The buyer is laughing because he picked up the distressed property for $16,667 per room or about $23,000 less than the current estimated replacement cost, area construction industry estimators tell GlobeSt.com on condition of anonymity.
The seller, Ballardin Enterprises Inc. of Orlando, confirms the buyer's name will be disclosed when the deal is final next month. Ballardin bought the Kissimmee, FL property in 1999 for $2.4 million or about $28,571 per room, still a good price considering replacement costs at the time were double the purchase price, construction industry estimators tell GlobeSt.com.
Ballardin put the property into Chapter 7 (liquidation) on Sept. 25, 2001 when occupancy dropped to zero following the Sept. 11 terrorist attacks in New York and Washington, DC.
On top of his winning bid, the buyer has to pay $60,000 in delinquent Osceola County property taxes, closing costs estimated at $3,000 and a 10% purchase premium of about $140,000. Renovating and refurbishing the property will cost at least $100,000, interior designer estimators tell GlobeSt.com.
That brings the estimated effective purchase price of the property to $1.7 million or about $20,273 per room, still well under the estimated $40,000 per room replacement cost for comparable properties, construction industry estimators tell GlobeSt.com.
Karlin Daniel & Associates Inc. of Stuart, FL handled the four-minute auction. The number of bidders wasn't disclosed.
In an Orlando area hospitality industry shakeout that began after 9-11, another near Disney hotel, the 919-room, 20-year-old Hyatt Orlando goes on the auction block May 1, as GlobeSt.com reported April 12.
About 25 of Osceola County's 125 hotels and motels missed the April 1 deadline for annual property tax payments, according to county tax collector Patsy Heffner.
The county has about 12,500 hotel/motel rooms in a four-county hospitality market that has 113,000 rooms, according to the Orlando/Orange County Visitors & Convention Bureau. Disney itself has 22,000 rooms in 18 hotels.
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