At a time when America and the hospitality industry was reeling from the tragic events of Sept. 11, 2001, Thayer Hospitality defied all odds 17 years ago this month as it continued to move forward on the construction of its $600-million resort complex to be anchored by Orlando's first Ritz-Carlton and adjacent JW Marriott.
The 500-acre, five-star resort minutes from the Orlando/Orange County Convention Center was certainly ambitious under any economic conditions. To do it at a time when the Orlando market was reeling from low occupancy rates due to ongoing concern over traveling and a softening economy made the massive 1,584-room Ritz-Carlton/JW Marriott Grande Lakes resort development even more remarkable.
In a story published by the Orlando Business Journal the week of Nov. 16 2001, Bruce Siegel, Ritz-Carlton's director of marketing for the resort at the time, acknowledged everyone understood the business environment had changed since Sept. 11. However, he added, "We assume life will be better down the road."
Indeed, life got much better once the resort opened in late 2003 - giving the theme park capital of the world it's first big-name luxury hotel brand and yet another notch of sophistication as Annapolis, Md.-based Thayer and Marriott International teamed up for this exquisite resort.
"This is Marriott's largest construction project currently under way in the U.S.," Jane Chaney, Marriott's director of sales for Grande Lakes at the time, was quoted as saying in the 2001 article. Chaney noted the 1,000-room JW Marriott and 584-room Ritz-Carlton will function as one complex and share facilities, including the Ritz-Carlton Spa and a championship golf course designed by Greg Norman.
The world-class 40,000-square-foot spa, which my wife frequents to this day, was patterned after the renowned Ritz-Carlton Spa in Naples and featured 40 treatment rooms, a lap pool, beauty salon, cafe and fitness center. As for the golf, after the course opened with a celebrated grand opening event with Norman playing some of the holes (I attended the event as a former reporter with Golfweek Magazine), golfers were pampered with personal concierge caddies in tow to replace divots and provide food and beverage needs, among other services.
Such amenities and level of service were just a couple reasons Siegel was optimistic about the prospects of the resort's future in Orlando.
"When people book the Ritz, they do it for the total experience," Siegel was quoted as saying at the time. "It is like no other.”
To this day, that's still the case. Perhaps one reason Thayer Lodging, later acquired by Brookfield Asset Management of Toronto, was able to sell the resort in 2006 to Orlando-based real estate investment trust CNL Hotels & Resorts for $753 million.
A year later, the team of Morgan Stanley Real Estate, CalSTRS and Florida State Board gained control of the trophy property as part of the $6.5 billion takeover of CNL. But the timing of the massive debt-heavy CNL transaction - on the cusp of the financial crisis in 2008-09 - proved ill-fated and the partnership eventually defaulted in 2011.
After the Morgan Stanley partnership defaulted, the resort was assumed by three mezzanine-debt holders, according to Wall Street insiders: New York private equity group Blackstone, which held a 42 percent controlling interest in the ownership group; New York hedge fund goliath Paulson & Co. (43 percent) and Winthrop Realty of Boston (14 percent).
In 2013, the Blackstone partnership lined up $294.2 million of mortgage financing on the resort as part of a larger debt package from J.P. Morgan. At the time, the JW Marriott was appraised at $430.1 million and the Ritz Carlton at $207.4 million, for a total valuation of $637.5 million, according to Wall Street reports.
Both properties have since seen substantial gains in revenue, and Blackstone Group LP now owns the signature Orlando luxury resorts as part of a $1.3 billion deal announced March 31, 2015 by Bloomberg News. The JW Marriott in Scottsdale, Ariz., was also part of that transaction from a group led by billionaire Jon Paulson's namesake investment firm.