In another sign that the South Beach hotel market has reached superheated status, fashion designer Tommy Hilfiger has just purchased the iconic Raleigh Hotel just over a year after it last sold. The purchase price: a cool $56.6 million USD.
Hilfiger told Women’s Wear Daily that he plans to turn the property, which he called “a bit dated,” into a “five-star chic hotel with all the amenities.” The New York Post’s Page Six reported that he plans to add an exclusive club element to the hotel.
David Edelstein, developer and owner of the W South Beach, and Sam Nazarian, the founder, chairman and CEO of Los Angeles-based sbe, bought the property at 1775 Collins Ave. in December of 2012 for $55 million. Before that, it sold in 2009 for $30 million.
According to a statement released on behalf of the sellers and Hilfiger, conversations about the deal started during Art Basel Miami Beach last year.
“The Raleigh is an incredible hotel with a very special place within the Miami market,” the designer said in the statement. “As reported, we’re actively working towards making it our flagship property under my new company, Hilfiger Hospitality. Once the purchase is complete, we will share my team’s vision to bring The Raleigh brand to life in a way that hasn’t been done before.”
The hotel is operated by sbe, which also operates the SLS Hotel South Beach and the Redbury. A spokeswoman said sbe will continue to manage the hotel and Restaurant Michael Schwartz will stay open.
Renovations are planned for the 105-room hotel, which was built in 1940. That process will likely start in January of 2015 and Hilfiger will play a “leading role,” the statement said.
In the statement, Edelstein said he looks forward to working with Hilfiger through the course of the project.
“When Tommy described his vision for Hilfiger Hospitality and his plans to launch it as a global concept, we agreed The Raleigh, with its international recognition and following, was the perfect property to serve as the launching pad,” he said.
The owners had originally been looking to bring in another investor to the hotel, but the chance instead came up to sell outright. Commercial real estate investment banking firm HFF was brought in to market the investment opportunity.
Max Comess, a director in the hotel group at HFF, said Hilfiger’s plans are another sign of “this insatiable investor appetite to be in Miami beach if you’re in the lifestyle hotel business.”
“Tommy Hilfiger is obviously an iconic name in fashion, art, music and entertainment,” Comess said. “And these are the very same drivers that are behind the substantial growth of Miami Beach as a global hotel market, so it makes sense that the most iconic name in those areas would be attracted to what is arguably the most iconic single hotel in Miami Beach.”