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

Miami Beach a top market in terms of sale price by room and building costs

TRD 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
Cavalier and Henrosa hotels with Susan Gale of One Sotheby’s International Realty

Two South Beach hotels hit the market for $42M

A rendering of Arlo Wynwood

Quadrum Global plans Arlo hotel in Wynwood

Daily Digest Miami

Forever 21’s Lincoln Road store among planned closures, downtown Miami office building hits the market: Daily digest

Alexandra Lalos and Max Comess

Hodges Ward Elliott to open Miami office with former HFF brokers

Michael Dell and the Boca Raton Resort & Club

Here are the numbers behind Michael Dell’s record purchase of the Boca Raton Resort

(Credit: iStock)

Houston, we have a reservation: First luxury hotel in outer space set to open in 3 years

South Florida’s biggest hotel sales in 2018

South Florida’s biggest hotel sales in 2018

North Miami Beach property approved for hotel development sells for $11.38M

North Miami Beach property approved for hotel development sells for $11.38M

arrow_forward_ios
Loading...