Behind the Deal: Skyline International Acquires Renaissance Cleveland
Skyline International Development is buying the Renaissance Cleveland Hotel for US$20M, its third US acquisition and second in Cleveland. CEO Michael Sneyd discusses the deal and the flurry of other projects on his slate.
Built in 1918, the Renaissance Cleveland (below) is a 491-room gem covering 1M SF, with 10k SF of commercial space. “It’d been on the market for a number of years,” says Michael, snapped at Skyline's midtown HQ. His group was the successful bidder for the property—managed by Marriott—over three other major hotel operators. Previous owners spent $60M renovating the hotel over the years, including $25M on guest rooms, "but they didn’t do them all, so there’s a number we need to work on.” Some of the public spaces require sprucing up, as well, and Skyline plans a multimillion-dollar makeover when the deal closes in October.
This is Skyline’s second historic-hotel purchase in Cleveland. In 2011, it acquired the Hyatt Regency Arcade, and for a song: $7.6M in a bankruptcy sale. The hotel, which Skyline is renovating, incorporates The Arcade (below), built in 1890, one of the earliest indoor shopping malls in the US. Why’s Skyline hot for Cleveland? “It’s very similar to Toronto,” Michael says. “It’s a city on a lake with an industrial background that’s going through a renaissance,” with billions being spent on redevelopment of Cleveland’s downtown. “We saw that and realized it's a market that's turning around and will do well in the future.”
Last year Skyline—which owns Deerhurst Resort, Horseshoe Resort and a significant stake in the Village at Blue Mountain, part of a 2M SF portfolio—acquired California's Bear Valley ski resort, a property Michael says needs big improvements but has a “great development opportunity” at the mountain base. “And once the snow comes back I have every confidence that place’ll be booming.” Skyline isn’t necessarily making a strategic south of the border push. “We’re an opportunistic company, we look for opportunities. If they’re in Canada we’ll go after those as well.” He says they made offers on two "major hospitality properties" in Ontario and Quebec in 2013.
At Deerhurst, which Michael says has tripled its revenues since Skyline acquired it in 2011 and renovated all of its guest rooms, the company is developing Lakeside Lodge (above), a 162-unit condo building that'll replace the aging existing lodge on the resort's last available piece of waterfront land. Skyline has also received approval for 400 more units as part of the development of a new Deerhurst Village Centre, with a main street overlooking Peninsula Lake. The company recently announced an additional $10M investment to further improve the iconic Ontario resort, which dates to 1896, part of a $500M expansion and redevelopment plan.
Skyline’s got lots happening at Blue, too. In 2013 it acquired 50% of the retail component of both the Blue Mountain village—where North Face recently opened its second Ontario location—and all remaining development lands in the village and surrounding the golf course. Skyline's in the early stages of Blue’s next condo development, Village Gate. “We’re actively looking for a partner or developer to work with us on that,” Michael notes. Over at Horseshoe, the firm is finishing construction on Copeland House, a hillside condo complex, and is working through approvals for a new condo phase, part of a 1,500-unit master plan.
Skyline president Gil Blutrich tells us his firm is 705’s largest fully approved land owner, with the green light to build 7,000 units. “And we’re offering our land bank to developers to partner with us or buy some of the land to develop.” In July Skyline sold the Cosmpolitan Hotel Toronto to Executive Hotels and Resorts for $13M. And on Sept. 9 it will relaunch the Omni King Edward Hotel (above), reno'd for $40M. “We gave this grand dame a few more decades of life,” Gil says, noting the tie-in with his most recent buy: the 98-year-old Renaissance Cleveland. “We love to find the upside in these historic properties. It’s a labour of love.”
