1618-9 Tides turns:Hip hotel is sold,will go condo I
THURSDAY,AUGUST 19,2004_1 3C
TOURISM I REAL ESTATE 1 INVESTMENTS
Tides
hotel
SEC vote
is mandates
condosold willgo
reform of
The Tides,a hip South Falor, which claims both rooms of their own—in part
Beach hotel,was sold to Miami and Chicago as its because there are only so
new owners that will sell headquarters,has also bought many people who have that mutl
ualS
some units as condos. South Beach's Breakwater kind of money.
and Edison hotels and plans "There's not that many
BY DOUGLAS HANKS III to convert those properties people who can afford a The Securities and
dhanks@herald.com into condo-hotel operations, $800,000[for a]second,third Exchange Commission
Investors will soon be able too, Falor said in a news or fourth home,"he said. voted 5-0 for mutual fund
to own a piece of The Tides, release issued Wednesday. Rooms at the Tides top out companies to stop paying
that pricey,celebrity-friendly Gregory Rumpel, a hotel at $550 a night during the higher commissions and to
and hip hotel in South Beach broker with Jones Lang winter,according to General reveal their investments.
that once was part of record LaSalle, who helped put Manager David Moth.It used
mogul Chris Blackwell's together Falor's Cheeca to be owned by Island Out- BY ROBERT SCHMIDT
resort portfolio. Lodge deal,said the concerns post,the Blackwell company Bloomberg News
The Falor Co., which is about a glut of hotel-condo that bought up Art Deco The U.S. Securities and
buying up some of South units are real. But he said hotels in South Beach and Exchange Commission
Florida's most colorful hotels demand will remain strong helped spark the area's emer- ordered mutual funds to stop
and then selling off their for prime locations,including gence as a hip tourist destina- paying higher commissions to
rooms as condominium units, the Tides—which faces the tion. brokers who promote the
has signed a contract to buy Atlantic at 1220 Ocean Dr. Blackwell began selling off companies'funds and required
the 45-room hotel for an "I don't think there is a his hotels in recent years. portfolio managers to reveal
undisclosed price.Falor will ceiling to this stuff,"Rumpel Avalon Capital,a San Diego- investments in funds they
be selling the rooms as con- said. "Because they're not based investor that also supervise.
dominiums,a popular invest- making any more of it." bought Blackwell's Kent Today's SEC action contin-
ment because owners usually The Tides rooms, which Hotel,purchased the 10-story ues the agency's crackdown
return the rooms to the average 600 square feet,will Tides for$12.1 million in Jan- on the$7.5 trillion mutual fund
hotel's rental pool and collect sell for between$725,000 and uary, according to property industry in the wake of trading
income on them. $850,000,said Falor President records,after taking over the and sales abuses that regula-
But the condo-hotel mar- Robert Falor. The $3,000-a- property in July 2003. tors say harmed the returns of
ket has ballooned to the point night penthouse suite(celeb- The sale is scheduled to long-term investors. The
that there are worries it is rity sights there: Jennifer close in October. Diana agency has now passed 10 new
flooded. Falor is a leader in Lopez,Harrison Ford,Lauren Cheng, the commercial bro- rules in its overhaul of fund
the trend,having bought into Hutton, Pharrell Williams, ker named in the press regulation.
the Cheeca Lodge in Islamor- Nelly) will carry a $1.9 mil- release as handling the deal, "These rules effectively
ada and the Mayfair House lion price tag. declined to comment through complement the comprehen-
hotel in Coconut Grove.Both Falor said he expects some a spokeswoman.Condomin- sive mutual reform efforts that
are in the process of selling of the celebrity regulars at ium sales would begin in I have been under way since
rooms to investors. the hotel will opt to buy November. last fall," SEC Chairman Wil-
' liam Donaldson said at a meet-