The three families that own Ritz-Carlton hotels in South Beach and Bal Harbour, as well as the Sagamore Hotel in Miami Beach, merged ownership of their properties.
The Ben-Josef Group, which owns the Sagamore, and partners Flag Luxury Group and Lionstone Group, which own the two Ritz-Carltons, secured a joint merger, and could bring the Sagamore under the Ritz-Carlton flag, said Diego Lowenstein, Lionstone Group CEO.
At the same time, Lionstone and Flag closed on a $230 million refinance of The Ritz-Carlton, South Beach at 1 Lincoln Road, Lowenstein told The Real Deal. The lender is Deutsche Bank and BHI USA (Bank Hapoalim).
The hotels are all oceanfront. Together, the three properties total more than 600 hotel rooms. The Ben-Josef, Kanavos and Lowenstein families will co-manage the new joint venture. The three hotels reopened in July, and a $90 million renovation of the Ritz South Beach was completed in February.
The Ritz-Carlton, Bal Harbour (Credit: Flag Luxury Group LLC)
The Sagamore, at 1671 Collins Avenue, and the Ritz South Beach are next to each other.
The families’ ties go back decades. Principals Dayssi Olarte de Kanavos of Flag Luxury Group and Ronny Ben-Josef have known each other since high school. Lowenstein said that Lionstone and Flag had looked at acquiring the Sagamore “several times over the past decade” and began talks with the Ben-Josef family earlier this year, prior to the pandemic.
“From an asset standpoint and an economic standpoint, it made all the sense in the world,” Lowenstein said.
His family has owned The Ritz-Carlton, South Beach since the early 1970s. The Ben-Josef Group partnered with InSite Group to acquire the Sagamore in 2016 for $63 million, and InSite Group later sold its position in the property, according to its website.
Lowenstein said the new joint venture ownership is planning a full renovation of the Sagamore, keeping its focus on art. It’s expected to be completed in 2022, and will be managed as part of The Ritz-Carlton, South Beach.
“We’re keeping a lot of the legacy of the Sagamore intact,” Lowenstein said, adding that the families plan to hold onto the properties for generations. “Unlike many other hotels that have traded and flipped over the years, we’re very much generationally minded.”
The hotel market nationwide has struggled throughout the pandemic, as international and domestic travel remains low. A number of properties have closed or are in the foreclosure process. Lowenstein said there are “tremendous opportunities” to acquire more hotels due to the pandemic.
But he is also optimistic about the hospitality market recovering in Miami, pointing to an increase in travelers to warmer climates.
“December and the early months of 2021 look very promising,” he said.