The price "represents a deep discount from pre-9-11 marketing pricing and is about a 60% discount to full replacement cost," REH chairman Frank Nardozza says in a prepared statement. Occupancy at closing was 94%.

Nardozza's observation is borne out by Orlando area construction industry estimators who tell GlobeSt.com on condition of anonymity that hard construction costs of new hotels range from $100,000 to $200,000-plus per unit. The resort was initially developed in 1987 as a Marriott Residence Inn.

REH acted as principal in the deal through a private consortium comprised of Miami-based investors Ezra Katz of Aztec Leisure Corp. and Enrique Dillon of Lake Cecile Hotel Investors LLC. The group is investing another $1.6 million to renovate the property and have it ready in April for affiliation with Choice International Hotels as a MainStay Suites Resort. Kelco Management and Development of Westin, FL will operate the property.

"With this acquisition, we believe we have found a tarnished gem whose luster we believe we can readily restore," says Nardozza, a former national hospitality practice leader for KPMG Consulting.

REH and its partners snared the property at a below-replacement cost by locking in the price in March 2002. The price was based on the property's immediate post 9-11 performance. "We patiently waited and worked through many issues with the seller to finally reach the finish line," Nardozza says.