(Carl Cronan is editor of Real Estate Florida.)
MIAMI-Locally based Florida East Coast Realty will start construction in June on the 252-room Sonesta Mikado hotel overlooking Biscayne Bay. The 40-story structure, designed in a style reminiscent of classic Japanese buildings, is scheduled to open sometime in the latter half of 2011.
Tibor Hollo, FECR chairman and president, says he is confident that South Florida's currently depressed tourist market will rebound by the time the hotel is completed. "I've been in this business 60 years, through nine downturns," Hollo tells GlobeSt.com. "This one is stronger than the others, but I believe in the next three years the market will be completely different."
Flagged by the Sonesta Collection and named for Gilbert and Sullivan's famous Japanese opera, the Sonesta Mikado will feature hotel rooms with up to 500 square feet, nearly twice as big as the average, along with 900-square-foot suites. Another 119 luxury residences are planned in the development. Other amenities will include a full-service upscale restaurant, a 12th-floor pool deck, 14,000 square feet of banquet and meeting space, and 45,000 square feet of office space.
The Downtown Miami hotel, at 1701 NE Fourth Ave., will feature Asian elegance touches designed to appeal to guests ranging in age from 25 to 55, Hollo says. "I have seen some of these type projects in California," he adds, "and they are very well received."
Hollo says FECR is covering 70% of the hotel's estimated cost, projected to be at least $100 million, with the other 30% being financed at 1.5% over LIBOR. "We never take more than 40% on a project anyway," he says.
The Sonesta Mikado is the latest commercial project being taken on by Hollo, with others including 2020 Ponce office condominiums in Coral Gables and the Opera Tower residential condo project downtown. He is also pursuing the acquisition of 1101 Brickell Ave., a two-building office development built in the 1970s and '80s.
The buildings' current owner, Leviev Boymelgreen, paid $70 million for the property four years ago with plans to redevelop the site for condos, offices and retail. Hollo will not disclose how much he is offering, though it will likely be far less than the previous purchase price.
"We are looking to reposition the buildings," he says. "The outside looks fairly good, but the inside needs to be upgraded. It will take millions of dollars."
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