NYT: Hotel investors flocking to Miami Beach

The New York Times makes a compelling case for why hotel investors are bullish on the Miami market. As it writes, "Real estate investors seem to be flocking to Miami Beach, in hopes of capturing part of the market’s resurgent tourism industry by acquiring, or by expanding their investments in, the limited supply of hotel properties."

A slew of hotels along or near the beach have been acquired and either renovated or rebranded. "Buoyed by an economic rebound in tourism after the recession initially drove away some business, competitive bidding has pushed prices for some hotel properties to record highs. Venerable establishments along Miami Beach’s Art Deco district that have undergone makeovers include the Royal Palm and the Ritz Plaza, and a renovation is under way at the former Gansevoort."

The article goes on to quote Christian Charre of the Charre Group who says that a fully renovated hotel on one of Miami Beach’s main drives along the Atlantic—either Ocean Drive in South Beach, or Collins Avenue north of 15th Street—would sell today for $500,000 to $900,000 per room, equivalent to prerecession prices, Mr. Charre said.

For unrenovated hotels, "you will see transactions happening now at about $250,000 per key, but you have to consider that a significant amount of money is going to be invested in the property," he said. "They’ll end up at about $500,000 a key."

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