Canyon Ranch Miami Beach Hotel Sells for $21.6 Million
Canyon Ranch Miami Beach residents should sleep a little bit better at night. The uncertainty of having their beloved building stuck in a whirlwind of negativity has now subsided to a degree with some new news. It’s been a tense few months as the amazing destination resort, based on positive energy, health and well-being, was paralyzed by the gloom and doom of a bankruptcy auction that could easily place the development into the wrong hands. I was personally involved with a couple of different groups that had interest in the auction process, so I was able to hear a wide range of opinions on the state of affairs and potential future of the hotel and amenities. Some of the potential resolutions to the auction were good and some were quite bad. I’m happy to report that I am quite optimistic about the outcome to-date.
The good news is that a winner bidder has now surfaced from the auction of Canyon Ranch Miami Beach. I was delighted to hear that Z Capital Partners won with a bid of $21.6 million, which was above the stalking horse bid of $12 Million by 360 Vox, LLC out of Canada. The winning bid was easily enough to pay off the estimated $17.3 million in liabilities that is owed. There is a word of caution though, the results of auction still need to be approved by a bankruptcy judge on September 12th. So, what is it about Z Capital Partners, based out of Chicago, that has me excited? What is the grounds for optimism?
Superstar Hotel Consultant Involved with New Group
James Zenni, the President and CEO of Z Capital released the following statements about his new acquisition. “Z Capital has an extensive team, which includes Thomas Wicky, who has global expertise in hotel operations, with forty years of experience managing premier resorts and luxury hotels, including with The Boca Raton Hotel & Club, The Breakers Palm Beach, The Cloister at Sea Island, Georgia, The Spas & Grand Hotels Bad Ragaz and Fisher Island in Miami. We are confident we will be able to successfully leverage Tom’s award-winning experience to elevate Canyon Ranch in Miami for the benefit of all the property’s constituents.” Upon hearing this quote, I felt very good for the homeowners of Canyon Ranch Miami Beach and the future hotel guests. Thomas Wicky is simply of one the best hoteliers in the world. He is a brilliant man that I can’t say enough about. In many ways, he is a role model for me in the world of real estate.
Z Capital Partners Strength
I’ll be speaking with Thomas next week about plans for the future of Canyon Ranch Miami Beach. I believe that the ship will now set sail in the right direction. Smart move by Z Capital. The private equity firm appears to have a strong balance sheet with $1.7 billion in assets under management. And with annual revenues of over $1.5 billion, they have staying power to get the hotel back on its feet. I have learned through the years that if you have the proper amount of time, money and intellectual horsepower, just about anything is possible. Barring an all-out World War 3 with Russia or the ISIS, the hotel turnaround should be just fine.
Brighter Future for Canyon Ranch Miami Beach
The assets included in the auction were 13 condo and condo hotel units in total, a prime retail space on Collins Avenue, the hotel operations, the spa, fitness areas, pools and restaurants. Z Capital Partners also inherited the ability to control the hotel operator for the development, meaning that Canyon Ranch Miami Beach could be replaced with an alternate hotel operator. This point is sometimes a misconception by the general public. Most hotel operators actually do not own the real estate of their hotel, they simply run their operations for fees and bring their brand equity to a developer as part of their deal. In this instance, no commitment has been announced yet on the direction of the hotel. I personally have no idea what will happen, but the influence of Thomas Wicky will no doubt yield a significantly improved hotel experience than the status quo.
New development around the area of Canyon Ranch Miami Beach is also improving substantially. Back in 2008, as Canyon Ranch was set to open, most people commented that the CR would be the only ultra-luxury development in the area. I sensed some reluctance, not in the brand, but in the local environment. Things have now changed. Any oceanfront property that can be developed from Miami to Fort Lauderdale is being developed. The nearby Bath Club Estates ultra-luxurious development just announced that they will be selling their penthouse for an astounding $50 million. (Which seems like the IT number since the penthouse at the Faena House sold for that amount). With the all-around improvement of the real estate market and new ownership, the future of Canyon Ranch Miami Beach is looking brighter.