Hotel Industry swells with billions in investments
South Florida’s commercial market is sizzling with multi-million dollar transactions, showing no signs of a slowdown. The movers and shakers in Miami’s commercial sector, especially Hotel investors, have spent a record of over $40.5 Billion on hotel purchases and project transactions last year, according to a hotel research report by STR, and that number continues to increase. Highly driven by year-round demand fueled by tourism and global events, the Miami hotel industry, has seen a record amount of investment money unloaded into the industry within the last few years that could be an indicator of more major national and foreign investments to come.
Trophy properties are being snapped up as assets by more global investors as Miami’s strong hotel market captures worldwide attention. Many of the major hotel deals in recent years have been and are most likely to be sold to foreign buyers, such as a sovereign wealth fund or a large institutional investor, according to reports. Over the years Miami has ranked as one of the top 5 markets in terms RevPAR (revenues per available room) with growth projected in the 5% range over the next several years. Miami is also ranked third in the nation for top/strong hotel markets behind New York and California. According to reports over 9,132 new keys are scheduled for Miami from planned and proposed new projects and hotels currently under construction. Miami hotel supply was up 3.9 percent, higher than the national average of 1.5 percent as the city continues expansion to meet a robust demand.
Here’s a list of some of South Florida’s most recent high-priced hotel sales in the past two years:
$325 Million – Ritz-Carlton Key Biscayne – Sold in June 2015 to Carey Watermark, the property features 302 rooms resort guestrooms and 188 condo-hotel units located on Key Biscayne, an island resort on 17 acres of oceanfront. Sales at the Ritz have peaked at $1.076 million on a per key basis.
$322 Million – InterContinental Miami – With 641 rooms, the waterfront hotel located at 100 Chopin Plaza, was absorbed in a massive $6 Billion deal. The Blackstone Group purchased an 85 percent interest in the Downtown Miami hotel.
$278 – James Royal Palm in Miami Beach – The 393 room oceanfront hotel sold in March 2015 to Chesapeake Lodging Trust. The hotel, operated at 1545 Collins Ave is an iconic art deco property.
$230 Million – Miami Beach Edition – Marriot International sold the 295room Edition hotel to the Abu Dhabi Investment Authority (Sovereign wealth fund) in February 2015. The hotel opened to acclaim and $1000 per night room rates is a part of a three Edition hotels: Miami Beach, London and New York.
$229 Million – Thompson Hotel – The 380 room hotel at 4041 Collins Ave was sold by an affiliate of Geolo Capital in March 2016 to an affiliate of Hyatt Corp, HT Miami LLC. The sale was the biggest of the year. The award winning property was converted from an apartment complex into a luxury hotel previously in 2014.
$105 Million – Aloft Hotel – The 235 room resort property at 2360 Collins Avenue – Renamed Gates Hotel South Beach sold in September 2016. Now a part of the Doubletree by Hilton hotel group, the hotel’s developer, JMH Development, sold to Rockpoint Group.
$68 Million – Sagamore Hotel – The 93 room hotel comprised of two properties sited at 1671 Collins Ave sold in April 2016 to Insite Group, backed by Israeli investors in Tel Aviv.
$64.5 Million – Viceroy Miami – Sold to Al Rayyan Tourism Investment Company, a Qatari investor. The hotel operates 148 rooms at 485 Brickell Avenue, in Miami’s Financial district. The company also purchased the St. Regis Bal Harbour several years ago at $1 Million per room.