The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The investors behind the Nassau Palm’s purchase have submitted a multi-million dollar offer to buy the nearby British Colonial Hilton, Tribune Business can reveal.

The Sunset Equities consortium was yesterday said by sources familiar with developments to be one of two groups competing to purchase the 288-room property that is very much the ‘anchor property’ for Bay Street and downtown Nassau.

Their rival is said to be a London-based group, Musketeer Ltd, which is headed by Irving Aronson, a South African who worked with Sir Sol Kerzner, Atlantis’s developer, when they were in their formative accounting days.

“There are two offers,” one source told Tribune Business of the protracted sales process for the British Colonial Hilton. “One of them is from the London group [Musketeer Ltd], and the other is from the New York group.”

That latter group is Sunset Equities, which at end-May completed the purchase of the Nassau Palm on nearby West Bay Street, with plans to invest $8 million in its upgrade and transform it into a Marriott Courtyard brand.

The ‘New York’ reference is understood to relate to one of Sunset Equities’ major players, Argent Ventures, a private real estate developer that owns the land under the city’s Grand Central Terminal. The company also owns the Capitol Records Tower in Hollywood, California, and Miami’s Omni International Mall.

Government sources confirmed to Tribune Business that they were aware of Sunset Equities’ interest in the British Colonial Hilton, and that it had made a purchase offer to the property’s owners.

“It has come to our attention,” one official, speaking on condition of anonymity because they were not authorised to speak publicly on the matter, said.

“When they initially came to us, they said they were interested in multiple resort investments. We’re still watching the progress they’re making with the Nassau Palm, and with the other potential investments, we don’t know where they are with that yet.”

The British Colonial Hilton is jointly owned by the Canadian Commercial Workers Industry Pension Plan (CCWIPP), the pension provider for Canadian supermarket workers, and Adurion, the Swiss/UK boutique investment house and private equity player.

Adurion has Board control, and Tribune Business sources previously revealed both shareholders were keen to exit by going through with the sale at the right price.

“The pension fund is anxious to sell it, but if they don’t get it priced at a certain amount, they will end up with nothing,” one source said yesterday.

“They still have a lot of money in the deal, but are hoping for a quick resolution.”

This newspaper previously exclusively revealed that a $74 million offer to acquire the British Colonial Hilton had been submitted by a multi-billion dollar New York-based asset manager, which was working with Roger Stein, whose RHS Ventures company previously made a failed attempt to take over development of New Providence’s still-closed South Ocean property.

That offer, though, has fallen away, with Musketeer and Sunset Equities the two remaining players in the game. It is unclear which way the British Colonial Hilton’s owners will lean, or if a sale will be concluded at all, given that the hotel has been for sale for around a year.

Tribune Business understands that bids to-date have been in the $60-$80 million range.

Sunset Equities, which described itself as a consortium of Caribbean and international investors, pledged that it would create 75 construction jobs, plus around 70 permanent posts, once the Nassau Palm reopens in November 2014.

In announcing the Nassau Palm deal, Sunset Equities confirmed it was looking for other resort deals, saying it was ‘focused on acquiring hotels throughout the Caribbean region, making the tourism model more sustainable and maintaining environmentally-sound decisions’.

Colliers, the Canadian/US real estate firm engaged to market the British Colonial Hilton to potential suitors, has been heavily pushing the development opportunities offered by the 6.1 acres of seafront real estate immediately to the resort’s west.

It is also touting the $15 million, or $52,000 per room, investment in upgrades to the British Colonial Hilton in 2010, plus a further $2 million that was kicked in during 2012.

Apart from the 288-room British Colonial Hilton itself, the assets for sale also include the 22,240 square foot Fort Nassau, and 83,300 square foot, Centre of Commerce office buildings.

And, to further sweeten the pot, there is the 6.1 acre parcel that “provides a unique and rare opportunity to acquire significant oceanfront real estate assets with prime development land in downtown Nassau”.

Describing the British Colonial Hilton “as the landmark building of Nassau, strategically positioned in the heart of Nassau’s financial district overlooking the Nassau Harbour”, Colliers added that it was “Nassau’s only full-service business hotel with resort-inspired amenities”.

The realtor said the deal was “further distinguished by its rare 6.1 acre undeveloped parcel in Nassau’s landlocked downtown.

“The lands provide a variety of exciting development options, including the potential for residential apartment and condominium developments, or new yacht marina, to name a few.”

And Colliers added: “The hotel and office components provide strong and stable income, as well as excellent value-enhancing potential.

“Significant recent capital expenditures providing strong continued upside in operating performance.”