Pan-Jam and partner buying Oceana hotel
The Urban Development Corporation (UDC) has inked a deal for the sale of the Oceana Hotel to a Canadian/Jamaican consortium for $385 million.
The transaction is expected to close in 60 days.
Oceana is being sold to the Downing Street Group for "primary use as a hotel", but the new owners will also be renting space to retail and commercial clients.
The partners in the consortium are Downing Street Partners Realty and Jamaica Property Company Limited, a member of Pan-Jamaican Investment Trust Limited.
Pan-Jam chairman and CEO, Stephen Facey, said the acquisition of the property continues the vision of his late father Maurice Facey, who was passionate about the redevelopment of downtown Kingston.
"It is also a distinct pleasure to have been invited to join Mr Tony Alberga, chairman of Downing Street and a long-time friend of both Pan-Jam and the Facey family, in this venture," he said.
The hotel will be remodelled in phases, starting in the first quarter of 2015, and will reopen for business as Caribbean Place. Oceana has no parking of its own, so Downing Street will pay $15 million to lease the adjoining car park at the Jamaica Conference Centre for 25 years with the option to review the terms after the first 10 years.
"In Q1 2015, we will immediately go in and start cleaning up and refurbishing the 500-space parking garage. From that point, we will then remove all of the current improvements that are on the ground floor to be ready to accept new tenants. Once we have lease out that ground floor space, we will commence the whole redesign process ... ," Daniel Odorico, president and chief financial officer of Downing Street, told Wednesday Business following the signing of the sale agreement with UDC on Tuesday. The acquisition is being done through King Church Property Holdings Limited, the company that signed the agreement with the UDC.
Downing Street Group will spend US$8 million to US$9 million on the car park and commercial space and up to US$17 million more on refurbishing the hotel said Odorico.
"While the structure itself seems to be in good shape, there is a tremendous amount of improvements that are going to be required," Odorico said.
Oceana fronts Ocean Boulevard on the Kingston waterfront. The hotel was built in 1977, with 388 rooms. It was modified in 1996 and leased to the Ministry of Health in 1997.
The complex was first placed on the market in 2008. In March 2013, a $350 million deal was approved by Cabinet for sale of the hotel to the National Health Fund, but the transaction failed to close, with no explanation on why the deal was cancelled.