Henley Investments Picks Up Miami Beach Hotel
- Aug 15, 2019
Private equity firm Henley Investments has acquired its fourth boutique hotel in metro Miami with the purchase of Lord Balfour Hotel for $34.7 million. The deal is reportedly Henley’s largest U.S. hotel acquisition to date.
Life House, a company that frequently collaborates with Henley, will manage the asset. The total project capitalization, including acquisition and renovation costs, is in excess of $40 million, Life House’s vice president of acquisitions and business development, Bryan Dunn, told Commercial Property Executive.
The 81-key hotel is located at 350 Ocean Drive in Miami Beach’s South of Fifth neighborhood. Life House will initially operate the hotel under its historic name, but plans to undertake a comprehensive renovation that will update all guest rooms, suites and public spaces, as well as build out a fitness center and yoga studio.
Following renovations, the hotel will be rebranded as Life House Ocean Drive and will join Henley’s current roster of lifestyle hotels in Miami: the 33-key Life House Little Havana on 9th Avenue, the 26-key Life House South Beach on Collins Avenue and the 50-key Life House Mid Beach on Park Avenue.
Last month, Life House received $100 million in equity commitments from
Boston-based Blue Flag Partners which was anticipated to enable Life House to acquire between 7 and 10 hotels. Life House had recently taken over management of The Roberts Collection, an historic 58-room hotel in Nantucket, Mass., which Blue Flag had purchased in April.
Last year, the Miami hospitality market saw a 2 percent increase in supply, but this was offset by a 2.5 percent increase in demand, as metro-wide ADR rose by 2.4 percent, according to a report from HVS. Average occupancy for the year was 76.7 percent, barely above the figure for 2017, but RevPAR rose at a nearly nation-leading pace.
Still, HVS cautioned, first-quarter 2019 results point to some softening of RevPAR, though Miami Beach is one of the few submarkets to see this metric increase, mostly driven by ADR growth.