This is the second part of a two-part series on the upcoming proposed hotel in Wilton Manors, speaking directly with the developer of the project.
Why Wilton Manors?
To recoup the investment, anything built on the beach must be at a luxury price point. Searching for a deal, Investors started looking in downtown and headed north. Urban lifestyle living, like Las Olas or Flagler Village, is hot in Fort Lauderdale. Wilton Drive, already gentrified, got the attention of the investors and they found a deal to die for.
In his 40 years of real estate investing, this is the first time Mark Ellert, the developer of the property, ever owned a funeral home. “As I joke, I suggested having a shaman come through and sage the place before we break ground.”
The soon-to-be-demolished mortuary sits on an unusually shaped parcel. It’s sort of “Z” shaped, which causes inefficiencies in the architectural design. Due to this odd configuration, the future ground-level multi-story garage requires extra reinforcement for enough structural support to hold the tower where all the rooms are going. The quirky shape is driving up the cost of construction a lot more.
“We tried to obtain the empty parcel next door, which is owned by the Kalis family. They wanted to do a land-lease,” Ellert said.
The owner of the empty lot though has a different recollection of their negotiations.
“He came in with a real low-ball offer. We also talked about a property swap if he could find me a comparable piece of property,” said Ed Kalis, who also owns the parcel nearby where the Wells Fargo bank sits - on a land-lease.
According to Ellert, after negotiating with Kalis for months, the investors had difficulty acquiring necessary financing for the project unless they owned the land that they planned to build on. They dropped it and moved forward with the unusually shaped piece they have now.
This strip of Dixie Highway is also ripe for redevelopment.
City Commissioner Chris Caputo noted Wilton Manors already has the lowest vacancy rate on retail spaces around. He believes the properties in the emerging Art/Theater district will grow in value once the hotel opens.
What Happens in a Crash?
If there’s a crash and the hotel goes into foreclosure, what’s the likelihood of a Motel 6 or similar discount option might replace it? It would be nearly impossible to recoup the building’s expenses with a budget-brand’s business model. A discount chain would have a difficult time obtaining financing to purchase the hotel based on their projected income.
Ordinarily what happens is a new investor group swoops in and rebrands with a comparable hotel franchise. Laterally rebranding, the vibe would go from steak to lobster, not steak to hot dogs.
When pressed about this possibility, Ellert had this to say, “Obviously, I don’t want to think about outcomes like that. I really have an affinity for this project and we want the community to embrace this venue.”
Read Part 1 Here.