Real estate and hospitality industry executives like to live by the old adage, ‘location, location, location,’ because generally speaking the better the location, the better the opportunity for success.
Success also comes to companies that own what they are and work within those parameters. One such example is RREAF Holdings, a Dallas-based private real estate investment and development company. CEO Kip Sowden proudly says his company isn’t in the five-star resort/hotel business, but instead looks to own hotels “that middle America can afford.”
RREAF’s two most recent acquisitions, which were announced June 21, are a prime example. Those are the Amelia Hotel and Ocean Coast Hotel, each boutique properties in the middle of Fernandina Beach on Amelia Island, FL. The adjacent properties total 225 keys.
A historic barrier island (13 miles long and four miles wide at its widest point) north of Jacksonville and just a few miles south of the Georgia state line, Amelia Island is one of the more popular destinations in Southeast. And depending on what maps and lineage you believe, Fernandina Beach—with a long history of shrimping that exists to this day—might be even older than nearby St. Augustine, which is touted as the oldest city in the U.S.
Sowden and RREAF are focusing on bringing the Amelia Hotel and Ocean Coast Hotel into the company’s Beachfront Hotel & Resort division portfolio of properties that includes Beachside Resort Beach Hotel and Bikini Beach Hotel—each in Panama City, FL—as well as Cocoa Beach, Beachside Pensacola Beach Hotel in Florida and Sea Palms Resort & Conference Center on St. Simons Island, GA.
Troon manages the golf operations, golf course agronomy, and membership marketing for The Club at Sea Palms, while Aimbridge Hospitality operates Sea Palms Resort, including its accommodations, recreation facilities, restaurant and conference center.
This past December, RREAF acquired Hutchinson Island Plaza Hotel, FL, and the Holiday Inn Oceanfront in Surfside Beach, SC, near Myrtle Beach. Each of those hotels have had recent updates that Snowden said RREAF will build off with its capital improvement plan.
Hutchinson Island Plaza Hotel’s dock, for example, was recently refurbished to provide guests with additional space to fish all day and night with underwater lights. Holiday Inn Oceanfront had $7 million in renovations, including 4,500 square feet of meeting space, an outdoor pool, an on-site bar, and a fitness center.
Besides the beaches, what’s the common thread between the properties in RREAF’s Beachfront Hotel division? Again, it goes back to that ‘location’ thing, specifically the drive market. Amelia Island and Myrtle Beach each pull from the Southeast and Mid-Atlantic markets, while Panama City Beach and Pensacola Beach in the Florida panhandle each draw significantly from the Mid-South and Midwest markets.
“That’s the idea behind the division—iconic locations,” Sowden said. “The division is geared around great family vacations and hotels on the beaches, golf and tennis. With prices middle America can afford.
“Obviously, Amelia Island is phenomenal. We’re excited to be there. We’re big believers in the ‘drive’ regions. We look at population bases in proximity to major to half-day drives. For example, Amelia Hotel and Ocean Coast Hotel are on two of the more trafficked streets on Amelia Island. They each, in our opinion, need a facelift, which we’re going to start immediately.”
In the past year, according to Sowden, RREAF has “more than doubled” its hotel portfolio in the Beachfront division—increasing beachfront hotel properties to nine with more than 1,100 rooms.
“We will continue to expand the hospitality side of RREAF through acquisitions and development. Both these properties on Amelia Island fit perfectly within our growing hospitality and resort business model,” Sowden said. “We are opportunistic buyers and believe now is a good time to buy and develop as consumers are eager to get out and travel post COVID. Our drive to leisure hospitality assets continue to show very strong results and that trend is expected to continue even with inflationary pressure.
“We currently have two beachfront resort properties under development that will add an additional 550 rooms to our Beachfront Hospitality and Resort division. Affordable family friendly vacation spots, such as Amelia Island, should continue to outpace other sectors in the hospitality space,” concluded Sowden.