Barry Sternlicht’s 1 Hotel South Beach is being marketed for sale, several sources told The Real Deal.
When it sells, the trophy property could mark a record for the most expensive hotel deal of all time in Miami. If it sold at $1 million a key, it would beat a record held by the Ritz-Carlton Key Biscayne, which traded hands a year ago for $325 million.
Atlanta-based hotel real estate firm Hodges Ward Elliott is the listing brokerage for 1 Hotel, according to multiple sources. A message left for an executive was not immediately returned.
The LEED-certified hotel and condo development opened last year as part of a joint venture between Sternlicht’s Starwood Capital Group and LeFrak. 1 Hotel, at 2341 Collins Avenue, was developed on the site of the former Gansevoort Hotel, which also operated as the Perry South Beach.
Spokespersons for both Starwood Capital and 1 Hotel declined to comment on the 426-key hotel’s listing.
“That’s obviously a very iconic property in a great location,” Paul Weimer, a vice president of CBRE Hotels, told TRD about the Miami Beach property.
Weimer said the hotel market in Miami is strong, but that it’s currently weaker on the operating side.
A deal of that size would likely sell to a foreign buyer, like a sovereign wealth fund, or a large institutional investor, sources said. Just two weeks ago, the Viceroy Miami sold to Al Rayyan Tourism Investment Company, a Qatari investor for $64.5 million. ARTIC, which also paid more than $1 million a room for the St. Regis Bal Harbour in 2014, told TRD it is not involved in a deal to purchase 1 Hotel. Hodges Ward Elliott brokered both the Viceroy and St. Regis deals.
Regardless, the Viceroy sale could be an indicator of more foreign investment to come, experts say.
At the NYU Hospitality Industry Investment Conference last week, the CEO of Hilton Worldwide said he expects more investment in U.S. hotels from the Middle East, specifically. “I think this is the peak of the iceberg,” Christopher Nassetta said. “When you wake up 10 or 20 years from now, you’ll find that a lot more assets are held by global players than today.”
Last year, Marriott International sold the Miami Beach Edition hotel for $230 million to the Abu Dhabi Investment Authority.
Other high-priced South Florida hotel sales in the past two and a half years include the Westin Diplomat Resort & Spa in Hollywood for $460 million in August 2014; the Ritz-Carlton Key Biscayne for $325 million in June 2015; and the James Royal Palm in Miami Beach for $278 million in March 2015.
On a per key basis, hotel sale have peaked at $1.076 million for the Ritz-Carlton Key Biscayne.
For Sternlicht, the South Beach hotel is the first of the 1 Hotels brand to open. Other properties include 1 Hotel in New York’s Central Park and 1 Hotel Brooklyn Bridge, the latter of which is set to open later this year.
The hotel includes three Tom Colicchio-branded restaurants, four outdoor swimming pools, 57 cabanas and daybeds and an 18,000-square-foot gym and spa. Property records show affiliates of Starwood, LeFrak and Invesco acquired the property in 2012.
Here’s a breakdown of the most expensive South Florida hotel sales from Janary 2014 to date, based on total price:
|Hotel||City||Sale price||Sale date||Buyer|
|Westin Diplomat Resort & Spa||Hollywood||$460M||August 2014||Thayer Lodging Group|
|Ritz-Carlton Key Biscayne||Key Biscayne||$325M||June 2015||Carey Watermark|
|James Royal Palm||Miami Beach||$278M||March 2015||Chesapeake Lodging Trust|
|Residences at W Fort Lauderdale||Fort Lauderdale||$234M||July 2014||Related Companies|
|Edition Miami Beach||Miami Beach||$230M||February 2015||Abu Dhabi Investment Authority|