By the time the duo formed Menin Hotels in 2009, the hotel industry had hit a recession-era brick wall. The portfolio grew bit by bit: the 51-room Bentley on Ocean Drive was added in 2010, followed by the massively renovated Shelborne in 2011. They still maintain ownership of Shelborne, but brought Wyndham Hotels & Resorts on as the management company earlier this year.
The company says that new marketing plans and improved management helped grow revenue and cut expenses at both properties between 2011 and 2012. Gross revenues increased at the Bentley by 25 percent that year and 16 percent at the Shelborne, Galbut said. Menin said the company is profitable.
As the company has added rooms across the beach, so have investors from all over the world. In 2011, hotel sales in Miami-Dade jumped 154 percent as transaction volume reached more than $550 million, according to Jones Lang LaSalle Hotels. Last year saw another increase, to $624 million.
All around the Shelborne, hotels have been re-imagined, renovated and re-opened and the company is feeling the pricing pressure as it looks to future growth.
Theres a couple hotels in that area that are just dying to be bought, said Jared Galbut. Everyone has raised their prices, so now it doesnt make sense. We like to recreate properties with the history behind them and a little modern-day twist. Its just tough now with the prices some people are asking.
Gregory Rumpel, managing director of Jones Lang LaSalle Hotels in Miami, said values over the past three years have appreciated at a compound annual growth rate approaching 20 percent.
While other investors are finding deals farther north or west on the beach, or on the mainland, Galbut said he and Menin both residents of Miami Beach are keeping their focus selective and south.
We stick to what were good at, he said. These 22 blocks are our home and what we know inside and out.
The Gale property, which Morgans Hotel Group bought from the family several years ago to turn into an expansion of the chic Delano, became part of the portfolio after Morgans decided not to develop it and turned it back over. Occupancy ran at 99 percent in the months after the December opening, Galbut said.
I was screaming and yelling after the first three months that we needed more rooms, he said. The cousins looked across the street and realized their solution was in the Kaskades apartments, which will get a $15 million renovation to become the Gale Suites at Kaskades with 27 suites by next spring.
Galbut said the company lets each city and property dictate the target market. When Sanctuary opened, it was described as a safe, comfortable environment for women traveling alone, for example. And Raffaello in Chicago is geared toward business travelers.
But the company is still seen as youth-oriented.
Jeff Lehman, general manager of The Betsy, an upscale boutique on South Beach, said Menin Hotels appears to be catering still to a younger demographic a drinking, partying, loud-ish music demographic.
Indeed, the company hosted visitors and parties for this years Winter Music Conference at Shelborne, and the underground Rec Room at the Gale is getting buzz for its parties.
I think that as a lot of other properties are capitalizing on different markets, that theyre still working that market, which is very important for us on an ongoing basis, said Lehman, chair of the Miami Beach Visitor and Convention Authority, a seven-member board on which Menin also serves. By capturing young crowds, Lehman said, Menin Hotels has the potential to encourage repeat visits as guests get older.