The buzz is that 1 Hotel South Beach is currently up for sale, and when it does sell, there is a chance the it could be the most expensive hotel deal the city of Miami has ever seen. It could potentially sell at $1 million per key, and if that were to happen it would be an even bigger deal than the current record, which goes to Ritz Carlton Key Biscayne, which sold for $325 million in 2015. There are 426 keys at 1 Hotel South, so if they really were to sell for a million apiece, it would easily eclipse the sale of the Ritz Carlton Key Biscayne.
While it wasn’t confirmed, most believe that Hodges Ward Elliot, a hotel real estate firm based out of Atlanta, is listing the hotel. However, the details are very scant, and at the time, no one is talking.
Who Could Buy the Hotel?
Naturally, it would take extraordinary wealth to make a purchase this large, and most believe that it would be a foreign buyer. It happens with regularity in the area. In June, Al Rayyan Tourism Investment Company out of Qatar bought Viceroy Miami for $64.5 million.
Since Hodges Ward Elliot is the likely brokerage firm, many have wondered if the buyer is ARTIC, which bought the St. Regis Bal Harbour for more than a million a room in 2014. ARTIC has denied that they are a part of this plan and that they do not have any intent to purchase 1 Hotel.
This doesn’t necessarily mean that it is a foreign investor who will be making the purchase, of course. It just means that some signs are pointing that way, and that there likely going to be quite a few more cases of large foreign investment in the future.
The CEO of Hilton Worldwide recently said that he believes that there will start to be quite a bit more investment in US hotels from Middle Eastern investors. Over the course of the next few decades, he feels that there will assets held by people outside of the country. A prime example is the sale of Marriot International in 2015. It sold for $230 million to the Abu Dhabi Investment Authority.
Other High-Priced Hotel Sales
There have been quite a few other large hotel sales over the past few years as well. In 2014, the Westin Diplomat Resort & Spa fold for $460 million, and the James Royal Palm sold for $278 million in early 2015. Residences at W Fort Lauderdale sold to Related Companies in 2014 for $234 million.
What Does It Mean for the Hotel?
If the sale occurs as most sales do, it isn’t going to mean too much of a difference for the day to day operations of the hotel. Whoever the hotel sells to, it will be interesting to see what happens and how much the final price will be.