Florida Keys News
Friday, August 30, 2013
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Hotel group sells for $184M
LaSalle company purchases Southernmost Hotel Collection

Sweeping changes to the lodging landscape of Key West continued this week with the $184.5 million sale of a downtown hotel collection.

LaSalle Hotel Properties announced in a statement released Wednesday its purchase of the 260-room Southernmost Hotel Collection, which includes the Southernmost Hotel, Southernmost on the Beach and La Mer and Dewey House guesthouses. The deal also includes Southernmost Beach Cafe, the restaurant on South Beach at the foot of Duval Street that hotel operators lease from the city.

The hotel collection was on the market fewer than four months, and was listed shortly after the Pier House Resort -- at the other end of Duval Street -- sold for $90 million.

The Southernmost Hotel Collection will be operated by Highgate Hotels, according to the statement from LaSalle.

Representatives from the Southernmost Hotel Collection were not immediately available for comment late Thursday, but Dale Rands, a managing partner of the owners' group that sold the hotels, told The Citizen in May that, "There's an excellent chance that the vast, vast majority of our staff will be retained, and we've been very candid with our employees about the sale.

"The ownership group has owned the collection since 1985 and we're not getting any younger," he said then. "We decided it would be a good time to develop an exit strategy. We've adored this business and it's important to us that it gets into the right hands."

The original Southernmost Hotel, which this year celebrated its 65th anniversary, has undergone $13.8 million in renovations over the past three years.

"We are very excited to have acquired this unique, extremely well located asset," said Michael D. Barnello, president and CEO of LaSalle Hotel Properties. "The property is located on the ocean in one of the strongest U.S. markets and features an attractive variety of amenities and offerings. Furthermore, the asset is in excellent condition with more than $50,000 per (room) key invested in renovations and construction over the last three years."

The announcement from LaSalle touted Key West as "an extremely supply-constrained market," meaning the number of hotel rooms remains steady and limited. The supply of hotel rooms has increased by less than 1 percent annually since 1992, the LaSalle release states.

"The combination of low supply growth and strong leisure demand has resulted in strong results for the Key West lodging market," it states.

Information about staffing or pending changes at the properties was not immediately available.

mmiles@keysnews.com

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