Chesapeake Lodging Trust, a real estate investment trust focused on high-end hotels, entered into an agreement to purchase the James Royal Palm for $278 million by the end of the quarter, the company announced.
“We are very excited to announce our entrance into the highly desirable Miami South Beach market with the pending acquisition of The James Royal Palm,” James L. Francis, president and CEO of Chesapeake Lodging Trust, said in a statement.“The Royal Palm, which recently underwent a comprehensive renovation, has an irreplaceable oceanfront location at the intersection of Collins Avenue and 15th Street. We believe the hotel has significant upside potential in both revenue and profitability, and we are happy to partner with both HEI Hotels & Resorts, as the new hotel manager, and Starwood Hotels & Resorts, as the franchiser, on this project.”
The agreement comes less than two weeks after developer Don Peebles told The Real Deal the hotel was being marketed for sale. Peebles, who built the Miami Beach hotel and later sold it, told TRD he recently made an “aggressive” offer on the hotel, but “was not willing to pay the price that we think it will ultimately sell for, which is north of $800,000″ per room, or as high as $1 million per room.
The $278 million acquisition means that the 393-room oceanfront hotel at 1545 Collins Avenue will sell for more than $707,000 per room when the deal goes through.
Chesapeake Lodging Trust owns 20 hotels, totaling about 6,100 rooms in eight states and Washington, D.C., according to its website.