Hotelier Julian Gerner has sold Sorrento’s landmark Continental Hotel after his joint-partner in its $80 million redevelopment collapsed midway through construction.
Mr Gerner had partnered with Steller development group to redevelop the heritage-listed Italianate-style hotel into an upmarket dining and events centre, adding a 100-room hotel behind it.
Work on restoring the 144-year-old seaside hotel to its former glory ground to an abrupt halt in May this year after Steller ran into financial difficulties that saw several of its subsidiaries placed in receivership.
The four-storey limestone pub is effectively a building site with a large concrete slab and has been sitting empty since after it was put up for sale on an “as is, where it is” basis with an asking price around $25 million.
Sources, speaking anonymously because the sale process is confidential, said a developer had bought the site for about $21 million.
The hotel was built in 1875 and has the highest level of heritage protection due to its historical significance.
Its shaky future, as a result of Steller’s woes, sparked an outpouring of concern from hundreds of frustrated locals who packed a community meeting after site work shut down seeking answers.
Mr Gerner would not discuss sale details when contacted. Agents involved in the transaction, Colliers International’s Guy Wells and Trent Hobart, also refused to comment.
Mr Gerner agreed to purchase the Continental Hotel from the Di Pietro family in 2015 for $12 million. Around the same time, the local council sold him a neighbouring site at 23 Constitution Hill Road for $1.98 million.
Steller operated a complex web of development companies.
Their unravelling saw McGrathNicol appointed as receiver over 13 Steller subsidiaries in July by the Asia-based financier OCP. OCP has a $97.3 million debt exposure to the group.
Another lender Sydney-based, Atlas Advisors, who also provided funding to Steller, has appointed insolvency specialist KordaMentha as its agent after repossessing multiple assets.
The Continental lists three competing mortgage holders on its title. They include Manda Capital – run by Isaac Apel, Michael Czarny and Rodney Saw – as well as Atlas Advisors and OCP Asia.
The sell-down of the group’s assets has gathered pace. Earlier this week, another of Steller company sold a large permit-approved development site in Highett to New Zealand’s Ryman Healthcare.
Ryman plans to build a retirement village on the 11,981 square metre site at 32-40 Graham Road which it purchased for $28.5 million.
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