Owners of Shelborne Hotel Launch $85 Million Comprehensive RenovationDecember 14, 2023
Demolition is currently in progress at the Shelborne South Beach hotel as part of an extensive $85 million renovation project aimed at restoring its Art Deco and MiMo design. Toronto-based Westdale Properties, in collaboration with New York-based King Street Capital Management and Cedar Capital Partners, took control of the majority of the condo-hotel at 1801 Collins Avenue three years ago for $120 million. Following this acquisition, plans for a significant restoration of the oceanfront property were proposed the subsequent year.
The renovation work, initiated about a month ago, is overseen by Mitchell Cohen, Westdale’s Chief Operating Officer, with an anticipated completion date in early 2025. Throughout the project’s duration, the hotel will remain closed. The Shelborne, constructed in 1940 by Igor Polevitzky and Thomas Triplett Russell, saw an eight-story addition designed by Morris Lapidus in 1958.
The project received a boost in October when the developers secured $23 million in new financing from Goldman Sachs, increasing their mortgage with the bank to $163 million. Cohen emphasized that the comprehensive renovation will prioritize preserving the building’s heritage and eliminating any alterations made over the years.
The joint venture formed by Westdale, King Street, and Cedar Capital plans to demolish the townhomes in the lobby, reinstate two-story windows facing 18th Street, refurbish flooring, and redesign various areas, including guestrooms, food and beverage venues, pool deck, cabanas, and meeting spaces. Proper Hotels, based in Venice, California, is involved in the redesign and will operate the 251-key hotel upon reopening, marking the first Proper hotel in Florida.
The property, previously owned by W.P. Carey and Russell Galbut, was sold in 2020. Galbut and his family had long been associated with the hotel, with his nephews, Keith Menin and Jared Galbut, working at the front desk during their early careers in the industry. Despite legal challenges related to alleged unauthorized assessments for renovations, the legal battle was resolved in favor of Galbut and his partners in 2017.
Westdale, in addition to the Shelborne project, acquired two apartment buildings in Bay Harbor Islands for $22.5 million last year and has investments in local hospitality businesses, including Swan and Komodo. The Shelborne is situated north of the Raleigh, South Seas, and Richmond hotels, with plans for a Rosewood Hotels-branded restoration and redevelopment by developer Michael Shvo and his partners in the vicinity. The nearby Shore Club hotel is also slated for redevelopment into an Auberge-branded luxury hotel and condo development by developers Witkoff and Monroe Capital.