Carey Watermark Puts on the Ritz in Key Biscayne
- Jun 02, 2015
In a joint venture with an affiliate of GB Key Biscayne Holdings LLC, the property’s developer, Carey Watermark Investors Inc. and Carey Watermark Investors 2 Inc., have acquired a majority interest in the Ritz-Carlton Key Biscayne, Miami, Carey Watermark announced Monday. A dollar amount for the transaction was not released. The two purchasers are publicly registered, non-traded REITs focused on investing in lodging and lodging-related properties.
Working with GB Key Biscayne Holdings, we were able to recapitalize the asset to allow for ongoing renovations and secure attractive current risk-adjusted returns with the potential for longer-term incremental value.” Michael Medzigian, CEO of the Carey Watermark Investors investment programs, said in a statement. “The combination of a high-quality asset in an unmatched location with the strength of The Ritz-Carlton brand represented a unique and attractive investment opportunity.”
The AAA Four-Diamond hotel will continue to be managed by the Ritz-Carlton Hotel Co. L.L.C., an affiliate of Marriott International.
The property features 302 resort guestrooms, including 38 suites and 188 condo-hotel units, of which 174 units participate in the resort rental program. It also features 20,000 square feet of meeting and banquet space; 30,000 square feet of exterior function space, including two pool decks; a recently renovated 20,000-square-foot spa; a full-service fitness center; a tennis center with 10 clay courts and one hard court; two pools; and five primary food and beverage outlets.
The resort was completed in 2001 and recently underwent a full renovation of the lobby, spa and two of the food and beverage outlets. A renovation of the guestrooms is planned for 2016, with all of the rooms and condo units scheduled to receive a replacement of all soft goods, plus various bathroom upgrades. In addition, the property’s signature restaurant, Cioppino, is to undergo “a significant repositioning.”
The buyer’s announcement emphasized the high barriers to entry on Key Biscayne, an island about three miles off the coast of Miami, where the resort sits on 17 acres of oceanfront land. Carey Watermark also noted that in 2014, Miami was the fourth-highest U.S. market in terms of overall RevPAR, after only New York, Oahu and San Francisco.
Though Miami’s hotel occupancy is forecast to fluctuate only a little from last year’s 78.3 percent, ADR is predicted to climb by 8.3 percent this year (to $200.29) and by 5.4 percent in 2016 (to $211.12), according to the June Hotel Horizons Forecast from STR Inc. and PKF Hospitality Research.
Carey Watermark has been busy lately with both top-rank and mid-range hospitality properties. Just within the last couple of weeks, CWI 2 bought the Courtyard Nashville Downtown for $56.5 million, and CWI picked up a majority interest in the historic Ritz-Carlton Philadelphia, in a joint venture with the previous sole owner.