Lowe Enterprises Arranges $51M Construction Loan for Miami Hotel
- Nov 21, 2011
November 21, 2011
By Barbra Murray, Contributing Editor
The road has been paved for the former Ritz Plaza Hotel in Miami Beach to be reborn as the 142-room SLS Hotel South Beach with the closing of a $51.2 million construction loan. Lowe Enterprises Investors orchestrated the loan, which the hotel owners, CIM Group and sbe’s SLS Hotel group, will utilize to renovate and redevelop the historic property.
LEI secured the financing, which comes in the form of a three-year loan with two one-year options, on behalf of a pension fund client. “This investment reflects our clients’ increased interest in real estate debt,” Bleecker Seaman, CEO of LEI, told Commercial Property Executive.
Carrying the address of 1701 Collins Ave., the oceanfront property first opened its doors in 1939 just 100 feet from the waves. The structure, an architectural marvel designed and built by famous local architect L. Murray Dixon, holds the title of the tallest art deco building in South Beach. SBE and CIM will transform the property with the development of 10 bungalow suites and a 14,500-square-foot pool deck, the remodeling of the existing 132 guestrooms and the addition of two popular new dining destinations and 8,000 square feet of indoor/outdoor lounge. Renovations have already gotten underway and the new SLS Hotel South Beach will make its debut in spring 2012.
Hotel developments are not exactly on the top of lenders’ list of preferred risks these days, so new project announcements in the lodging world are limited. “Developers are introducing projects at the early planning stage and continuing their planning, but are awaiting improvements in the financing environment and lodging operating metrics before advancing forward toward construction,” Lodging Econometrics reports in its forecast for new hotel openings for 2013. The pipeline of newly announced projects is on the downswing and is “insufficient to offset total new openings and project cancellations exiting the pipeline.
The hotel market in Miami Beach, however, has been experiencing a major upswing that kicked off last year. The submarket achieved the highest RevPAR of any submarket in 2010 and the second highest RevPAR growth from 2009 to 2010, according to a recent report by HVS Consulting and Valuations Services.