Three’s a charm? Michael Shvo, partners add to oceanfront assemblage in Miami Beach

After buying the Raleigh Hotel in February, the partnership has now put two adjacent beachfront hotels under contract

Apr.April 30, 2019 06:00 PM
Michael Shvo and Serdar Bilgili with South Seas Hotel at 1751 Collins Avenue

Michael Shvo and Serdar Bilgili with South Seas Hotel at 1751 Collins Avenue

Michael Shvo and his partners are planning to buy their third property, the South Seas Hotel, as they expand their oceanfront assemblage in Miami Beach, The Real Deal has learned.

The partnership of SHVO, led by Shvo; Bilgili Holdings, led by Serdar Bilgili; and Deutsche Finance America, put the South Seas at 1751 Collins Avenue in South Beach under contract, according to sources.

The 118-key property is adjacent to the Richmond Hotel, which the group also just put under contract. The Richmond, in turn, is next to the Raleigh Hotel. The partnership purchased the Raleigh in February for $103 million from Tommy Hilfiger and the Dogus Group.

Built in 1941, the South Seas is a four-story, 50,386 square-foot building built on a 32,500-square-foot lot.

Combined, the three oceanfront hotels sit on lots totaling more than 125,000 square feet, or nearly 2.9 acres.

Both the South Seas and the Richmond have been longtime family owned properties — among the few that remain in that stretch of South Beach.

Records show the seller of the South Seas is Synergetic Real Estate of Florida LLC, with an address linked to the Harborside Inn in Newport, Rhode Island. The entity is led by Thomas Glassie, Paul Doucette and John Taft.

Glassie’s father and Doucette’s father-in-law, Donelson “Don” C. Glassie, Jr., of Newport, Rhode Island, who died in 2011, purchased several hotels along the oceanfront stretch of Collins Avenue and Ocean Drive in Miami Beach in the 1980s, according to an obituary in the Newport, Rhode Island Patch. The family still owns the Marseilles Hotel at 1741 Collins Avenue next door to the South Seas, and the Avalon Hotel on Ocean Drive. In New York, Glassie’s projects included the Park South Hotel and the Strand Hotel, according to the obituary.

No sales price for the South Seas was disclosed. But John Wijtenburg, director of Colliers International South Florida’s hotel group, estimates that the South Seas — like the Richmond — could sell for about $600,000 a key, or more than $70 million.

With an assemblage of three hotels, the investors can gain operating leverage, he said.

“Because there is not a tremendous amount of flexibility about what you can do with the design and renovations [due to the historic nature], the way to add efficiency and operating value is creating a resort experience with a few assets,” Wijtenburg said. Amenities could include an affiliation with a well-known chef or spa services.

The Raleigh acquisition marked the first in South Florida for Shvo, chairman and founder of SHVO, and 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 and South Seas also paid $135 million for the office portion of 685 Fifth Avenue in 2018. The group plans to convert that space into Mandarin Oriental condos.

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