A number of major Miami hotel properties traded hands in 2016. These frequently attracted high prices from investors seeking to increase their presence in the region. Zika or no, Miami’s hotel properties appear to be as sought after as ever. Below are some of the largest hotel property transactions for the year.
#1 The Confidante: $229.4 Million
The Thompson Miami Beach, which originally opened in pack-heydays 1940, was purchased by Hyatt Hotels for just under $230 million. The property, located at 4041 Collins Avenue, is an oceanfront three-tower hotel property that houses 380 rooms. Also included is a mixed use parking garage located at 228 West 40th Street. The purchase is said to be part of Hyatt’s efforts to add to their “Unbound Collection.”
Hyatt closed the deal with seller Geolo Capital in April after announcing it only the prior month. The price amounted to a rather whopping $603,684 per room, about 2.7 times what Geolo, only a few years prior in 2012, had paid for the property. However, reportedly Geolo put an additional $82 million into the property for renovations. Nevertheless, the sales price appears to represent a significant profit for the seller.
#2 Aloft South Beach: $105 Million
In September, Jason Halpern and Mitchell Hochberg executed the $105 million sale ($446,809 per room) of their rather newly constructed – the hotel had only just opened one year prior in June 2015 – Aloft South Beach hotel to the Rockpoint Group. This purchase represents an increased presence for Rockpoint, which appears to have considerable conviction in Miami’s prospects in that this purchase is on top of its fairly recent $113.5 million purchase of Mary Brickell Village, a nearly 200,000-square-foot shopping center in the Brickell / downtown Miami area.
Aloft South Beach is an eight-story hotel with 235 rooms located across Collins Avenue from the beach at 2360 Collins Avenue. Located at the hotel is Continental Miami, a Stephen Starr restaurant. Reportedly Halpern and Hochberg had originally planned for a residential project on the site when they purchased it it for just under $13 million in 2005, but altered their plans as the recession hit a few years hence.
#3 Viceroy Tower: $64.5 Million
In June Al Faisal Holding Company, one of the largest private industry groups in Qatar, paid $64.5 million, $435,810 per room, to buy the Viceroy Miami. This was Miami’s largest foreign investment in a hospitality property for the year. It was Al Faisal’s fifth purchase in the United States, and its second in Miami, with its first (in Miami) having been the St. Regis Bal Harbour, which it bought for $213 million back in 2014. Pebblebrook Hotel Trust, the seller, had bought the 148-room hotel for $37 million back in 2011. The purchase would seem to indicate that foreign investors remain hungry for properties in Miami.
Related to the purchase, the Viceroy name was dropped from the hotel, replaced with Starwood Hotel & Resort’s W Hotels brand. Plans for a significant renovation – as frequently happens with brand changes – have been announced. Among the changes anticipated are the conversion of its 50th-floor rooftop into a cocktail lounge.
The buyer inherited a problem after the deal closed as the pool deck that it shares with Icon Brickell, which the Travel Channel says is the largest in the United States, is to be closed for repairs over the next 12 months, maybe more. Lacking a pool could potentially hurt bookings for the W. In any case, is surely represents a nuisance of a situation for its new owner.
#4 Sagamore Hotel: $63 Million
Also during the year, the Taplin family’s sold its Sagamore Hotel in Miami Beach to the InSite Group. The $63 million ($677,419 per room) sale, however, was fraught with controversy.
In March, the beachfront hotel was reportedly being marketed for sale, albeit quietly, for around $60 million by Martin Taplin and his son-in-law Neil Sazant, the owners. The Taplin family, reportedly under increasing financial strain, had already faced a foreclosure filing on the hotel in 2011. Within hours of agreeing to sell the hotel to InSite, Martin Taplin, in an apparent suicide, fell to his death from the 25th-floor Bal Harbour condo belonging to his stepmother. Other controversies reportedly ensued, including an alleged prior purchase contract with a different buyer.