The self-proclaimed sportfishing capital of the world has lately been the beneficiary of another form of “capital” as investors are showing growing confidence in Islamorada’s commercial value, and buyers are hoping for a big pay day. A number of large properties with big-dollar price tags, both commercial and residential, have hit the market in recent months, including hotelier Hubert Baudoin’s $15 million listing of Morada Bay and billionaire investor Paul Tudor Jones’ $14.5 million listing of his 6-acre bayfront home.
The owners of Caloosa Cove Resort and Marina have been actively seeking a buyer for their Lower Matecumbe Key property, while Upper Matecumbe Key’s Days Inn and La Jolla Resort are on the block for $12 million and $10.9 million, respectively.
Meanwhile, multimillionaire developer Michael Swerdlow last month sold his $13.1 million Palm Harbor estate on Upper Matecumbe. And though not listed, the former Papa Joe’s Marina property is also purported to be drawing interest from buyers. In fact, according to recent MLS listings, Islamorada is currently home to some of the priciest property listings in the Florida Keys, including a $19 million residential estate off Lower Matecumbe.
So is this just a natural rebound from the Great Recession, has one of the world’s largest equity firm’s recent investment in the village fueled a hot market, or is something else in play?
The Carlyle Group, a $12 billion Washington, D.C.-based equity firm, first set its sights on Islamorada in 2013 with the $10.6 million acquisition of Pelican Cove Resort, according to Monroe County Property Appraiser records. In 2014, Carlyle purchased Islamorada’s Postcard Inn for $52.7 million, La Siesta Resort for $11.7 million and the former Hampton Inn, now rebranded as Amara Cay, for $18.3 million, records show. The Carlyle Group now owns 370 of the village’s 1,198 lodging units.
Paul White, a commercial agent with Keller Williams Realty, said people can be sure investors are watching what The Carlyle Group is doing. “Any time there is that type of movement, it attracts attention,” White said.
Monroe County Property Appraiser Scott Russell was cautious about suggesting any direct correlation, though he acknowledged Islamorada’s recent boom. “I can’t really explain what’s going on,” he said. “[High price transactions] are all over the place. This whole thing is puzzling to me.”
Islamorada Mayor Mike Forster surmised that the big transactions are coming as the town is considering limiting the construction of large commercial buildings. The limited number of available lodging units also make Islamorada attractive to investors, he added. “If you buy a 200-bedroom hotel, you know that there will never be 200 new rooms added to the mix,” Forster said. “So your investment is protected due to us being in an Area of Critical State Concern and having very few permits available for any additional growth.”
Forster said that the council’s interest in limiting new commercial development to 10,000 square feet could make properties like Morada Bay, which features two restaurants, more valuable and attractive to investors given no one can come in and build a new same-size competitive business. “So that really sets a high premium for properties like [Morada Bay],” he said.
Village Councilman Jim Mooney, an Islamorada real estate agent, says he believes buyers are interested in Islamorada real estate because it offers a good return on the dollar. “It seems we are finally being discovered,” he said. “We are a great value compared to most of the places on the mainland.”
A message sent to Carlyle Group spokeswoman Claibourne Smith for comment on this story was not responded to by press time.