Starwood Capital, LeFrak Sell Miami Hotel for $610M
- Feb 21, 2019
Starwood Capital Group and LeFrak have sold 1 Hotel South Beach, a 429-key luxury hotel property in Miami Beach, Fla., to Host Hotels & Resorts in a transaction valued at $610 million, or approximately $1.4 million per key.
1 Hotel South Beach last changed hands in 2012, when Starwood, LeFrak and Invesco Ltd. acquired the oceanfront property, then known as the Gansevoort, with a $100 million plan to transform it into a premier resort. Three years and $300 million later, the property debuted as the first asset to operate under the nature-inspired 1 Hotel lifestyle brand. The 1.1 million-square-foot destination features 160,000 square feet of meeting space, eight food and beverage options, an 18,000-square-foot wellness center and spa and 23,000 square feet of upscale retail space, as well as 155 1 Homes-branded luxury condominium residences.
Starwood will still have a connection to 1 Hotel South Beach, as its affiliate, SH Hotels & Resorts, will continue in its role of operator and manager of the property under new owner Host Hotels. “We wanted a partner who would continue to invest in the hotel’s future, our new amenities in planning, and in our green mission,” Barry Sternlicht, chairman & CEO, Starwood Capital Group, said in a prepared statement. “It is rewarding to launch the first mission-driven hospitality brand and have it be recognized by discerning luxury travelers and by the investment community.”
Starwood relied on Hodges Ward Elliot to serve as broker on the transaction.
The 1 Hotel South Beach trade is a head-turning occurrence in the Miami investment sales market. In the 12-month period ending in the fourth quarter of 2018, 15 properties traded in Miami in transactions totaling $216.6 million, according to a report by commercial real estate services firm CBRE.
The outlook for Miami, a top 5 U.S. hotel market, is bright. Market demand is on track to keep pace with the average annual growth in hotel supply until 2022, per the report.
Image courtesy of Eric Laignel