Sales  ·  Hotels

California Investor Nabs Boutique Miami Beach Hotel for $20M

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Private investor Anish Khimani snapped up an Art Deco hotel in Miami Beach for $20 million, with plans to lease it to a short-term rental operator, Commercial Observer has learned.

The Tropics Hotel, a three-story building featuring 70 rooms and a pool, was erected in 1941 at 1550 Collins Avenue, south of 16th Street. 

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Khimani, through Bay Area Lodging LLC, used a 1031 tax exchange, paying $15 million in cash and receiving a $5 million, five-year mortgage from the seller, Swiss investor Armando J Opprecht. The deal closed June 29, according to Susan Gale of the Gale Group International at ONE Sotheby's International Realty, who brokered the transaction and declined to name the seller and buyer.

Opprech bought the three-story hotel in 1992 for $1.2 million, property records show.

Khimani, who’s based in California where he owns a few boutique hotels, plans cosmetic upgrades, including updating the furniture, and has already struck a deal with Red Group to lease the building, Gale said. The Miami Beach-based property management firm will operate the property as short-term rentals.

The Miami Beach hotel market has picked up in recent weeks. Earlier this month, the Nakash family, which owns the mansion previously the home of the late fashion designer Gianni Versace, paid $23.5 million for The Beacon Hotel South Beach on Ocean Drive. 

But some larger deals have collapsed because of interest rate hikes. In June, Richard Meruelo called off his $200 million buyout of the Casablanca on the Ocean Hotel oceanfront condo, which he planned to convert into a hotel, citing “difficulties and uncertainty in the capital/debt markets.”

Julia Echikson can be reached at jechikson@commercialobserver.com