Here’s how much Michael Shvo and partners paid for their South Beach hotels

The group financed the deals with a $100M acquisition loan
By Katherine Kallergis | August 05, 2019 02:30PM

Michael Shvo

Michael Shvo

New York developer Michael Shvo and his partners Bilgili Holdings and Deutsche Finance America closed on two South Beach hotels neighboring the Raleigh Hotel.

After buying the Raleigh property for $103 million in February from Tommy Hilfiger and the Dogus Group, the Shvo group revealed the closing prices for the two adjacent properties. The group paid $87.85 million for the Richmond Hotel, at 1757 Collins Avenue, and $52 million for the South Seas at 1751 Collins Avenue, according to a spokesperson.

In all, Shvo and his partners paid $242.85 million for the three hotels. The group financed the deals with a $100 million acquisition loan from California-based Acore Capital. Lotus Capital Partners arranged the financing.

The deals closed on Monday, just days after the Miami Beach City Commission approved an ordinance that will allow property owners who own 115,000 square feet of land to build “ground level additions” up to 200 feet high in a zone that includes Shvo’s properties.

Shvo hired architect Kobi Karp to design the 2.9-acre project, which involves restoring the South Seas and Richmond hotels.

The Raleigh, an 83-room Art Deco hotel at 1775 Collins Avenue, sold for about $1.24 million a key, one of the most expensive hotel sales on a per-room basis in Miami-Dade County. The Raleigh had been closed since Hurricane Irma hit South Florida in September 2017.

The Richmond 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. Patti and Allan Herbert, who represent the third generation of the family that has owned the hotel since its inception, sold the property to Shvo.

The Richmond deal included the apartment building at 1757 James Avenue and the parking lot at 1832 James Avenue, the spokesperson said.

The South Seas, a 118-key, four-story, 50,386-square-foot building, was built in 1941 on a 32,500-square-foot lot.

The Richmond and South Seas acquisitions mark the fourth and fifth joint venture between Shvo, Bilgili Group and Deutsche Finance. They also own 9200 Wilshire in Beverly Hills and the office portion of 685 Fifth Avenue, which is now being converted into a Mandarin Oriental Residences.

Serdar Bilgili is the owner of the Istanbul-based real estate private equity firm BLG Capital.