|By Hannah Sampson, The Miami
HeraldMcClatchy-Tribune Regional News
Aug. 01, 2012--Morgans Hotel Group says the company is looking for a buyer for the Delano who will be willing to keep the hotel company on as operator for the long term --and possibly team up to develop more hotels under the famous brand.
Beyond that, executives said little during an earnings call Tuesday about their plans to sell the iconic South Beach hotel at 1685 Collins Avenue.
Brokerage Jones Lang LaSalle Hotels confirmed in mid-July that it had been retained to market the property, but Morgans wouldn't take questions at the time about the sale.
On Tuesday, CEO Michael Gross told analysts that exploring a sale of the property is consistent with the company's recent strategy to transition from being an owner and operator of hotels to a brand and management company.
"We also believe the timing is right for an asset sale, given the current strength in the hotel real estate market in Miami," he said. "However, we will be opportunistic and we are not committed to selling this asset unless it make sense for our company and our shareholders."
Chief Financial Officer Richard Szymanski would not comment on the process or timeline for a sale of the 194-room hotel.
Gross highlighted the Delano's importance as a flagship for future growth -- evidenced by an $11 million renovation that just finished.
Any buyer would need to keep a management agreement in place, he said. He added that "a major consideration" in the selling price would be a potential partner's willingness to help the company expand the Delano brand.
In addition to the Delano, Morgans owns, has ownership in or operates a dozen other properties around the world, including the Shore Club and Mondrian in Miami Beach.
Financial results released this week showed that occupancy at all of the Miami Beach hotels either stayed flat or dropped during the second quarter compared to a year ago. Average daily rates dropped 4.5 percent at the Shore Club to $276, stayed flat at about $465 at the Delano and increased 4.6 percent to almost $252 at the Mondrian.
(c)2012 The Miami Herald
Visit The Miami Herald at www.miamiherald.com
Distributed by MCT Information Services