The famed Delano hotel, a South Beach trailblazer that revitalized the market when it launched in 1995, is for sale.
Owner Morgans Hotel Group enlisted Jones Lang LaSalle Hotels to market the property, the brokerage confirmed Wednesday. Morgans plans to continue managing the hotel and move forward with expansion plans, such as the recently announced deal to open a 73-room Delano this September in Marrakech, Morocco.
The company wouldn’t answer questions about the decision to list the 194-room hotel for sale or how much the property might fetch.
“Over the last few years, Morgans Hotel Group has shifted strategy to ensure that we remain a top lifestyle hospitality brand,” CEO Michael Gross said in a statement. “An asset-light model with long-term management agreements allows us to increase our investment in the development of Morgans’ key brands, and accelerate their growth both domestically and world-wide. As always, we will continue exploring opportunities that represent the best interests of our stockholders, employees and guests.”
Real Estate Alert, an industry newsletter, broke news of the listing Wednesday and said the property at 1685 Collins Ave. has a market value estimated around $200 million. Miami-Dade County property records show the assessed value is just over $55 million.
Morgans, which is based in New York, has been selling off its properties in recent years to focus on developing and managing hotels without the cost of owning them. Since spring of 2011, the company has shed hotels in New York, London and Los Angeles. It owns, has a stake in or manages 12 other properties around the world, including the Shore Club and Mondrian South Beach; other expansion plans include Mondrian hotels in Marrakech, Turkey, Qatar, London and Nassau as well as a Hudson in London.
Nearly a year ago, Gross told analysts in an earnings call that he didn’t expect to aggressively market the Delano to potential buyers. The hotel is a top performer for the company, commanding average daily rates of $591 in the first quarter of 2012, at 71 percent occupancy.
Late last year, Morgans poured nearly $11 million into renovations at the hotel that wrapped up in March. Changes included a new restaurant concept, Bianca; a new nightclub, FDR; upgraded bungalows and suites; spruced-up public areas including the Rose Bar and pool and beach bars, and the addition of 1,200 square feet of meeting space.
In a December interview with The Miami Herald, Gross called the Delano “a cornerstone of not just our Miami presence, but our company overall.”
When it relaunched in 1995 after a makeover from hotelier Ian Schrager and designer Philippe Starck, the Delano was a trendsetter. But observers have pointed out that the buzz has shifted over the years to new hot spots such as the Setai and W South Beach a few blocks north on Collins.
The latest arrival to the party: the nearly $85 million SLS Hotel South Beach across the street from the Delano, which opened in June. It, too, is designed by Starck.
Peter Zalewski, a principal with real estate consultancy Condo Vultures, said now is a good time for a seller to test the market.
“Going forward, the competition is only going to get heightened,” he said. “And the competition starts across the street at the SLS.”