Miami Beach a top market for hotel investment in 2015: report

Miami /
Jun.June 02, 2016 03:00 PM

Hotel investors across the country spent a record $40.5 billion on hotel buys, new projects and new capital in 2015, according to a new STR report. 

And Miami Beach was among the top three markets, preceded by New York and San Francisco, in terms of price per hotel room and No.2 behind New York in terms of building cost.

In Miami Beach, hotel rooms sold for an average $660,000 and cost an average $832,000 to build, according to an STR spokesperson. On Wednesday, the Viceroy Miami sold for $64.5 million to a Qatari investment firm, a deal that broke down to $436,000 a room.

“With many markets at record demand levels, adding new rooms to accommodate the growing demand makes investment sense,” Steve Hennis, vice president of consulting and analytics at STR, said in the report. “However, the risk is market timing given the lag time in construction. As we see in many of the oil and gas regions today, new hotels are entering the marketplace at a time when the supply and demand dynamic has inverted, creating a glut of struggling properties.”

The U.S. saw 773 hotels open last year, a 36 percent increase from 2014. Those hotels added 85,000 new rooms to the market. This year, more than 900 hotels with more than 100,000 new rooms are expected to open. In 2016, hotel sales volume is expected to top $25 billion, according to STR.

In Miami, a number of new hotels have opened so far this year, including East at Brickell City CentreAtton Miami Brickell, Homewood Suites Brickell and the Langford Hotel in downtown Miami. At least 11 hotels with 1,805 rooms opened in the county last year, the majority of which were in Miami Beach.


Related Articles

arrow_forward_ios
MCR’s Tyler Morse, Park Hotels & Resorts’ Thomas Baltimore and the Hilton Miami Airport Blue Lagoon at 5101 Blue Lagoon Drive
MCR drops $118M for Hilton Miami Airport Blue Lagoon
MCR drops $118M for Hilton Miami Airport Blue Lagoon
Trinity CEO Sean Hehir, Related CEO Jorge Pérez, BH Group’s Isaac Toledano and the Diplomat Beach Resort in Hollywood, Florida
Trinity and Credit Suisse to buy Hollywood’s Diplomat for $850M
Trinity and Credit Suisse to buy Hollywood’s Diplomat for $850M
Cushman & Wakefield’s David Greenberg and Christopher Passeggiata
Cushman & Wakefield hires Marcus & Millichap’s hospitality team
Cushman & Wakefield hires Marcus & Millichap’s hospitality team
From left: Tricap’s David Edelstein and RFR’s Aby Rosen with 2201 Collins Avenue
RFR, Tricap file dueling lawsuits for control of W South Beach
RFR, Tricap file dueling lawsuits for control of W South Beach
Jesta Group’s CEO Elliott Aintabi with a rendering of the project (Kobi Karp, Getty)
Jesta wins approval for apartment, hotel project on Shuckers site
Jesta wins approval for apartment, hotel project on Shuckers site
Up for vote this week: Aman Miami Beach, medical marijuana zoning in Miami
Up for vote this week: Aman Miami Beach, medical marijuana zoning in Miami
Up for vote this week: Aman Miami Beach, medical marijuana zoning in Miami
William Wiener with 432 Northeast 27th Street
Coral Gables investor adds another dev site to Edgewater portfolio
Coral Gables investor adds another dev site to Edgewater portfolio
From left: Nadim Ashi, Craig Robins, and Stuart Rothstein along with 3925 North Miami Avenue (Getty, LoopNet, Apollo Commercial Real Estate Finance)
Craig Robins, Fort Partners and Qatari hotelier buy Apollo site in Design District
Craig Robins, Fort Partners and Qatari hotelier buy Apollo site in Design District
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...