Hodges Ward Elliott (“HWE”) is excited to present an unparalleled opportunity to acquire the Beachside Resort & Residences (the “Hotel”, or the “Property”), a distinctive 222-key luxury, waterfront property located on the northern edge of renowned Key West, Florida. This distinctive condominium-hotel features a total of 131 condominium units, including 129 full-kitchen accommodation units (which can be rented as 222 separate keys, offering a total of 279 bedrooms) and two commercial units. Opened in 2007, the Property delivers an exceptional range of amenities, including a resort-style pool with stunning water views and a poolside restaurant, over 12,000 SF of event space including the largest ballroom in the Keys, Tavern N Town, an award winning fine dining restaurant & bar, on-site bike and watercraft rentals, a state-of-the-art fitness center overlooking the bay, and a 14 slip marina. The Beachside Resort & Residences stands as an iconic, self-contained destination for both relaxation and adventure, perfectly situated in one of the most sought-after locations in Key West.
| Address | 3841 N Roosevelt Blvd, Key West, FL 33040 |
| Keys | 222 |
| Stories | 4 Stories for residential unit buildings (3 stories above parking); 2 Stories for commercial building |
| Built / Renovated | 2007 / 2012 |
| Class | Luxury |
| Acreage | 7.63 AC |
| GBA | 480,407 SF |
| Meeting Space | 13,123 SF |
| F&B | Tavern N Town Chicken Walk Tiki Bar (mid-2025 completion anticipated) |
| Amenities | Beach Access (Direct) Downtown Shuttle Service Convention Center / Event Space Fitness Center Ocean Marina Outdoor Pool On-Site Bike & Watercraft Rental |
| Parking | Garage Parking below residential unit buildings (currently charged at $25 a night); Separate parking structure attached to the commercial building controlled by owner of commercial unit |
| Management | Owner-Affiliated |
| Brand | Independent/Unencumbered |
| Interest Conveyed | Fee Simple Ownership of the two (2) Commercial Units and 87 Resort Units (rentable as 146 keys), and all rights in and to the submerged lands lease upon which the marina is constructed. The balance of the Resort Units are owned by third parties (all of which have executed rental management agreements with the Owner-affiliated rental management company) |
| Labor | Non-Union (all employees are employees of management company or subcontractors) |
Property Highlights
High Barrier-to-Entry Market/Irreplaceable Location
The Keys are widely known as one of the most difficult places to develop in the world keeping long-term supply growth low. The Resort benefits from a prohibitive development entitlement process in the City of Key West and the Florida Keys, which permits a limited number of residential units within a certain distance and creates insurmountable barriers to entry for future development. Due to the Rate of Growth Ordinance, or ROGO, barriers to entry in the Florida Keys are greater than those found in major markets like New York city, London or Paris. From 2009 to 2019, the Florida Keys had an annual supply growth CAGR of 1.0%. There are currently only two significant hospitality projects, consisting of 258 keys, in the development pipeline across all the Florida Keys.
Fully Unencumbered Asset
The Property is offered completely unencumbered by brand and management. Currently operated by Seller's affiliate, Brightwild, under a vacation rental model, and previously operated as a Marriott franchise, the opportunity exists for the purchaser to pursue any number of operational strategies. These strategies, could include returning the Property to a franchise model with an international brand, pursuing one of a myriad of soft or lifestyle brands, remaining under a vacation rental model with Brightwild or another operator, or pursuing an independent hotel strategy.
Irreplaceable Real Estate/Discount to Replacement Cost
Development in Key West is regulated by the Rate of Growth Ordinance or ROGO. ROGO was instituted to limit growth in the Keys and ensure that proper evacuation times in the event of major hurricanes are maintained. ROGO has codified a system under which a developer must acquire transferable development rights (“TDRs”) in order to build new residential or hospitality / hotel units. The number of TDRs in the City and the County is capped, with fewer available for purchase and development each year.
As a result of this increasing scarcity, the value of the TDRs has risen dramatically in recent years and currently frequently exceeds $350,000 per TDR/unit. Thus, in addition to the acquisition of land, a developer must acquire the TDR’s necessary to develop the desired number of units for a given project. Density restrictions and other land development regulations further limit development and increase the cost. Given the scarcity of large potentially developable parcels in the Keys resulting in high land prices, plus the TDR acquisition costs and other administrative costs, land and entitlement costs can approach $500,000 per unit in the most desirable locations before even beginning construction on a project. As a result, to build a luxury quality hotel comparable to the Beachside Resort & Residences today in Key West would likely cost between $1,500,000 and $2,000,000 per key, thus making it cost prohibitive to construct new inventory in the market, and making the Property virtually irreplaceable. Based on the expected trade range the Property will sell for a significant discount to today’s replacement value, accruing a long-term competitive advantage to the purchaser.
Extremely Limited Supply Growth with Demand Stabilizing
There is a new project on Stock Island that has been approved for 148 keys, but is not yet under development. Except for this potential development, there is very limited supply coming on-line in the Keys market. Lack of supply, increased airline capacity, return of the international customer, and the stabilization of domestic leisure travel in 2025 will bolster the Florida Keys as one of the top lodging markets in the country.
Key West Remains Top U.S. Lodging Market
Despite softness across the Key West lodging market in 2023 and 2024, Key West RevPAR remains 23.4% ahead of 2019 levels, signaling that Key West has experienced a shift in customer since the pandemic and will not revert back to its pre-pandemic levels. With a trailing twelve-month RevPAR of $276.91, Key West surpasses New York City, Oahu, Napa Valley, and Miami Beach to be the top RevPAR market in the country.
Unmatched Construction Excellence
The Property is built to the highest standards of institutional construction, utilizing concrete and steel. There is likely no hotel in the Florida Keys that matches the Property’s level of structural integrity. The lobby / conference center complex, in particular, is recognized by law enforcement as the safest structure in Key West, certified to withstand winds of up to 210 miles per hour, and has been utilized as the county’s emergency operations center during prior significant storm events. The Property shares a power grid with the regional hospital, ensuring it receives the highest priority during any emergency situations.While other properties in Key West have experienced significant downtime and damage as a result of prior storm events, Beachside Resort & Residences has sustained relatively minimal damage and has continued to operate through all prior storms.The Hotel is supported by its own diesel generator should temporary power become necessary.
Key West International Airport Poised for Growth
Key West International Airport (EYW) is in the midst of a $98.9 million reconstruction and expansion of Terminal A, a project set for completion by April 2026. This expansion comes at a critical time, as the airport is operating at full capacity while airlines seek to increase seat availability to meet growing demand.
December 2024 marked a historic milestone for EYW, with the highest passenger traffic, (143,606 passengers), ever recorded in a single December. The surge in travelers underscores the airport’s importance as a gateway to the Florida Keys and highlights the urgency of its expansion to accommodate future growth.
News Highlights & Awards for FL Keys
Recession-Resistant, Caribbean Resort Market in the United States
During the 2009 financial crisis, occupancy in the Keys increased by 3% while the rest of the U.S. declined 10% and in 2021 while the country continued to recover from the COVID-19 Pandemic, the Keys saw a RevPAR increase of 33.6% compared to 2019 when the rest of the U.S. RevPAR dropped 173%. RevPAR recovered approximately twice as quickly as the broader U.S. The Keys are positioned as a safer, lower-cost, easier-to-access substitute for the Caribbean, Bahamas, and Central America, translating to a 3.1% RevPAR CAGR over the past 10 years and a 4.1% RevPAR CAGR since 2000. The Florida Keys’ heavy base of leisure-oriented demand combined with its easily accessible, drive-to location, allows the region to capture an outsized portion of demand despite the impact of Covid-19 and natural disasters. In fact, the Florida Keys has been the top performing lodging market, surpassing New York City, Oahu, and Miami, since 2020.
Prime Location Meets Unmatched Convenience
The Beachside Resort & Residences is ideally located on the northeast corner of Key West, perfectly situated to attract both leisure travelers and government groups, with its market leading complement of meeting space, including the largest ballroom in the market. Nestled between Key West Naval Air Station, Key West International Airport, and the iconic Duval Street, the resort offers unparalleled convenience for visitors.
With complimentary shuttle service to lively Old Town Key West for shopping, dining, or a night on the town, the Property seamlessly connects guests to the island’s historic charm and nightlife while maintaining a relaxed and secluded resort atmosphere that caters to the needs of both group and leisure travelers, making it a premier destination in Key West.
Waterfront Food & Beverage Enhancement
The Property is enhancing its food and beverage offerings with the addition of a beachfront Tiki Bar at the southern end of the waterfront, slated to open by mid-2025. This new addition, along with the inclusion of beachfront tables and lounge chairs, will transform an underutilized space into a vibrant hub, driving significant incremental food and beverage sales. Given that a large portion of this revenue is expected to come from beverages, it is anticipated to be highly profitable. Ownership also envisions the potential for a second satellite bar at the northern edge of the waterfront, near the Marina access, which would further elevate the resort experience and enhance its overall appeal.
The Largest Rooms in the Market
Featuring 129 one- to three-bedroom suites and 93 king or double-bedded rooms (which can be rented separately or in conjunction with the adjoining suite), the Beachside Resort boasts a maximum room size of 1,586 SF, with an average of 1,244 SF, making it the largest in the market. Each of the 129 suites includes a full, luxury four-fixture marble bathroom, complete with a separate shower/water closet, soaker tub, and double vanities—offering a level of comfort and luxury that rivals the most expansive and high-end accommodations in Key West.
Exclusive, Luxury Marina On-Site
The Property features a prestigious 14-slip marina, offering direct access to the pristine, world-class waters of the Florida Keys. In an area where marina space is limited, this exclusive marina caters to affluent boat owners and discerning tourists seeking a premier waterfront location. With limited developments on the horizon, the Beachside Resort and Residences presents a rare opportunity to capitalize on the growing demand for high-end nautical experiences in this coveted region.
Abundant Parking
The Hotel offers ample parking, a rare luxury in the often over-saturated parking landscape of Key West. With 338 parking spaces, including 167 in a parking deck conveniently connected to the main lobby building and meeting spaces, patrons of the restaurant and attendees at Hotel events can easily access the Property’s facilities. This feature is especially beneficial during inclement weather, as attendees can park undercover and directly access the restaurant, meeting spaces, and function areas without having to step outside. This combination of abundant parking and the largest ballroom in the area makes the Beachside Resort & Residences the premier choice for group meetings in Key West.
Resort Owner-Friendly Condo Agreements
The Resort is comprised of a combination of Seller-owned and third-party-owned condominium untis. One hundred percent of the third-party owned units participate in the rental management pool through rental management agreements between third party owners and the Seller-affiliated management company. The Property has written its condominium documents to place restrictions on the ability of unit owners from renting their units outside of the rental program. The rental agreements allow for management to have a constant and stable view of room inventory and the ability to plan years in the future. The Resort collects 100% of ancillary spend from guests, meaning unit-owners do not participate in any share of food and beverage, retail, marina, etc. The Resort owner is not responsible for capital expenditures inside of third-party-owned units. The rental agreements establish individual unit reserves for third-party-owned units, and renovations of these units would be funded by existing reserves and the unit owners. The Property is also benefited by fully-funded condominium reserves funded by all owners of condominium units. These reserves are set aside for the maintenance, repair, and replacement of designated common elements.
