This hotel sold for $120M. Rising room rates in Miami Beach appealed to the buyers.
Demand is still high for hotels in Miami Beach, say the new buyers of the Shelborne South Beach. And it’s all thanks to growing room rates.
The New York-based real estate investment trust W.P. Carey sold its 207,565-square-foot corner-lot condo-hotel at 1801 Collins Ave. for $120 million in late January, said Jared Galbut, managing principal of Menin Hospitality. Menin managed the hotel prior to the sale and will continue to do so under the new ownership.
The sale included 221 hotel rooms of a total 275 units to a joint venture between London-based Cedar Capital Partners, New York-based investment firm King Street Real Estate and Dallas-based asset management team Westdale Properties.
The price works out to $542,986.43 per room.
The same partnership also purchased 30 condo units for about $20 million. It will convert the condo units to hotel rooms by the summer.
Brokers Christian Charre, Paul Weimer and Jennifer Jin of the commercial brokerage firm CBRE represented W.P. Carey in the transaction.
“Hotel room rates are growing since 1987, and the amount of supply is not keeping up with demand,” said Ben Leahy of Cedar Capital Partners.
The previous owner held the property for about five years, Charre said. A two-year renovation of the lobby, library and drawing room completed in 2014 increased the property’s value, spurring W.P. Carey to list it in January 2018, Charre said.
The buyers were attracted to the building’s corner location — providing natural light — and design that gives 60% of rooms ocean views, Leahy said. The reopening of the Miami Beach Convention Center in late 2018 enhanced its appeal. The Shelbourne is located a five-minute walk from the center.
The sale took longer than average to close because of the hotel-condo ownership structure, Charre said. But, he said, “The value of the real estate is very strong. You still have buyers going after real estate even if it is complicated... Miami has a strong appeal with the hotel business because we have international players, not just domestic visitors. You have high competition for the asset.”
The new owners plan to refurbish about 80 rooms closed since Hurricane Irma swept through in 2017, Galbut siad.
“The Shelborne was getting into a new stride before getting taken down by the hurricane. Now, we’re back on track,” Galbut said.
A mid-week stay in late February starts at $304 per night when purchased in advance, according to the hotel website.
The hotel will have a total of 251 hotel rooms available by the summer, Leahy said. The condo units will undergo renovations, including receiving new furniture and mini-fridges for food and beverages.
This story was originally published February 4, 2020 at 5:11 PM.
