Tours are being booked for potential buyers hoping to kick the tires of Poets Cove Resort on Pender Island, but there may not be many takers, according to both real estate and hospitality industry experts.
CBRE Hotels, a division of commercial real estate firm CBRE Canada, plans to take potential buyers on a tour of Poets Cove on Jan. 9 and will ask for interested parties to present offers by 2 p.m. Jan. 22.
No price was put on the property when the sale came to light in September, and that hasn’t changed with the announcement of the offer process.
The 22-unit resort on 5.6 hectares overlooking Bedwell Harbour was completed in 2004 at a value of $30 million.
Getting close to that kind of price may be difficult.
“It’s a serious challenge for that particular property because of the ownership structure of the units and the use of the time-share portion in the high season. The owners have a high expectation of five-star service year round, and they have simply not attracted enough business to sustain the core business of that operation,” said hospitality industry consultant Frank Bourree, principal of Chemistry Consulting.
There have also been disputes within the ownership group. Concerns over quarter-share owners’ voting rights landed the owners association in court with Bedwell Harbour Hotel Ltd. last year.
Bourree said it is a beautiful property in a great location that is fairly well managed, but it remains isolated and hard to get to and has lost money each year it’s been open.
“It’s one more step — it’s like an island too far,” he said of the fact that most travellers to Pender Island have to come to Vancouver Island first before making the jaunt across.
Randy Holt, vice president of DTZ Victoria Real Estate, said while the hotel real estate market itself is considered active, there is a significant difference between strata-owned developments like Poets Cove and straightforward hotels.
“[Strata developments] don’t appeal to the typical hotel investor. It’s a more shallow pool of buyers,” he said, adding that on either side of the ledger, if the returns aren’t there for potential investors, any sale will prove to be a challenge.
Bourree said there has been some international investor interest in the region of late, noting the recent sale of Brentwood Bay Lodge and Spa to a Chinese company for $13.99 million.
“And we are seeing the recovery from U.S. and Canadian travel markets with the economy coming around, so there is some upside for a potential buyer,” he said. “The trick is to get it for the right price.”
Attempts to contact hotel management and the local CBRE representatives were unsuccessful Thursday.
CBRE’s brochure says offers will be evaluated on price, strength of deposits, conditions, timing, experience and qualifications of the purchaser and financing requirements.
Included in the sale are 19.25 of the hotel’s rooms. Each room is an individual strata lot and was sold on a quarter-ownership basis when it was originally marketed.
Also on the block: the Susurrus Spa, Syrens restaurant, the Aurora dining room, a fitness centre, pool, four commercial lots with an operating marine and commercial centre, a building to house water and sewage treatment systems and commercial laundry, an administration building and the 85-slip Poets Cove Marina.
Not included in the sale are the balance of the hotel lots, nine strata-lot villas and 15 strata-lot cottages that are on the property but will remain owned by third parties.
