Throwback Thursday: Ritz-Carlton Coming to Orlando

November 2, 2018

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.

 

 

 

 

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