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Caribbean resort on the auction block

The Palmyra Resort & Spa, an unfinished luxury hotel and condo complex in Jamaica, is being sold by the project’s lenders. Bids are due 28 March.

An unfinished 280-room hotel and condominium complex in Montego Bay, Jamaica is up for auction. The Palmyra Resort & Spa, which currently is in receivership, is being offered to qualified investors through Racebrook Marketing Concepts, which is handling the international auction. The deadline for sealed bids is 28 March.

The Palmyra Resort & Spa is situated on 16 acres of protected white sand beach and encompasses three towers surrounded by numerous income-generating components. The offering includes a condominium portfolio with approximately 97 unsold residences within the completed Sabal and Silver towers, ranging in size from one to three bedrooms and from 749 square feet to 1,737 square feet. There are also two 2,569-square-foot penthouse suites crowning each tower, of which two are available for sale.

The offering also includes the Sentry tower, the shell of which has been completed, where plans call for 88 hotel suites ranging in size from 645 square feet to 1,238 square feet and two 2,260-square-foot penthouses. In addition, the sale includes 11 under-construction villas (each with three bedrooms and 2,646 square feet); a 30,000-square-foot spa structure; 12,000 square feet of banquet, conference and meeting facilities; a four-acre development site approved for the construction of two additional beachfront hotel/condominium towers; and an eco-friendly power plant.

According to John Cuticelli, CEO of Racebrook, the property represents an immediate opportunity for an investor or developer in the global hospitality community to acquire a high-profile luxury resort in the Caribbean with incredible financial upside. “The Palmyra presents the most compelling opportunity in the global hospitality market right now,” he said, in a statement.  “In addition, the property will be delivered unencumbered by previous brand and management, offering tremendous operational flexibility to the new buyer.”

Prospective investors must show they have the funds and capacity to complete the development, although the new owner may expand the design. The sale is expected to be finalised 60 days after the bids due, which places the deadline for closing the deal at the end of May.

Development of the property was started in 2005 by Robert Trotta, chairman of the Resort Properties Group. Trotta and his partners, which had planned to spend $176 million on the property, had poured $100 million into the development at the time of its takeover by the project’s lenders. At that time, the property was encumbered by principal debt of $88 million arranged by National Commercial Bank of Jamaica and a $22 million loan from the Jamaican subsidiary of Royal Bank of Canada. Ken Tomlinson, CEO of Business Recovery Services, was appointed as receiver by the banks this past summer.

Founded in 2004, Racebrook is a New York-based private investment firm that focuses on opportunity and disintermediation in the real estate and capital markets. It originally was a portfolio company of private equity firm Warburg Pincus.