REHOBOTH BEACH – Harvey, Hanna & Associates recently purchased the Sandcastle Motel in downtown Rehoboth Beach, marking the town’s biggest sale this year.
According to Sussex County land records, the pillar of the 60-unit complex on Second Street adjacent to the Conch Island restaurant and bar was sold for $ 13.2 million to an HHA affiliate on November 29. The business development company also manages nine hotels through its hotel branch, Tko Hospitality.
Neither HHA nor Tko Hospitality representatives responded to calls for comment.
The Sandcastle Motel at 123 Second St. was opened by former Rehoboth Beach Commissioner Don Derrickson in 1986, according to the Cape Town Gazette. Its location makes it a popular place to stay as it is just a short walk from the beach and the promenade. The timing was perfect as Rehoboth Beach had started to embrace nightlife culture with more restaurants and bars open for business downtown.
The motel became a family business in 2007 when Derrickson transferred ownership to Five D Limited Liability Company. Ownership records show the company is a partnership between Derrickson, his wife, Dianne, and their sons, Regan, Spencer and Bryan.
The Sons opened Conch Island on a connected site across from Rehoboth Avenue a few years later, according to the Cape Gazette. The restaurant and bar will also close following a closing party on February 25 and 26, according to a Facebook post. Conch Island has reserved a temporary space right at the entrance to downtown Rehoboth.
HHA is a commercial real estate development company with 3.5 million square feet of industrial, office and hospitality real estate in the Mid-Atlantic region. One of his biggest projects was the redevelopment of the dormant General Motors plant in Newport, which later became one of Amazon’s largest facilities to date.
In 2015, HHA announced that it would make a concerted effort to tap into the restaurant and hospitality industry with Tko Hospitality. Tko big names include former Meyer Jabara Hotels executive Kostas Kolgeropouls as CEO and chairman, veteran hotel management Vince DiFonzo as COO and E. Thomas Harvey III as chairman.
Tko currently operates nine hotels, including Hyatt brands in Dewey Beach, Newark, Ocean City, Maryland, and Allentown and Chadds Ford, Pa. Other assets include The Lighthouse Restaurant and Bar in Dewey Beach, Lighthouse Cove Event Center, the Surf Club Oceanfront Hotel and Suite.
Last year, Tko announced that it would build two new Hyatt hotels in Delmarva over the next two years. The company opened the Hyatt House in Lewes earlier this year and plans to open the Hyatt Place in Kent Narrows, Maryland.
The $ 13.5 million sale equates to a unit rate of over $ 225,000, marking the biggest sale in downtown Rehoboth this year. Grottos Pizza bought the Dolle’s showcase for $ 6.2 million in February, while 330 Rehoboth Avenue. was sold to a hotel developer for $ 4.2 million in the same month.
In August, the New York hotel investment company bought two Bethany Beach hotels for a total of $ 44 million.