The 101-room Sagamore, known for its art-centric decor and programs; 376-room Ritz-Carlton South Beach and the 95-room Ritz-Carlton Bal Harbour are now owned equally by Miami-based Lionstone Group.
Three well-known Miami Beach hotels are now more than neighbors: they’re family.
The 101-room Sagamore, known for its art-centric decor and programs; 376-room Ritz-Carlton South Beach and the 95-room Ritz-Carlton Bal Harbour are now owned equally by Miami-based Lionstone Group, New York-based Ben-Josef Group and New York-based Flag Luxury Group, according to Flag Luxury Chairman and CEO Paul Kanavos and COO Dayssi Olarte de Kanavos. The husband-wife duo declined to comment on the financial details of the merger.
The owners plan to combine the Ritz-Carlton South Beach and adjacent Sagamore Hotel by 2024, though it is yet undetermined whether the Sagamore will keep its current brand. Meanwhile, the Bal Harbour Ritz-Carlton will upgrade public areas food-and-beverage operations, and increase arts events, said Lionstone CEO Diego Lowenstein.
“We thought the Sagamore would be a great addition to our portfolio,” Olarte de Kanavos said. “We believe in the Miami market. We believe it’s going to be growing and getting stronger, and the competition is raising the bar in Miami. It made sense to pursue the Sagamore Hotel.”
Previously, the Sagamore was owned by family-owned Ben-Josef, while the two Ritz-Carltons were jointly owned by Flag and Lionstone. The merger gives the three ownership groups equal stakes in the property group.
The owners are planning for a four-year renovation of the Sagamore Hotel, Kanavos said, that will include updates to all rooms and including marble countertops in baths. The total number of rooms will be reduced to 75 as some accommodations are converted to suites. Services will be upgraded to match those at the Ritz-Carlton.
The bones of the Sagamore are conducive to becoming a five-star hotel,” Kanavos said.
The conversion will “elevate the guest experience,” said Ronny Ben-Josef, principal of the Ben-Josef Group. The Sagamore’s legendary arts events — a legacy from previous owners Marty and Cricket Taplin — will increase. Ben-Josef bought the Sagamore in 2016 for $63 million.
The renovations should be completed as Miami hospitality markets rebound, said Kanavos. He anticipates occupancy rates to grow over the next two years.
“Miami will appeal to those who want sunshine and the beach and are afraid of traveling outside of the country in 2021,” Kanavos said. He expects corporate and group travel to return in 2022.
In the years since Flag Luxury entered the Miami market in the late 1990s, a series of luxury hotels has boosted Miami Beach’s image. Hotels including the Edition, One Hotel, Faena, Setai — and soon, Aman — have become synonymous with luxury.
“These are great brand names that only elevate the [hospitality] experience,” she said. “They raise the rates for everyone in South Beach and draw incredible customers.”
Hotel occupancy plunged early on in the pandemic across Miami. In August, hotels began pitching ‘daycations’ to draw locals and help fuel business. Still, some owners are facing foreclosures, while others are seeing improvement, including the Fontainebleau Miami Beach.
Ben-Josef, Lionstone and Flag Luxury — all family-run businesses — decided to move forward despite the ongoing pandemic, Lowenstein said.
“Talks started in early 2020,” Lowenstein said. “We had looked at acquiring the Sagamore long before the Ben-Josef family. It was a no-brainer when Paul and Dayssi said, ‘now it’s ripe, let’s have this conversation with the Ben-Josef family.’ We got to know one another over four or six months. They are a wonderful family and we agreed upon everything.”
Ben-Josef views the pandemic as a temporary condition.
“The patriarch of our family instilled a long-term view in his four kids,” he said. “We looked at the history, branding, and location of these hotels and, maybe not today, but in 20, 30 years it’s going to prevail no matter what happens today. The family believes in long term assets…Once things open up, this stretch of hotels will get a great positive reaction.”
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