Arte Hospitality completes buyout of Ocean Drive condo-hotel, scores loan

Russell Galbut sold the remaining units to Shadi Shomar-led partnership

From left: Shadi Shomar, Russell Galbut, Renata and Cesar Giovannini with 510 Ocean Drive (Arte Hospitality, Lynx Property Services)
From left: Shadi Shomar, Russell Galbut, Renata and Cesar Giovannini with 510 Ocean Drive (Arte Hospitality, Lynx Property Services)

Investor Shadi Shomar and his partners completed the bulk purchase of a South Beach condo-hotel and secured a $36 million loan for the property.

Shomar-led entities had paid $28 million in 2019 for the majority of the units — 39 residential and four commercial condos — that make up the Bentley Hotel South Beach at 510 Ocean Drive. Companies tied to Russell Galbut’s Crescent Heights sold the property.

Shomar and his partners, Renata and Cesar Giovannini of Arte Hospitality Group, recently acquired the remaining 15 residential units for about $6.5 million, Shomar said. That allows the buyers to terminate the condo association.

Ocean Bank provided the financing, of which about $6 million will be used to renovate the Miami Beach hotel. Attorneys Michael Gallinar and Jason Camps of Adams Gallinar represented the borrowers in securing the $36 million loan.

Shomar said he and his partners are renovating the lobby, restaurant, courtyard and pool and will continue running the Bentley as a hotel. The building, which has a rooftop pool deck, is home to a TGI Fridays on the ground floor. The condo-hotel was built in 1939.

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Nearby, the Balfour Hotel at 350 and 344 Ocean Drive traded in September for $39.3 million, or about $485,000 per key. A company tied to Toronto, Canada-based private equity firm Catalyst Capital Group bought the hotel, which was subject to an out-of-court UCC foreclosure about two years ago.

Arte Hospitality, led by Shomar and the Giovanninis, also manages Galbut’s Kaskades Hotel at 300 17th Street in Miami Beach.

Last month, Galbut’s Crescent Heights secured approval to build an addition at the Regent hotel, one of two Art Deco buildings that make up the Gale Miami Beach.

Shomar said Arte Hospitality is looking to acquire additional hotels. The hospitality market is experiencing strong demand across South Florida, especially luxury hotels and restaurants. Average daily rates are especially high with Art Basel beginning next week.