next year, and Hawks Cay Resort & Marina in Marathon is scheduled to reopen starting at the end of the month.