Investor drops $10M on South Beach hostel

Investor Adam Hyatt bought the SoBe Hostel in Miami Beach for $10 million, with plans to upgrade the property to a hotel.

Property records show Hyatt’s entity bought the 48-room hostel at 235 Washington Avenue from 235 Sobe Hospitality LLC, led by Jack Avid and Steven Oved. The price equates to about $208,000 per room. Hyatt financed the deal with a $7.5 million loan from Dade County Federal Credit Union.

The hostel, which has a bar in the lobby, was last purchased in 2015 for $8.23 million. It was built in 1938.

Hyatt said he plans to spend $2 million to renovate the property while it remains open, including adding a “high-end,” as yet undisclosed cafe to the lobby, updating the bar and replacing furniture in all the rooms. He plans to rebrand the hostel as a hotel in December, but is still working out the details.

The hotel will have a communal space including a shared kitchen. Hyatt, an early backer of hospitality guest management technology provider Intelity, plans to make the hotel more “tech-driven” by having Intelity provide keyless entry, so guests can check in through their smartphones. They can also order from My Ceviche — a tenant at the building — and arrange bikes and kayaks, he said.

Daily room rates will average about $180, Hyatt said.

Hyatt also owns two lots adjacent to the hostel, which he purchased in 2015 for $8.25 million. He said he is still considering plans for those parcels.

In 2015, Miami Beach approved measures designed to increase hotels and expand retail and dining opportunities on Washington Avenue, which have attracted investment to the street. Earlier this year, commercial real estate firm KLNB picked up a CVS-anchored building at 938 Washington Avenue for $18.3 million. Across the street, Lightstone Group’s 202-key hotel is under construction at 915 Washington Avenue. And three blocks south, Imperial’s Michael Fascitelli and Eric Birnbaum are building a seven-story, 300-key hotel at 601 to 685 Washington Avenue.