Allegiant Travel Co. wants to spread its wings into commercial real estate.
The budget airline is looking to add real estate development to its portfolio, and those aspirations are already taking off. After purchasing 20 parcels of land from 15 different owners for a sum of $35M, the company is working to develop a 22-acre resort compound based in Port Charlotte, Florida, Bloomberg reports.
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The development arm, which has been coined Sunseeker Resorts, will build a 75-room hotel and 720 condominium units in addition to bars and restaurants on the site. Condo prices will range from $650K to $1.1M depending on size.
The new initiative is a play to diversify the airline's revenue, Bloomberg reports, but investors are fearful the project could end up being more of a costly distraction than a gold mine. But Allegiant has a plan. The airline claims it will use pre-sale condo deposits to fund the project initially, and will then roll that income into financing further construction down the road.
Should the development fall flat, Allegiant is prepared to flip the Florida project and sell the property to another developer to recover the loss.
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