A group of Florida investors led by developer of Miami condos Jorge Perez of the Related Group is in the final stages of negotiating the purchase of a distressed downtown Pittsburg Hilton Hotel. This deal shows a new direction for the embattled developer.
Shubh Hotels is the seller of the 50 year-old Hilton which is a private real estate investment and asset management firm in Boca Raton that bought the facility for $28 million in 2006.
The 25-story hotel is the largest in Pittsburgh with its 713 rooms and 45,000 square feet of meeting space.
Perez is joined in the deal by majority Miami Dolphins owner and president and chief executive of New York-based The Related Companies, Stephen Ross, as well as Kiran Patel, a Tampa-based cardiologist and philanthropist.
The Related Group is participating as an operating partner, as the nation's largest and prominent Miami condos developer looks for new business opportunities in a deteriorating development market.
The details have not been disclosed.
Symbolic Property
Perez said in an e-mail, “The Hilton is an iconic property in Pittsburgh in need of some dollars to bring it back to the prominence it once had.” “We plan on making the necessary improvements and holding this asset for long-term appreciation.”
In addition to a new swimming pool and spa and exercise facilities, Perez said Related would spend more than $5 million to complete a previously planned expansion of the meeting hall, convention space, lobbies and exteriors.
Other Projects
The acquisition comes amungst speculation of the Related Group's financial footing and other liabilities Perez may be facing as a result of his firm's ailing projects.
“What this [the Pittsburgh deal] tells me is that he's obviously resolved his issues with lenders down here so that he's able to look to new opportunities,” said Thomas Lehman, a managing partner and co-chair of the bankruptcy and receivership group for the Tew Cardenas law firm in Miami.
Many of Related's South Florida Miami condos, including the $1 billion ICON Brickell complex, have suffered in the housing downturn. The company announced last month it was reducing sale prices in ICON by 30% in hopes to get buyers to close.
Related Group is working very hard with its lenders to resolve problems, similar to other Miami real estate developers, Perez said.
Contributed by MLR Realty
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