Article

Cottage Industry

By Hannah Wallace March 31, 2005

Anyone who's ever tried buying and combining individual properties into one commercial project knows how difficult the task can be. Richard Dear, a 39-year-old Siesta Key resident with real estate, mortgage banking and construction experiences, faced that challenge when he found several residential properties on Siesta Key and created a quaint beach resort, turning his $13-million investment into one worth $30 million.

Dear and some friends were exploring investment properties in 1999 when they stumbled upon Mira Mar Beach Apartments in the Village. After landscaping and renovating the 30-year-old building, they added a few more cottages, and christened the entire complex Tropical Breeze Resort. Today it's Siesta's first full-service resort, an assortment of 23 genuine 1950s and 1960s motel and hotel buildings, known for their charm and kitsch.

"My biggest risk was not getting customers and having to resell the property," he says. "But real estate in Sarasota is such a pure investment compared to stocks or other investments. You have a hard, tangible asset that's practically impossible for someone to steal from you; the value just keeps increasing."

At any time Dear could have accepted offers from potential condo developers and retire early. "Condominium units are worth more than hotel units by nature," he admits. "You'd need four units in a hotel to get what you make from one condominium."

Nonetheless, he sees value in preserving older buildings. According to Peter Kiziu, executive director of the Siesta Key Chamber of Commerce, Dear is concerned with retaining the island's small beach town ambience. "That's why he started the Quality of Life Committee (a nonprofit organization to preserve some of Siesta's oldest buildings such as the Summerhouse) for Siesta Key residents, home owners and business owners."

Dear is confident that his unique resort is competition-proof against large hotel chains because they appeal to different audiences. His guests prefer the Old Florida feel and the salmon, baby blue and lime green colors of his resort. They also enjoy the private units rather than a hotel's identical rooms along tunnel-like corridors.

With approximately 60,000 guests annually, the resort remains busy nine months out of the year, while, according to the Sarasota Convention & Visitors Bureau, most Sarasota area hotels stay busy from February through May. Furthermore, Dear's annual return guest rate of 45 percent almost doubles the industry average.

Dear recognizes the value in solid relationships with industry peers. Almost daily, he talks with friends he's met at industry functions around the world. Paying attention to current events and economy are also important. "My biggest fear is terrorism. During hard economic times the first thing to go is leisurely travel," says Dear. Still, after September 11, while fewer people traveled long distances to get to his resort, more in-state guests visited.

Awareness of trends and human nature has helped Dear conduct aggressive and fruitful marketing campaigns. He has turned to Web site marketing, since, in his experience, no one pays attention to e-mail blasts anymore. He also caters his marketing campaigns to appeal to international tourists who comprise his customer base during one half the year and Floridian travelers who come during the other half.

What's next? Accruing additional properties for the resort, he says, and later, sailing around the world.

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