Chill Deal: Margaritaville Resort in South Florida Sells for $127M
- Apr 23, 2018
Private equity firm KSL Capital Partners LLC, of Denver, has acquired the 17-story, 349-key Margaritaville Hollywood Beach Resort, in Hollywood, Fla., KSL announced.
Financials on the deal were not disclosed, but the Miami Herald reported, based on county property records, that the price was $126.5 million: $97.9 million for the resort and $28.6 million for the ground lease.
KSL did not reply to Commercial Property Executive’s request for additional information.
The AAA Four Diamond-rated resort, reportedly the flagship property for the Margaritaville brand, features eight restaurant and bar concepts, including Jimmy Buffett’s Margaritaville, LandShark Bar & Grill and the Five o’ Clock Somewhere Bar & Grill; a full-service spa; three pools; a fitness center; a variety of shopping outlets; 30,000 square feet of flexible function space; and three live entertainment venues, all in an oceanfront setting.
The location is only minutes from the Fort Lauderdale-Hollywood International Airport and Port Everglades, a major cruise and container port.
Davidson Hotels & Resorts, of Atlanta, will manage the resort for KSL Capital Partners.
Good and bad deals
In a late 2017 survey of South Florida hospitality sector executives, consultancy EY found agreement that in the South Florida market, “there are good deals and bad deals; the focus needs to be on specific asset and submarket considerations.”
More specifically, capital markets perceive Miami as slightly oversupplied, and buyers are often seeking opportunities to “create value from stagnant assets.” On top of the lack of a convention center, Miami had issues because of the Zika virus outbreak in 2015 and 2016.
The most-cited barriers to hotel deals in South Florida, according to EY, are low returns and high development costs. Roughly a third of those surveyed believe that alternative lodging, such as Airbnb, will have a significant impact on future development, while a quarter cited natural disasters and rising sea levels.
Image via Google Street View