Myrtle Beach Deal Shakes Out As ‘Triple-Win’

MYRTLE BEACH, SC— Is FelCor Lodging Trust about to buy Dallas, TX-based Wyndham International? When HOTEL BUSINESS® recently suggested to Tom Corcoran that his Irving, TX-based real estate investment trust’s acquisition of the 385-room Wyndham Myrtle Beach Resort— as well as the accompanying Arcadian Shores Golf Club, a leasehold interest in the golf course, and an adjacent parcel of land— was an example of his organization’s way of buying up Wyndham “one property at a time,” the FelCor president/CEO’s only response was a noncommittal nod and smile. However, it was FelCor’s Executive VP/Chief Investment Officer Michael DeNicola who discussed the details behind FelCor’s $35.3-million purchase of Wyndham’s resort property. DeNicola told HOTEL BUSINESS®: “This move was clearly in line with FelCor’s commitment to look at destination-resort opportunities, particularly those including residential condominium components.” At this time, it was reported that resort hotels account for 5% of the EBITDA of FelCor’s total hotel portfolio. Going forward on this particular undertaking, it was reported FelCor will convert the hotel to a Hilton property in spring 2003, and will upgrade the guestrooms and the public space as part of a $10-million renovation plan. To this end, FelCor has executed a 15-year management agreement with Hilton Hotels Corp., a crucial condition of the transaction concurrent with the acquisition closing.  Acquisition of the hotel— accomplished without the intervention of a broker— saw FelCor utilize excess cash held on its balance sheet. Subsequently, the company continues to maintain no outstanding balance on its line of credit. On the other hand, Wyndham sources allowed proceeds from the sale of the Wyndham Myrtle Beach Resort will be used to pay down debt— one of the hotel owning-and-operating company’s primary goals along with that of ultimately fielding a Wyndham-flagged-only portfolio of properties. On this note, a spokeswoman for Wyndham pointed out that— since the company restructured in 1999— the aim has been to shed its non-proprietary properties (currently numbering 58 out of Wyndham International’s total portfolio of 218 lodging facilities). “While we might well re-brand some of these properties under the Wyndham flag— as we will be doing in line with this transaction, now that we’ve secured Hilton’s approval to put our name on the Hilton Fort Lauderdale Airport— the general idea we’re operating under is to sell-off most of these non-Wyndham-flagged sites in order to raise more money to further pay down our debt load.” By way of “giving back,” it was pointed out Hilton gets its flag on the Myrtle Beach property as it rolls over into FelCor’s domain. As explained by DeNicola: “The [newly acquired]resort’s proximity to our Embassy Suites Hotel – Kingston Plantation provides the added-value opportunity to complex the management of both properties with Hilton Hotels.” As described, the 145-acre Kingston Plantation master-planned oceanfront resort community includes freshwater lakes, a rolling wooded terrain, water activity park, and more than 1,600 feet of oceanfront property. In line with this site, FelCor and Hilton Hotels— through a joint-venture arrangement— developed and continue to manage rentals for Brighton condominiums, a 200-unit residential condominium development with 20,000 square feet of meeting space as part of Kingston Plantation. This project was completed and sold in the summer of 2000. That doesn’t necessarily mean all the work is done. After all, it was further pointed out this same joint venture holds land for the development of up to an additional 400 residential condominium units. On a property-specific basis, the Wyndham Myrtle Beach Resort features 385 rooms, which includes nine suites, and is located on the ocean at South Carolina’s Grand Strand, with each room offering ocean views. Additionally, the 16-story building features a restaurant, beach bar and casual dining r