T2 Hospitality Makes Waves with $36.6M Purchase of Plunge Beach Resort

4640-4644 El Mar Drive, Lauderdale-By-The-Sea, Florida, USA - The vibrant community of Lauderdale-By-The-Sea is buzzing with news this week as T2 Hospitality has plunged into the local hospitality market, acquiring the iconic Plunge Beach Resort for a cool $36.6 million. This purchase marks T2 Hospitality’s first foray into South Florida and promises to shake things up in the local tourism scene.

Located at 4640 and 4660 El Mar Drive, the Plunge Beach Resort comprises a five-story hotel with 137 rooms and a two-story motel featuring 26 rooms. Built in the 1950s and 1970s, these structures share a lovely pool deck, creating an inviting atmosphere for guests looking to relax by the water.

A Little Bit of Background

The total area of the Plunge Beach complex spans 96,241 square feet, sitting on a 0.69-acre ground lease managed by Antina Investments III. This strategic location is approximately seven miles north of Downtown Fort Lauderdale, promising both tranquility and access to the city’s amenities. Bank of America was on hand to provide a $27.5 million acquisition loan, ensuring T2 Hospitality had the necessary financial support to complete this transaction.

The sellers of this property, managed by Oleksandr Naumyk and Liubov Tereshko, initially acquired the Plunge Beach in 2013 for $21.6 million, showcasing a notable increase in value over the years. Interestingly, they even transferred the asset to a subsidiary for just $100 back in 2015, which surely piques curiosity about tactical investments in the area.

Historical Context

T2 Hospitality, originally founded as Tarsadia Hotels in the 1970s by Mike Patel, has made its mark primarily within the California hotel market. With a portfolio that includes 13 hotels and two currently under development, the firm is on an expansion streak. In January, T2 sold three properties for a mouthwatering sum of $303 million, indicating that they have their eyes set firmly on growth, even as competitor markets continue to evolve.

Lauderdale-By-The-Sea is increasingly emerging as a hub for hotel investments, as evidenced by recent transactions and ongoing developments. The South Florida hospitality market is booming, with increasing interest seen in areas like Fort Lauderdale where the occupancy rates hover around 72.2% with an average daily rate (ADR) of $180.32, according to Matthews. Market performance has faced some hurdles like declining RevPAR and an uptick in competition, but innovative developments like the Plunge Beach acquisition signal confidence in the area’s potential.

Future Developments on the Horizon

The acquisition of the Plunge Beach Resort comes amidst a wave of new hotel developments in Fort Lauderdale, which has seen exciting projects, including the recently approved 15-story hotel by 42 Hotel Group and a nine-story hotel by New Castle Hotels & Resorts. These developments, pending approval and construction, speak volumes about investor belief in the region’s tourism allure.

Clearly, there’s room for growth in this seaside community, especially as South Florida continues to attract domestic and international travelers alike. As T2 Hospitality combines its expertise with the local charm of Lauderdale-By-The-Sea, it’s an exciting time for everyone involved, from investors to travelers seeking sun-soaked relaxation.

As the local hospitality scene evolves, all eyes will be on how T2 Hospitality enhances the Plunge Beach Resort and contributes to the region’s vibrant tourism landscape.