South Florida’s five biggest investment sales of 2015

Hotels were South Florida's hottest properties, but retail and offices also made an appearance

Dec.December 24, 2015 02:15 PM

Hotels, shopping malls and offices — if it performs, investors want it. This year was marked with huge commercial sales in South Florida, with more than a few pushing past $200 million price tags.

The Real Deal analyzed data from the CoStar Group and Real Capital Analytics, two information companies, to come up with a list of South Florida’s five biggest investment sales during 2015. Only single properties were included, so assemblages don’t count — $370 million purchases on Lincoln Road need not apply. Check out the list below:

#1 Ritz-Carlton Key Biscayne, $325M

It’s unknown whether the acquisition team at Carey Watermark Investors knew they were about to set a record for 2015 when this sale went down. But prophesied or not, the firm’s acquisition of Key Biscayne’s Ritz-Carlton was South Florida’s most expensive investment move this year.

Here are the facts: In June, Carey Watermark paid $325 million for a majority stake in the Ritz-Carlton Key Biscayne, a 302-room hotel with 188 condo-hotel units. The whole resort takes up 17 acres of prime beachfront land at 455 Grand Bay Drive on Key Biscayne’s eastern shore. The seller was Gencom Group, a family of hospitality companies that’s known for being one of the country’s largest owners of Ritz-Carlton properties.

The complex was first built in 2001, and Carey Watermark plans to start renovating all of its guestrooms next year. Besides sunshine and sand, the resort offers a 20,000-square-foot spa area, fitness center, two pools and a signature restaurant named Cioppino.

#2 InterContinental Miami, $302.18M

The year’s second-most expensive sale was also a hotel, this time in downtown Miami.

As part of Blackstone Group’s $6 billion acquisition of Strategic Hotels, the company picked up one of its flagship properties — the 641-room InterContinental Miami, a 34-story hotel overlooking Biscayne Bay at 100 Chopin Plaza.

Blackstone bought an 85 percent interest in the property, which was valued at $355,473,004, according to data company Real Capital Analytics. That means the price equates to about $302 million, or about $471,376 per room.

The InterContinental underwent a $30 million renovation in 2012, including the launch of restaurant Toro Toro, headed by celebrity chef Richard Sandoval.

Blackstone is a major financial company based in New York. The firm isn’t only grabbing headlines for big acquisitions in South Florida — along with partner Ivanhoe Cambridge, the company paid an incredible $5.3 billion in October for the Stuyvesant Town housing complex in New York.

#3 Palm Beach Outlets, $278.44M

In this year’s biggest retail investment and third-priciest commercial sale, a group lead by Clarion Partners of New York paid $278 million for the Palm Beach Outlets in West Palm Beach.

The Outlets, located at 1751 Palm Beach Lakes Road, is a 460,000-square-foot shopping center that opened last year. It was built on the former site of Florida’s first indoor shopping center, the Palm Beach Mall, which fell into serious disrepair in the late 1990’s. Tenants and shoppers alike fled from the location, and it was finally redeveloped by owners New England Development, Eastern Real Estate and Lubert-Adler.

After the new development was mostly leased — 97 percent when TRD reported the sale in June — the trio of owners sold the mall for about $604 per square foot to Clarion. New England Development also stayed on as one of the new buyers.

#4 James Royal Palm, $278M

While most of the U.S. was still thawing from winter frost, the Chesapeake Lodging Trust was making waves in South Beach.

The Maryland-based REIT paid $278 million for Miami Beach’s James Royal Palms Hotel in February, marking South Florida’s fourth-most expensive commercial sale in 2015.

When it was first listed, rumor had it that the 393-room hotel would trade for more than $800,000 per room when it finally sold. Despite the actual price coming in much lower than that — about $700,000 per room — it was still to pricey for the bid by Don Peebles of the Peebles Corp.

The James Royal Palm, located at 1545 Collins Avenue, was sold by private equity firm KSL Capital Partners. After first acquiring the Royal Palm in 2011, KSL spent a whopping $42 million on renovations and launched it with a new name: James Royal Palm.

Chesapeake dropped the James brand name soon after its acquisition, naming it instead the Royal Palm South Beach.

#5 Phillips Point, $245.5M

Last but certainly not least was the $245.5 million sale of the Phillips Point office towers in West Palm Beach.

In June, investment manager AEW Capital Management paid nearly $600 per square foot for the pair of office buildings, which together house about 410,469 square feet. They were built in the 1980s and are are located at 777 Flagler Drive and 201 Lakeview Avenue on a three-acre stretch of waterfront land.

The seller was Prudential Real Estate Investors, the property investment arm of insurance company Prudential Financial.

Even the tenants in these buildings are heavyweights: Goldman Sachs, law firm Greenberg Traurig, AMG Wealth Management and BMO Harris Bank.

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