Cayman hotels for sale

Friday, September 25, 2003

GEORGE TOWN, Cayman: Large investment groups are keeping a close eye on the hospitality industry, in the Cayman Islands, which would boost another aspect of local real estate. 
The Cayman Islands hotel real estate market is attracting considerable interest from United States investors, with the Hyatt Regency reportedly already under an option to purchase, and the Marriott and Treasure Island resorts attracting multiple serious inquires, the Cayman Net News has reported.

The 309-room Grand Cayman Marriott Beach Resort has been exclusively placed for sale with Jones Lang LaSalle Hotels, a leading hotel investment group that operates in more than 100 markets on five continents.

Offered in an "open market campaign," meaning that there will be no set asking price, the Marriott's ownership reverted from a company owned by the Yung family, present owners of the Westin and Holiday Inn properties along Seven Mile Beach, to Chicago-based LaSalle Bank last May.

Jones Lang Senior Vice President, Mr. Gregory Rumpel, thinks the hotel's chances of selling within the 270-day period of their listing are high. 

"I believe there will be a tremendous amount of interest in the property," he said, "I am very enthusiastic about the prospects. The initial feedback we have received from investors is quite positive," he told CNN. "Equity chasing investors are looking for good deals, in a good location with high barriers to entry and a solid market. These are all aspects of the Marriott property."

Good air transportation is also making this country highly desirable according to Mr. Rumpel. "The Caymans have terrific airlift compared to other Caribbean destinations," he said, adding that direct flights by Cayman Airways to places like Chicago make it easier for investors to get here.

Another key advantage to the Marriott property according to Mr. Rumpel is that investors will not be obliged to keep the Marriott name if they buy the property. "Unlike the Hyatt, the Marriott property is unencumbered by a long-term management contract," he said, "This expands the number of management and branding opportunities for the investor."

With regard to the beach erosion problem occurring on the southern end of Seven Mile Beach, including at the Marriott, Mr. Rumpel indicated that he was not overly concerned that it would hinder a sale. "We are quite optimistic that the three-phase system that has been implemented by the Government will remediate the situation," he said, referring to the plan to renourish the beach with sand, to use measures like reef balls to arrest further erosion, and to change planning laws so that over time, nature can take its course in replenishing the beach.

The Marriott is not the only local hotel that is for sale and attracting interest. Reliable sources have confirmed that a Chicago-based group has signed an 'option to purchase' the Hyatt Regency hotel with London-based AMEC Plc., for US$39 million. The option expires on 10 November, during which time the group will seek investors to complete the deal.

The Treasure Island Resort, which went into receivership on 5 September, has also already garnered serious inquiries "by more than one party" according to Mr. Bruce John, one of the two appointed receivers for the property.

The parties interested in Treasure Island have nothing to do with Cubanacan, the Cuban tourism organization that Leader of Government Business and Minister of Tourism, Mr. McKeeva Bush said he was trying to deal with in order to help raise the occupancy rates at the hotel.

In the meantime, the Treasure Island continues to operate without having had to lay anyone off so far. "The bank is making the attempt to change the fortunes of the hotel to improve the prospects of its sale and to increase the value of the property," said Mr. John, adding that they have been targeting investment and marketing groups that are known to be interested in large properties with their advertising.

Yet another property that could be purchased is the Grand Caymanian Resort. "The resort is not on the market," said Managing Director Mrs. Theresa Foster, "but like everything else, for the right price it might be sold."

Reliable sources have told Cayman Net News that the right price with regard to the Grand Caymanian would be $20-$21 million, with another $6 million for the adjoining property where the second phase of the project is planned to be built.

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