Activate Hospitality purchased a West Palm Beach Holiday Inn and an adjacent development site for $23.8 million in a bankruptcy sale.
An affiliate of Miami-based Activate Hospitality acquired the 199-key hotel at 1301 Belvedere Road and a vacant 2.5-acre parcel approved for another hotel with 120 rooms, court records show.
Bridgeinvest financed Activate Hospitality’s purchase with an undisclosed loan amount, a press release states.
The seller, an affiliate of Hollywood-based AD1 Global, paid $20 million for the Holiday Inn Palm Beach-Airport Conference Center Hotel in 2019. In October, the AD1 affiliate and related entities for 12 other AD1-owned hotels in Florida filed for Chapter 11 protection.
The AD1 affiliates had an estimated $186.4 million in liabilities and $204.8 million in assets, according to a filing in West Palm Beach bankruptcy court. In a sworn declaration, AD1 CFO Alex Fridzon said rising interest rates, inflation and construction delays chewed up the company’s cash flow to the point where it could no longer make payments on a $165 million loan.
Activate Hospitality, led by founder Sagar Desai, was the only bidder for the West Palm Beach Holiday Inn, court records show. The firm plans to renovate the hotel and reposition the property as the Delta by Marriott West Palm Beach by the second quarter of next year, the release states. Activate Hospitality hired Driftwood Hospitality Management to manage the property.
Activate Hospitality has not disclosed what type of hotel it intends to develop on the vacant parcel. Last year, the firm and its partner, Miami-based Integra, sold the 82-unit Sixty Sixty condo-hotel in Miami Beach for $23.5 million.
It’s been an active month for South Florida hotel sales. In Miami, Chicago-based real estate investor George Nediyakalayil picked up an Even-branded hotel with 190 rooms for $29 million. In West Palm Beach, Midwest Hospitality Group paid $20.5 million for a 103-key Marriott-branded hotel.
And in Plantation, Thrive Hospitality Group and Mid America Lodging Group bought a La Quinta Inn with 104 rooms for $14.5 million.