This Myrtle Beach, SC, oceanfront high-rise sold for $13 million. What we know

One of Myrtle Beach’s oceanfront high rises was sold.

The Yachtsman Resort at 1304 North Ocean Blvd. was purchased by Hybridge Capital Management, according to the firm’s Feb. 20, 2024 press release. Hybridge Capital Management is based in Los Angeles and bought The Yachtsman out of bankruptcy, according to the press release.

The sale closed Feb. 2, 2024, with a final sale price of about $13 million, according to documents filed with the United States Bankruptcy Court District of South Carolina. Max Mellman is the managing partner at Hybridge Capital Management, and coupled with improvements the firm intends to make to the Yachtsman, Hybridge’s investment is north of $15 million.

Mellman added the firm intends to operate the Yachtsman, do renovations, and have no plans to knock the building down.

“We just wanted to extend our presence,” Mellman said in an interview with The Sun News. “We found yachtsman to be an iconic piece of real estate well located by the Ferris wheel here, and we’re just looking to enhance it and really lean into the Myrtle Beach market.”

The resort first went on sale in 2022 due to the termination of its former timeshare agreement, The Sun News reported at the time.

The Yachtsman is not Hybridge Capital Management’s first deal on the Grand Strand.

An investment firm focused on commercial real estate, Hybridge offered co-investment for the purchase of The Sandcastle Oceanfront Resort at the Pavillion and Sandcastle Oceanfront Resort South Beach with Springboard International Advisors LLC, as reported in December 2022 by Hospitality Net.

Hospitality Net’s report does not say how much Hybridge co-invested in both Sandcastle resorts, and Mellman did not disclose how much the purchase was for; however, combined with The Yachtsman purchase, Hybridge Capital now has 410 property keys in its Myrtle Beach portfolio.

He added that the north tower is undergoing an extensive renovation soon. For Mellman, the fundamentals of the Myrtle Beach market drew Hybridge to the Grand Strand.

“There’s a lot of people moving to Myrtle just because they’re getting priced out of places like Florida and New York, and we see it as an optimal place of growth,” he added. “It’s getting nicer, nicer, and we find in the next 10 years I view the Myrtle Beach market similar to how Long Beach was in the 70s.”

Hybridge has previously posted its lending parameters on LinkedIn, which included check size offers ranging from $2-60+ million for single-family residences, multifamily and entitled lands, according to a 2023 LinkedIn post.

Indeed, Hybridge’s entry as a serious player in the high-rise space in Myrtle Beach is part of its business strategy of finding assets under duress and undervalued.

“(We’re targeting) distressed acquisitions and deals where what I like to call no-brainers, especially in this market with the amount of stress on commercial real estate mainly due to the rising interest rates and maturing debt,” Mellman added. “In the case of the Yachtsman, we loved it because it had multiple exit strategies, (and) the zoning was incredibly friendly. The timeshare regime was no longer associated with the deal and was completely wiped with the bankruptcy proceeding. So they were fully unencumbered condos ... that flexibility gave us a lot of comfort.”

While Mellman is bullish on the Myrtle Beach market long-term, he’s not looking to add more properties for the immediate future unless the deal is right. Interest rates and inflation present rocky waters right now, coupled with shakiness in the short-term rental and real estate markets; Mellman and Hybridge will stand fast for now. However, Mellman believes he won’t have to wait too long.

“We’re very defensive right now,” He added. “But if the right price comes along, I would not be averse to acquiring ... We think just the pressures as interest rates, there’s going to be a windfall of deal flow in the next 12 to 24 months.”

Indeed, interest rates are impacting other markets in the Grand Strand, like the housing market. Home sellers were more conservative in 2023 than in previous boom years across the Grand Strand, as the real estate market is potentially settling. While the pace of construction did not slow, residents selling in the market are not speculating. For Jeff Forman, a real estate agent with Keller Williams Realty, Inc., if people put their home on the market, it’s for a reason.

“(Sellers) really want to relocate to a different part of the state, or a different state in general, for family reasons, and for work reasons,” Forman said. “Those are the two major things that I’ve seen.”