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Business Observer Friday, Apr. 22, 2022 2 months ago

Iconic Naples hotel Inn on Fifth sells for $156 million

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A Maryland company is buying the luxury property on Naples' upscale Fifth Avenue. The deal is set to close later this year.
by: Louis Llovio Commercial Real Estate Editor

Another iconic Naples hotel is being sold.

This time it’s the Inn on Fifth in Naples, which a Maryland company is buying for $156 million. The sale is expected to close later this year.

The Inn joins other prominent properties in Naples that have recently been sold: The Naples Grande Beach Resort sold for $248 million earlier this year, and the Naples Beach Hotel & Golf Club sold for $362.3 million last year.

The new Inn on Fifth owner will be Pebblebrook Hotel Trust, which is based in Bethesda, Maryland, a Washington, D.C. suburb. 

Jon Bortz, the chair, president and CEO of Pebblebrook, says in a press release announcing the sale that “The Inn on Fifth exemplifies South Florida’s effortless blend of upscale, laid-back luxury and was developed flawlessly and cared for meticulously by the current owner.”

The Inn was developed by Phil McCabe, who bought a failing bank building on Fifth Avenue South in 1998 for $1 million. He transformed it into the luxury hotel that now is hallmark of tony Fifth Avenue. 

Over the years, the Inn has grown in both size and reputation, gaining AAA Four Diamond status in 2013. The prestigious award came after completing a $19.7 million renovation and expansion that brought 32 club level suites to the property. Another $5 million was spent on renovations in 2019.

McCabe did not respond to a request for comment through a spokesperson and he is not quoted in Pebblebrook’s press release.

In a 2013 interview with the Business Observer McCabe said, “I am a risk-taker, although I am a measured risk-taker. Today, I take far less risk because of my age.”

Today, the 199-room hotel is made up of two buildings — the main hotel and the club level.

The main hotel building has 87 guest rooms and suites, 10,000 square feet of meeting space, a 3,600-square-foot outdoor pool deck, a day spa and a fitness center. The club level building has 32 suites along with a private rooftop and exclusive lounge.

According to a financial disclosure from Pebblebrook, the hotel’s revPAR — revenue per available room, a combination of occupancy and average daily rate — for the past 12 months is $431. In comparison, according to the Nashville-based hospitality research firm STR, revPAR in the U.S. for the week ending April 16 stood at $91.25

In addition to the hotel, the property also has 21,000 square feet of retail space which is fully occupied by Truluck’s Restaurant and Ocean Prime, as well as several retail shops.

Pebblebrook, before the Inn on Fifth joins its portfolio, has 54 hotels and resorts — 13,200 rooms — across 15 markets, including the LaPlaya Beach Resort and Club in Naples, according to its website. It had $733 million in revenue in 2021

Once the transaction is complete, Pebblebrook officials say the Inn on Fifth will be managed by Seattle-based Noble House Hotels & Resorts, which operates 20 hotel properties along with restaurants, marinas and spas.

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