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Six Key West guest houses sell for $109 million in one of the city’s largest deals

The Key Lime Inn is one of the oldest buildings in Key West, dating back to 1854.
The Key Lime Inn is one of the oldest buildings in Key West, dating back to 1854. Historic Key West Inns

A collection of Key West inns has sold for $109 million to a San Francisco-based firm in one of the largest property sales ever recorded in the Southernmost City.

The deal, announced this week by the real estate firms involved, including Knight and Gardner Realty in Key West, handed Historic Key West Inns — with 222 guest rooms at six inns — over to KHP Capital Partners, a real estate private equity firm that focuses on boutique and independent hotels in North America.

The inns are the Key Lime Inn, Lighthouse Court, Albury Court, the Merlin House, the Chelsea House and the Cypress House, all in the Old Town neighborhood of Key West.

The seller is Julie Fondriest, who began putting together the lodging portfolio in 1997, and her ownership team.

“The transition will be a smooth one with no interruption at the properties or to the guests,” said Will Langley, of the team that brokered the sale, the Gardner-Langley Team at Berkshire Hathaway HomeServices Knight and Gardner Realty,

The real estate broker team announced the sale as the largest commercial sale recorded in not only Key West but the entire Florida Keys, but the Monroe County Property Appraiser’s Office provided a list that included the sale of the Southernmost Hotel Collection, a total of 260 rooms, in 2013, for $184.5 million.

“These are guest houses, they are a little different,” said Dee Dee Harnish, director of valuation services for the property appraiser’s office. “It is a big number per room. It’s not like the Casa Marina or big flag hotels we’ve seen. We haven’t seen anything like this, I would have to agree.”

The Key Lime Inn, 725 Truman Ave., has 37 rooms and was taking reservations Wednesday at rates starting at $249 a night.

The hotels have colorful histories. The main building of the Merlin House, 811 Simonton St., was built in 1930 as a rooming house for Navy personnel stationed at Fort Zachary Taylor, according to its website.

“The rooming house at the Merlin Guest House has been through many incarnations over the years, from gambling house to bordello, and is now back to offering beautiful and respectable guest accommodations,” the site states.

Cypress House is at 601 Caroline St.; Albury Court, at 1030 Eaton St.; Lighthouse Court, at 902 Whitehead St.; and the Chelsea House, at 709 Truman Ave.

Other recent hotel sales come close to the $109 million price tag for Key West Historic Inns.

The Marker resort, with 96 rooms, sold for $96.5 million in 2015, and Sheraton Suites, with 184 rooms, sold in 2015 for $94 million, according to the property appraiser’s office.

Knight and Gardner Realty is in Key West while Berkshire Hathaway HomeServices is based in Irvine, California.

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