Ocean Properties’ latest buy at its core

November 2008

BOLTON LANDING, NY— Given Ocean Properties, Ltd.’s New England roots and its penchant for restoring historic hotels and resorts in the region that had seen better days, the company’s acquisition in September of the 70-acre Sagamore Resort on Lake George in the Adirondack Mountains here made perfect sense.

Ocean Properties, a privately owned family business run by Tom and Mark Walsh, owns and/or manages more than 100 hotels across the U.S. and Canada. The company paid $88 million for the 330-room Sagamore Resort, which was originally constructed back in 1883. In addition to the resort itself, the purchase included an 18-hole golf course, a conference center, a marina, a sailing school and a spa. The business entity making the actual purchase was an Ocean Properties affiliate called Sagbolt, LLC, an acronym for Sagamore and Bolton Landing.

Selling the property was Green Island Associates, which is named for the island on which the Sagamore Resort sits. Green Island, which had owned the Sagamore since 1983, was a partnership of the locally based Wolgins family and Philadelphia-based Kennington, Ltd. Omni Hotels & Resorts managed the property for a number of years, starting in 1985.

The Plasencia Group represented Green Island Associates in the sale to Ocean Properties.

Ocean’s vp of operations, Tom Varley, described The Sagamore as “an authentic jewel of a hotel with a great sense of place. It has stood as a storied part of the Adirondacks experience for more than a century.”

Without citing a specific dollar figure relating to the size of the investment required to bring the property up to acceptable standards, Varley implied the capital infusion would be significant. “Our goal is to polish the past to ensure that the Sagamore can be enjoyed by more generations to come,” he said. Ocean Properties plans to “take the steps needed to preserve the past, while meeting the needs of the 21st century,” he added.

According to Plasencia Group’s chairman and CEO, Lou Plasencia, the resort underwent $75 million in renovations in 1983 after the Green Island acquisition and an additional $20 million in upgrades beginning in 2002.

One of Ocean Properties’ specialties in the past few years has been rejuvenating resorts with profiles similar to the Sagamore’s. In fact, the Portsmouth, NH-based owner/operator recently completed a $30-million renovation of Wentworth by the Sea Hotel & Spa in New Castle, NH, which dates back to 1874 and today is part of the core Marriott brand. Similarly, the company restored the historic Bar Harbor Club and adjacent Harborside Hotel & Marina in Bar Harbor, ME. It’s also in the process of completely overhauling the Samoset Resort in Rockland, ME.

Ocean Properties is actually a major lodging provider in Maine with 10 hotels and resorts, ranging from upper upscale properties like the Harborside and Samoset to limited-service product like a Fairfield Inn in Bangor and a Holiday Inn Express in Portland. Other parts of the company’s portfolio stretch to Key West, FL, where it operates both a Westin and a Sheraton Suites.

For Plasencia, the size of the Sagamore deal made it especially significant, considering the state of the financial markets this fall, which he said were at their worst since 9/11. “The tumultuous investment and credit markets, combined with the property’s complex array of components and resort amenities,” he said, “made this an extremely challenging transaction.”