Hyatt Hotels closed the sale of its 1,641-room Hyatt Regency Orlando for $1.07 billion and also announced a deal with the buyers to build a new Grand Hyatt luxury hotel right next door.

The deal is a bet on the expanding Orange County Convention Center and the 2025 opening of Universal’s Epic Universe, RIDA CEO Ira Mitzner told GrowthSpotter Friday in an exclusive interview. Houston-based RIDA Development and Los Angeles-based Ares Management are the buyers and development partners in the deal.

“As the convention center expands, as Epic expands, we think there is a potential need — not for tomorrow, but over the next several years — for adding new room capacity,” Mitzner said.

The Regency at 9801 International Dr. is one of four hotels connected by sky bridge to the Orange County Convention Center. The deal also included an undeveloped 45-acre lot at 9000 Universal Blvd., just north of the hotel. That parcel accounted for $50 million of the total sale on Friday and came with a deed restriction that only a Hyatt hotel could be built on the property.

The Grand Hyatt is one of the company’s premium brands, considered a step up from the 4-diamond Hyatt Regency.

Mitzner said the property is entitled for up to 2,500 rooms. “Obviously, we’re not going to build anything that grandiose in the next several years,” he said. “But we’ll look at potentially adding the first phase with an additional 1,200-1,300 rooms, so that can add high-quality additional rooms to the convention district.”

Last October, Orange County Commissioners agreed to spend $560 million of Tourist Development Tax revenue to expand the convention center, already the nation’s second-largest such facility. The project includes a connecting covered concourse between the North and South Buildings, 60,000 square feet of meeting space and an 80,000-square-foot ballroom.

Mitzner said his vision is to see the Orange County center surpass Las Vegas and take over the number one position.

RIDA is a well-established player in the Orlando hospitality scene, and Ares has been the company’s financing partner for more than two decades. RIDA developed and still owns the 1,400-room Hilton Orlando, which is also connected to the convention center, and the Omni Orlando at ChampionsGate, which was recently expanded to just over 1,000 rooms.  RIDA also has convention center hotels in several other markets, including Houston, Denver and San Diego, where it will open the $1.5 billion Gaylord Pacific next year.

Mitzner and Marc Reicher, who heads the company’s Orlando office, will work with the state, county and convention center staff to establish a public-private-partnership to help fund the hotel construction. “It’s not easy to make a convention center hotel economically viable,” Mitzner said.

At the Omni Orlando, the hotel added a 1% surtax to its TDT to pay back the public investment for the expansion of its meeting space. 

The original 29-story hotel was built in 1986 and operated under the Peabody flag, incorporating the brand’s famous Peabody duck walks into the daily routine. A second 34-story tower was added in 2010, and the hotel was sold in 2013 to Hyatt Corporation for $717 million. The hotel has 315,000 square feet of flexible event space.

Hyatt CEO Mark S. Hoplamazian said the sale “represents the largest single-asset sale in Hyatt history.” It’s also the largest hotel transaction in the nation so far this year.

Mitzner said RIDA has signed a management agreement with Hyatt for 30 years plus two 10-year renewal options.

Mitzner said the joint venture is planning a $60 million renovation at the Regency scheduled to be completed in 2026. It will include a refresh of all the guest rooms and a “reimagining” of the pool and outdoor recreational space. “The reason we’re moving quickly is because we’re also doing all the rooms in the Hilton Orlando, the other convention property next year, so that the Hyatt and Hilton, both of them, will be fully renovated by the end of 2026,” Mitztner said.

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