Chesapeake Lodging Buys Hotel Resort in South Beach
- Mar 11, 2015
Chesapeake Lodging Trust has acquired The James Royal Palm, a 393-key luxury hotel in Miami’s popular South Beach, from KSL Capital Partners, L.L.C. for $278 million.
It’s a deal that has been in the works for a while. In fact, during Chesapeake Lodging Trust’s Fourth Quarter conference call last month, it was announced that it had reached a definitive agreement to purchase the Miami hotel.
“We are very excited to announce our entrance into the highly desirable Miami South Beach market with the pending acquisition of The James Royal Palm,” James Francis, Chesapeake Lodging Trust’s president & CEO, said during the conference call. “The Royal Palm, which recently underwent a comprehensive renovation, has an irreplaceable oceanfront location at the intersection of Collins Avenue and 15th Street. We believe the hotel has significant upside potential in both revenue and profitability and we are happy to partner with both HEI Hotels & Resorts, as the new hotel manager, and Starwood Hotels & Resorts, as the franchisor, on this project.”
During the call, Francis also discussed that dividends increased during the first quarter of 2015 by 17 percent to $0.35 per common share.
Chesapeake Lodging Trust entered into a new management agreement with HEI Hotels & Resorts to operate the hotel and a new franchise agreement with Starwood Hotels & Resorts and will now be affiliated with Starwood’s new brand for independent hotels.
Located at Collins Avenue and 15th Street, in the heart of South Beach, the Royal Palm is considered an iconic Art Deco hotel and includes 164 suites and 141 rooms offering ocean views.
Hotel amenities include a full-service spa, a fitness center, two separate swimming pools, and access to a private Royal Palm beach area with 300 chaise lounges and day beds along with beach side bar services.
KSL had owned the property for nearly four years and helped transform it into one of the preeminent hotels in Miami, thanks to an extensive $50 million renovation and repositioning that was completed in 2012.
The hotel offers nearly 5,700 square feet of dedicated meeting and banquet space throughout six different meeting areas, including its 2,600-square-foot Great Room, which can accommodate up to 300 guests. There is also an additional 16,000 square feet of flexible outdoor meeting space via multiple patios and decks.
It also boasts numerous food and beverage outlets for guests and visitors spread throughout the resort, including The Florida Cookery, a lobby lounge bar and Byblos, The Royal Palm’s featured restaurant.
“The hotel is in excellent shape and conveys the contemporary feel of South Beach,” Francis added. “We will execute upon our business plan that includes minor changes to the product offering, but we anticipate no disruption as we reposition the property.”