$70M Hilton Condo-Hotel Slated for Miami Suburb

Brought to you by

May 09, 2006
By Hortense Leon, Southeast Correspondent

The St. George Residences and Hotel at the Hilton, a $70 million condominium-hotel development, is expected to begin construction sometime between August and October in Coral Gables, Fla., a Miami suburb, said Gary Prosterman, CEO & president of Memphis-based Development Services Group, a hotel developer and one of the joint venture partners in the project. The other joint venture partner is Atlanta-based City Centre Properties, a high-rise and mid-rise residential developer.

Development Services Group has developed 20 hotels in the southeast, mostly Hilton Group brands such as the Embassy Suites, Prosterman said. The St. George--which is being financed by a $55 million construction and land acquisition loan from Wachovia Bank-- represents the company's first foray into the Miami market. Although it is generally acknowledged that there is a glut of residential condominiums in the Miami area, Prosterman said that Coral Gables is unique. "Not only is there not an over-supply of residential condominiums in that city," he noted, "but Coral Gables hasn't had a new hotel in 25 years."

The reason for the dearth of hotel projects in Coral Gables is that the city has high barriers to entry, Prosterman explained. Yet, Coral Gables has a plethora of multi-national companies plus upscale stores and restaurants, all of which make it a good hotel market.

Although Prosterman and his partners purchased the one-and-half-acre parcel for the St. George only a year ago for $16 million, an earlier developer, Miami-based George Goldbloom, had spent four years shepherding the development through the entitlement process, but died before he could see it through to fruition, noted the Memphis-based developer. Prosterman and his partners did not make any architectural changes to the design for the St. George, nor did they ask the city for any entitlement changes after taking over the project.

The St. George, which will be built on the edge of downtown Coral Gables, will feature 83 one, two and three-bedroom condominium residences with 792 to 1,418 square feet and 117 studio and one-bedroom hotel-condominiums with 428 to 928 square feet. Preconstruction prices for the residential condominiums will start in the mid-$400,000s and for the condominium-hotels they will start in the mid-$200,000s.