Back again: Michael Shvo, partners to buy oceanfront Richmond Hotel in South Beach

The same partnership paid $103M for the Raleigh in February
By Ina Cordle | April 29, 2019 05:35PM

Patricia McBride Herbert, Allan Herbert, and Michael Shvo with 1757 Collins Avenue

Patricia McBride Herbert, Allan Herbert, and Michael Shvo with 1757 Collins Avenue

Developer Michael Shvo and his partners are bulking up in South Beach. The partnership is under contract to buy the oceanfront Richmond Hotel, marking the group’s second purchase along Collins Avenue this year, sources told The Real Deal.

In February, Shvo’s New York-based SHVO, Bilgili Holdings and Deutsche Finance America paid Tommy Hilfiger and the Dogus Group $103 million for the 83-room Raleigh Hotel. The property is next door to the Richmond Hotel.

The Richmond, at 1757 Collins Avenue, has 92 rooms in a four-story, nearly 52,000-square-foot building. It was built in 1941 and sits on a 32,670-square-foot lot, records show.

The sellers are Patti and Allan Herbert, who represent the third generation of the family that has owned the hotel since its inception, according to the Richmond’s website. The Herberts are major benefactors to the Frost Science Museum and the University of Miami, where they donated $8 million to name the Patti and Allan Herbert Wellness Center.

No sale price for the Richmond has been disclosed. The Raleigh, which sits on a larger, 60,541-square-foot lot, sold at $1.24 million a key. It had been closed since Hurricane Irma hit South Florida in September 2017.

John Wijtenburg, director of Colliers International South Florida’s hotel group, estimates that the Richmond could sell for about $600,000 a key or $55 million. “It needs a good bit of work to come up to the standards of competitive properties in the area, but it’s a well known asset in that market,” he said.

The Raleigh acquisition marked the first in South Florida for Shvo, chairman and founder of SHVO, and his partner, Serdar Bilgili, the owner of the Istanbul-based real estate private equity firm BLG Capital.

In New York, Shvo’s projects include the Getty building in West Chelsea. The same partnership that acquired the Raleigh and is now acquiring the Richmond also paid $135 million for the office portion of 685 Fifth Avenue in 2018. The group recently won approval to convert that space to residential condos.

Other oceanfront hotels near the Raleigh and Richmond that have sold in recent years include the Sagamore Hotel, which Fort Lauderdale-based InSite Group and New York-based EL Group bought for $63 million in 2016; and the Shore Club Hotel, which New York-based HFZ Capital purchased for $175.3 million in 2014.