Russell Galbut, WP Carey sell Shelborne South Beach
King Street Real Estate, Westdale and Cedar Capital acquired the majority of the units
UPDATED, Feb. 4, 5:27 p.m.: W.P. Carey and Russell Galbut sold the oceanfront Shelborne South Beach, which was marketed for sale in the $120 million range, The Real Deal has learned.
A joint venture between King Street Real Estate GP, Westdale Properties and Cedar Capital Partners acquired the majority of the condo-hotel rooms at the 257-key condo-hotel at 1801 Collins Avenue in Miami Beach. W.P. Carey, a real estate investment trust, and Galbut, a principal of Crescent Heights, sold 218 units.
Property records show that an affiliate of Westdale has also acquired about 30 units from individual owners. The deed for the 218 units has not yet been recorded online.
The Shelborne was expected to sell in the mid-$500,000s per key, which comes out to about $120 million, according to a source. The property sold for $120 million, according to a press release.
Christian Charre, Paul Weimer and Jennifer Jin of CBRE represented the seller. Weimer declined to comment on the deal.
Galbut and members of his family have been involved in the hotel for decades. His nephews Keith Menin and Jared Galbut worked the front desk, as one of their first jobs in the industry.
The hotel was at one point managed by Wyndham, until Menin Hospitality took it over in 2016. Menin will manage the property following its sale to Westdale Cedar Capital.
Galbut and some of his partners in the hotel were also accused of authorizing illegal assessments to renovate and repair the hotel, but they won a five-year litigious battle centered around the assessments in 2017.
Paul Kanavos, chairman and CEO of Flag Luxury Group, was also an owner of the property at one point, though it’s unclear if he was among the most recent group of sellers.
W.P. Carey became involved in the Shelborne when the REIT provided a $125 million construction loan for the property in 2012 and became an equity partner in the redevelopment, according to public documents. In October 2017, W.P. Carey became a managing member in the property.
The historic Miami Beach hotel was built in phases, first in the 1940s. The waterfront property includes a 17-story tower and a 10-story building, which were designed by architects Igor Polevitzky and Morris Lapidus. It has more than 30,000 square feet of event space that includes a grand ballroom, an executive boardroom, breakout rooms, an outdoor terrace, and flexible indoor and outdoor space, according to its website. The property also has a pool with cabanas.
The hotel was damaged during Hurricane Irma to the tune of an estimated $31.2 million. It was repaired and renovated before it sold.
Galbut has been selling his Miami Beach hotel portfolio. Last year, in August, companies tied to Menin and Galbut sold the shuttered Sanctuary Hotel at 1745 James Avenue for $14.4 million to Blue Road, and in July, Galbut sold the Bentley Hotel on Ocean Drive for $28 million.
Galbut and Menin also listed the Kaskades Hotel, which is managed by short-term rental operator Domio, for $15.8 million, or over $600,000 per key.
An earlier version of this story did not mention some of the joint venture partners who purchased the property.