Real estate titan Donald Trump said Wednesday that he’s buying the Doral Golf Resort and Spa in the Miami area for $170 million.
Trump said he’ll invest more than the purchase price to restore the property to “its original health.”
In a phone interview with the SunSentinel, Trump confirmed reports that first appeared Wednesday in the Wall Street Journal.
“We’ve made a contract to purchase,” he said, expecting the deal to close “in the not too distant future.”
Trump’s company has been buying up golf properties in the past couple years, including ones in the Washington D.C. and Philadelphia areas. “We’ve turned them around and made them successful,” he said.
The company also wants to build on its presence in Florida, where its properties include the Mar-a-Lago club in Palm Beach, the Trump International Golf Club in West Palm Beach and partnerships on residential towers in the Miami area and in Hollywood, said Trump.
“In Florida, we’ve had a lot of luck,” Trump told the SunSentinel. “The Trump Hollywood is doing fantastically well, selling very well.”
Being acquired is a well-known property put into bankruptcy this year by hedge fund Paulson & Co. and Winthrop Realty Trust. Doral is home to a prestigious, annual PGA golf tournament played each spring on the Blue Monster course.
Winthrop and Paulson foreclosed on five resorts including Doral in January and put them into Chapter 11 reorganization in February. Morgan Stanley’s CNL Hotels & Resorts had owned the five properties.
Trump said he is not looking to buy the other four resorts, which are located outside of Florida. But he is interested in other deals in the Sunshine State.”We have a lot of cash,” he said. “We’re buyers.”
The Wall Street Journal said the purchase agreement is a sign that Trump is returning to a strategy of risking his own capital on real estate investments. In recent years, he has largely avoided borrowing or investing his company’s money in projects. Instead, his company focused on licensing deals, with Trump lending his name to luxury apartment and hotel deals as a way to boost their sales.
Trump had licensed his name to a project on Fort Lauderdale beach that never opened. He reiterated Wednesday that his company pulled out of the Fort Lauderdale deal years ago.
In Doral, Trump’s company will take over a 700-room resort and four of five professional golf courses. Trump said he has no plans to add residences to the project west of the Miami International Airport. “We’re looking at it only as a resort,” Trump said.
Hotel analyst Scott Brush said Trump appears to be getting “a very good price” on the property, which includes convention facilities as well as the resort and golf courses. He said the property had not been kept up in recent years, as its core business hosting luxury groups soured with the economic slump.
“To operate at the high-end of the meetings business, you have to really spend money to keep the property at the peak of conditions, and they didn’t,” Brush said. Properties with insufficient maintenance can’t command top dollars and can’t reinvest to stay in top shape, he said.
Brush said the deal underscores the attractiveness of big, iconic resort properties for investors with deep pockets. Yet he said smaller hotels such as roadside Holiday Inns still aren’t selling much. “That level of developer can’t get the financing. The only ones that can get the financing,” said Brush, “are big groups.”
http://myrealoption.com/Blogs/trump_i'm_buying_miami_area_resort_for_$170_million.html
by Doreen Hemlock on October 13, 2011
