A group led by Dr. Kiran Patel of Tampa acquired the 294-room Hyatt Regency hotel in downtown Sarasota earlier this week, the latest in a string of major hospitality deals this year along the Gulf Coast.
Although Sarasota Hotel Acquisition Group LLC’s purchase was recorded at $57.8 million, that amount likely did not factor in furniture, fixtures and equipment, accumulated goodwill, operational supplies and alike.
In all, the full transaction price is believed to be closer to $75 million.
Giant equity fund Blackstone Group had owned the hotel since May 2007, when the New York investment firm spent $65 million to acquire the lodging property.
Blackstone invested $22 million into the hotel the following year, when it was upgraded to a “Regency” flag by Hyatt Hotel Corp.
The hotel is expected to remain a Hyatt going forward.
“The hotel market along the Gulf Coast has been strong, but in Sarasota, in particular, there are a lot of hotels that are set to open in the next year,” says Kent Schwartz, an executive vice president with commercial brokerage firm Colliers International Tampa Bay.
“There will be tough competition ahead, and the Hyatt is not the newest property in town. It’s a great location, though, and a great place to hold events because of the size of its ballroom and meeting space.”
More than 800 new hotel rooms are slated to open in downtown Sarasota in the coming year. Most notably, a 255-room Westin Hotel is expected to debut sometime next year less than a mile from the Hyatt Regency.
Neither Patel nor Blackstone officials could be reached for comment on the sale, and officials from commercial brokerage firm Holliday Fenoglio Fowler L.P., whose Tampa office represented Blackstone, declined to comment.
Patel, a physician who founded and was chairman of WellCare of Florida, has been a real estate investor for more than a quarter century.
In February, his 450-room Wyndham Grand Hotel & Beach Resort is scheduled to open on Clearwater Beach. Patel also owns a 700-room Wyndham in downtown Pittsburgh, and the 241-room Westward Look hotel in Tuscon, Ariz.
The Hyatt Regency sale also comes as hotels throughout the Gulf Coast are receiving heightened investor interest, fueled by tourism gains, increased consumer discretionary income and other solid industry fundamentals.
Last month, for instance, Chicago-based Walton Street Capital spent roughly $50 million to acquire the 299-room Westin Tampa Harbour Island. That deal followed a $101 million transaction that put the 520-room Tampa Hilton into CrossHarbor Capital Partners’ portfolio.