N.Y. capital firm buys Bethany Beach hotels for $44M
BETHANY BEACH — A New York-based hospitality investment firm has bought two Bethany Beach hotels for a combined $44 million, according to Sussex County land records.
EOS Investors LLC, a private 4-year-old firm founded by Jonathan Wang, bought both Bethany Beach Ocean Suites and The Holiday Inn Express Bethany Beach, on May 19. The property was sold by Bluewater Development Corporation, a real estate development firm based in Ocean City, Md. The sale was facilitated by Savills, a global commercial real estate advisory that represented EOS Investors.
“EOS is excited to welcome two additional drive-to leisure properties to its portfolio while expanding its footprint in the Delaware beaches,” EOS Managing Director Tom Burns said in a statement. “These two assets continue our strategic approach of identifying unique assets in high barrier-to-entry markets with attractive long-term demand growth.”
Bethany Beach Ocean Suites, a 112-room oceanfront hotel affiliated with the Residence Inn by Marriott, sold for $32 million. It features resort-like suites, a full service spa, a restaurant, kitchens in each hotel room and five meeting rooms.
The Holiday Inn Express Bethany Beach, a 110-room hotel off Jefferson Bridge Road and two blocks from the beach, sold for $12 million. The hotel, operated by InterContinental Hotel Group, has 1,400 square-foot flexible conference space and a business center.
This marks EOS Investors’ second and third Delaware addition to its portfolio, as the firm bought the historic Bellmoor Inn and Spa for $17.3 million in March 2020. Before that, EOS Investors made a splash when it purchased a 160-acre beachfront resort in Myrtle Beach for $156 million in 2019 and the 318-room Hamilton Hotel in D.C. for $106.5 million.
“Our initial draw to this market came from the tremendous success we experienced from our first Delaware acquisition, the Bellmoor Inn and Spa,” EOS Delaware properties general manager Ben Gray told the Delaware Business Times. “Both [Bethany Beach] properties are uniquely positioned at the nationally recognized ‘quiet resorts’ of Delaware.”
The Bellmoor Inn has performed “exceptionally well” despite the pandemic, and Gray noted that Rehoboth Beach and Bethany Beach have recovered well amid the financial fallout of the COVID-19 pandemic.
“They are the perfect drive-to resort destinations,” he said. “…EOS specializes in a highly selective investment approach that seeks to acquire assets that deliver exceptional results in highly sought after markets where the demand often outweighs the supply. Our most recent Delaware purchases are a reflection of that commitment to success.”
EOS Investors also owns boutique hotels in Beverly Hills, Calif.; three resorts in Florida; and a chain of nine properties in Kennebunkport, Maine. In the immediate future, EOS plans to evaluate each of the Bethany Beach hotels and roll out improvement plans, including a full renovation of the Holiday Inn Express, according to Gray.
“We look forward to building on the longstanding success, welcoming hospitality and deep ties to the Bethany Beach community that the property has fostered for many years,” EOS Chief Operating Officer Simon Mais said in a prepared statement.
Bluewater Development Corp. built the Bethany Beach Ocean Suites in 2015. In 2018, the developer bought the Holiday Inn Express Bethany Beach from Atlantic Management.
EOS Investors approached Bluewater Development Corp. about purchasing the pair of hotels in 2020, but Bluewater Development Corp. owner Jack Burbage was hesitant to take the offer. But then EOS Investors “finally made an offer we could not refuse.”
“It’s a fantastic market to be in because it’s a family resort that consistently draws people in the summer. But it’s also hard because the barriers to build a hotel are very high with the town’s zoning requirements,” Burbage told DBT. “The Ocean Suites took years to get through the process, and it was the only one approved to be on the boardwalk.”
Bluewater Development Corp. develops and manages properties spanning Maine to Florida, including six waterfront RV resorts, seven hotels and three recreational venues. Bluewater now has one remaining hotel in Sussex County: the Bay Resort in Dewey Beach. The company is permitted to build an Aloft Hotel in Rehoboth Beach
“I look forward to seeing EOS continue the close relationship with the Bethany Beach community that we have developed over many years,” Burbage added.