Mast Capital and Koch buy a 7-acre Islamorada resort in the Keys

A joint venture of Mast Capital and Koch Real Estate Investments has acquired The Islands of Islamorada, a seven-acre oceanside resort in the Florida Keys, from the Frisbie Group. The property carries 22 luxury villas and eight hotel suites, with four-bedroom furnished waterfront residences starting at $3.8 million. Berkadia’s Miami office arranged the financing through Ardent Real Estate.

Why it matters

The structure is the story. This is not a hotel bought for its room revenue, it is a resort bought for a residential sell-out with hospitality attached, and that is now the dominant way capital enters the Keys. Monroe County’s building permit allocation system caps new units so tightly that buying an existing entitled resort is close to the only way to get scale, and the villa is the unit of exit rather than the key.

Koch Real Estate Investments showing up as the equity partner matters more than the acreage. Family office and industrial-family capital chasing branded coastal residential is a different pricing regime than hotel funds underwriting to RevPAR, because the villa buyer pays for scarcity and does not care about a cap rate. For any developer holding a small Keys or barrier island asset, that is the bid to know about.

The numbers

The site is seven acres oceanside in Islamorada, improved with 22 villas and eight hotel suites, plus a private marina, two oceanfront pools and a fitness center. Four-bedroom fully furnished villas start at $3.8 million. Ocean Sotheby’s International Realty is the exclusive sales broker. The purchase price was not disclosed.

What’s next

Watch the villa absorption rate, because it is the only real read on whether $3.8 million clears in the Upper Keys at this point in the cycle. Also watch whether Mast keeps buying, since the firm already owns Little Palm Island and has been an active seller in Sunny Isles this year, a pattern that looks like rotating Miami hotel basis into Keys residential. More South Florida coverage.