Hersha Signs Deal to Buy Cortyard Miami Beach Oceanfront for $95M
- Nov 11, 2011
Hersha Hospitality Trust is preparing to enter the Miami market by signing a purchase contract to acquire the Courtyard Miami Beach Oceanfront. Hersha has agreed to pay $95 million, or $361,217 per key, for the 263-room hotel and an adjacent beachfront land parcel.
The Courtyard Miami Beach Oceanfront, originally constructed as the art deco Cadillac Hotel, was reopened in 2004 after a complete restoration, followed by extensive renovations earlier this year when it was rebranded as a Courtyard hotel. The hotel, occupying an entire block of oceanfront property, is the only franchised Marriott hotel in the Miami Beach market. The hotel also features 7,200 square feet of a casual dining restaurant, leased to Carrabba’s Italian Grill and the 138-seat Tiki Beach Bar, while also generating income from parking, a Starbucks, 2,700 square feet of meeting facilities, onsite spa services and beach rentals.
Hersha Hospitality Trust—a self-advised real estate investment trust—currently owns 79 hotels in major markets including New York, Washington, Boston, Philadelphia and Los Angeles. “We are excited to expand our presence into one of the strongest lodging markets in the country with the acquisition of our first hotel in Miami,” stated Jay H. Shah, chief executive officer.
Included in the acquisition is the adjacent land parcel that has received approval from the Historic Preservation Board for the construction of an additional 93-room oceanfront tower, additional meeting space and structured parking. The trust plans to commence construction of this tower in 2012 and anticipates that the construction would be completed in late 2013 with an estimated cost of $200,000 per room.
According to an official release, the acquisition of the hotel is subject to a variety of conditions, including the receipt of lender and franchisor consents and the satisfaction of other customary closing conditions. The acquisition is anticipated to be funded by assuming $30.7 million of existing debt, cash on hand and borrowings drawn on the trust’s line of credit. Hersha anticipates closing on the acquisition in the fourth quarter of 2011 and expects to refinance the first mortgage loan in June 2012.
Photo Credits: Marriott International, Inc.