WorldCity Business Magazine

Real Estate Profile: A multinational Keeps Its Options Open

by WC

Think boat, palace and an iconic 1950s hotel they’re all part of one Spanish developer’s portfolio.

The Ardids have watched Miami mature over the past three decades.

It’s an engagement in the real estate sector that has given them and their company Key International Realty an edge when it comes to investment decisions.

The multinational can trace its ancestry back further to 1957 when the family founded a real estate company in Madrid, an office that is still very active in the development sector, particularly in the construction and operation of hotels.

In 1977, the Ardids opened an office in Miami and since then have extended their portfolio to include a casino boat and the Eden Roc Resort & Spa, one of architect Morris Lapidus’ signature works.

These complement a collection that includes a leased office building 848 Brickell Ave. in which the company occupies suite 700 and high-end condominium projects that include Ivy and Mint.

The company plans to maintain the mix moving forward, says Iigo Ardid who took over from his father Jose as president this year. He served as vice president from 2001 devoting his attentions to the condo side of the business while brother Diego focused on the hotel division.

The 23-strong Madrid office is overseeing the conversion of a palace in the historic portion of Seville to a 100-room hotel. When the project is completed, Key International will manage it under the NH flag, a European brand that Ardid compares to the Marriott.

In Spain, the company also operates NH hotels in Cordoba, Madrid and Seville and AC hotels in Madrid, Murcia and Trujillo.

That experience in the hospitality industry translates well to the South Florida market where the company has built and operates the South Beach Marriott and is refurbishing the Eden Roc.

Key International is almost doubling the size of the Eden Roc it purchased the 1956 hotel in 2005 for $100 million by adding a 290-room portion to the 380-room development, but Ardid has no concerns that it could contribute to a glut of hotel rooms on the market.

Rates at the South Beach Marriott climbed to $1,000 a night during the Miami International Boat Show, which ran Feb. 15-19, and they remain competitive at other times.

“It’s not strange to get $450 a night in season,” says Ardid. “Rates at the Eden Roc will be similar. It’s further from the heart of the action, but the Eden Roc will have better amenities. We’re adding a tower and redoing the pool deck so we’re adding 30,000 square feet of space. There will be a 15,000-square-foot spa.”

That would make the Eden Roc the third largest hotel on Miami Beach.

“Miami is drawing more and more convention goers,” says Ardid. “It has been very hot for the past five years. If a company is hosting a convention, what better place to come?”

To service its two Miami Beach hotels, Key International Realty has added a casino boat it purchased last year.

The company has refurbished Aquasino and will re-launch it this month. It multiplies by five the number of employees that Key International Realty oversees in Miami from 30 to 150.

The 230-foot-long vessel, which will be moored at Miami Beach Marina, comprises four stories and has a roster of 120 employees who cater to the up to 700 passengers that the boat can accommodate.

“It will take the residents to international waters where they can gamble,” says Ardid of the acquisition, one of the so-called boats to nowhere. “We launch on April 1.”

Aside from its hospitality assets, the company owns 848 Brickell Ave., a building that is 100 percent leased.

“We have owned other commercial properties over the years,” says Ardid, “but what I notice about this property in the financial district is that we always have full occupancy and every year the rates increase.”

Those rates have almost doubled since Key International started leasing in 2001 from $19 to $31 per square foot.

“That tells you how much the market has gone up,” says Ardid, echoing the consensus within Miami’s real estate sector that there is a scarcity of office space.

That said, Key International hasn’t lost faith in the residential sector either with three projects ready to complete within the next two years.

They are 400 Sunny Isles, a project in Sunny Isles Beach at which residents can own boat slips something of an endangered species in South Florida; and Mint and Ivy in Miami.

Ivy will be ready early next year, Mint in early 2009 the same time a renovated Eden Roc will be ready and 400 Sunny Isles at the end of 2009.

“Miami is a special place,” Ardid enthuses. “It’s one of the best pieces of real estate in the world. Problems in Latin America and the brutal cold of the Northeast will always provide a new slew of buyers for this market.”

One notable thing about the Key International Realty approach to real estate is that it builds hotels and it builds condos but never the twain shall meet.

“We dont do condo hotels,” says Ardid of the controversial format. “We just do straight hotels.”

Looking forward, the company plans to maintain a diverse portfolio.

“I think well be in office, hotel and housing for years to come,” says Ardid. “Housing in Miami will continue being strong. At this point, lots of people are scared to buy, but that will come back. People want to buy houses. They can only wait so long. A lot of projects were overpriced so it is no bad thing that there has been a correction in the market.”

Key International Realty hopes to broaden its horizons beyond Spain and South Florida.

“We’re looking at all of Florida,” says Ardid of planned acquisitions, “and maybe North Carolina and the Caribbean.” WC