One of the last pieces of vacant land on Upper King Street that fetched $840,000 in 2013 was sold again last month for nearly four times that amount, signaling what the seller said was a record for that part of the city.
“At nearly $300 per square foot, the sale sets a new mark for land on King Street,” said Trey Sedalik of TKH Holding Group, which purchased the property in May 2013.
Sedalik, managing partner of locally based Prospect Real Estate Partners, said he planned to build an independent, boutique hotel on the site with business partner Daniel James.
The group took its concept for a 54-room lodging through the city’s approval process, and the Board of Architectural Review gave it preliminary approval in December.
Sedalik said the $3.3 million buyout offer was unsolicited.
“There were numerous groups interested in buying the land, even though we were not offering the property for sale,” he said.
One factor that came into play was that his group struggled to find attractive financing for the $17 million project at 583 King St., Sedalik added.
“It was in the best interest of our group to sell the land, despite our desire to build the hotel,” Sedalik said.
He said the buyer, a company called King 583 Partners LLC, wants to carry out the original plans for a high-end, boutique lodging on the site.
Not much else is known about the new owners. The group listed only a North Myrtle Beach address on the deed, but the receptionist of the business at that location, Oceania Resorts, said nobody at that firm had any involvement with the Charleston transaction.
City planner Tim Keane said Thursday that no one in his department knew who’s behind King 583 Partners.
Sedalik said he could not identify the purchaser or purchasers under a confidentiality agreement he signed.
Whoever it is, the group is jumping into a market where property values have been climbing sharply for the past two years, driven by demand for space on the trendy stretch of restaurants and bars.
Patrick Price, a developer with PrimeSouth Group, said that demand has reached a new high recently. Wealthy investors from out of town are now going after properties that aren’t listed for sale, and in some cases they’re making offers that owners can’t refuse.
“Charleston is so hot right now that these institutions and large-net-worth individuals are coming down, and they just want to be here, they want to buy, and it’s a safe investment,” Price said.
He also wasn’t surprised that the 583 King buyer is maintaining a low profile, at least for now. He said a lot of investors buying on Upper King right now “want to stay under the radar.”
Dean Andrews, the owner of Zero George hotel and a former executive with Orient-Express Hotels, said while the sale price for the lot at 583 King was surprising, it would make financial sense for a high-end project.
“Developing a boutique hotel costs anywhere from $395,000 to $550,000 per room,” he said. “If they are going to build 50 rooms or so for an upper, upscale hotel client then the economics of it, to me, make sense.”
Plus, it could offer some variety to the street’s rising hotel market that, so far, has been dominated by large, branded hotels, such as the 10-story, dual-branded Hyatt House and Hyatt Place hotel under construction across the street.
Reach Abigail Darlington at 937-5906 and follow her on Twitter @A_Big_Gail