Carey Watermark Buys Hawks Cay Resort in Florida Keys for $149M
- Oct 25, 2013
Carey Watermark Investors Inc. has added the Hawks Cay Resort on the isle of Duck Key in the Florida Keys, to its portfolio in a transaction valued at $149.4 million. The hotel and resort REIT acquired the property, which features 177 guestrooms and 250 villas under a residential resort management program, from a partnership involving Behringer Harvard.
Hawks Cay is one of those properties. In addition to its guestrooms, the 31-acre destination features an 85-slip marina, 10,000 square feet of retail and office space, 14,800 square feet of meeting space and a 7,000-square-foot spa. And it has no lack of visitors.
“The Florida Keys lodging market is the second highest RevPAR market in the United States,” Michael Medzigian, CEO of CWI, told Commercial Property Executive. “Demand is linked to the desirability of the Keys and its resorts, various water-oriented activities including world-class fishing, as well as ease of access as compared with other resorts in the Caribbean and outside the United States.”
It’s been several years since Hawks Cay last changed hands, and its value has certainly gone on the upswing in the interim. Joint venture partners Behringer Harvard, Northview Hotel Group and Five Star Realty Partners snapped up Hawks Cay for approximately $79 million in 2007, and followed the purchase with a $42 million renovation of the asset at 61 Hawks Cay Blvd., which was originally developed in 1959 and expanded in 1972.
In the transaction between the Behringer partnership and CWI, the price tag on Hawks Cay consisted of a $133.8 million purchase price and an additional $15.6 million for acquisition-related costs and planned capital improvements that will include the creation of 16 family suites. CWI relied on $79 million of debt to partially finance the transaction. Lenders took note of the opportunity. “There is significant demand for conservatively underwritten loans on high quality lodging assets in leading markets with leading owners,” said Medzigian.
Hawks Cay marks CWI’s second big resort purchase in three months. In July, the REIT invested $73.3 million on the acquisition of a 75 percent joint venture interest in the 226-room Fairmont Sonoma Mission Inn & Spa. And who knows what the remainder of the year will bring. “We evaluate many potential investment opportunities to identify those that meet our investment criteria,” Medzigian added.