Hotel construction is up in South Florida – Hotel MarketJune 1, 2018
Hotel construction is up in South Florida with a number of properties slated to come online this year, amid heightened demand following last year’s hurricanes.
Nearly 4,200 new hotel rooms and 2.8 million square feet of space will be completed within the next two years in the tri-county area, according to Lodging Econometrics data analyzed by Colliers International South Florida. Of the total, 3,158 keys will be delivered in 22 new hotels totaling 2.1 million square feet, by the end of this year.
That’s a nearly 71 percent increase from 2017 to 2018.
“Generally, the new supply is being added in areas where there have been demand holes,”
Wijtenburg pointed to the recent opening of Hyde Suites & Residences Midtown Miami, the first hotel to be built in the Midtown neighborhood. The 32-story development, built by the Related Group and Dezer Development, includes a boutique hotel “that’s not quite big enough to challenge Miami Beach,” he said.
“It’s 60 rooms, so it’s not going to be struggling to fill the rooms in low season. That kind of a property is what we’re seeing in these infill urban locations,” Wijtenburg added.
Related and Dezer sold the hotel for $21.8 million, or about $363,000 per key, before the building was completed.
Miami’s hotel market plummeted in 2016 and 2017, thanks in part to the strong U.S. dollar, the Zika outbreak and the rise of short-term rental platforms like Airbnb. But it’s been showing signs of recovery following the hurricanes that hit the Florida Keys and the Caribbean last year, with occupancy, revenue per available room and demand rising this year.
“It’s been a really great perfect storm over the past six months, which is the opposite of what we had two years ago,” Wijtenburg said.
Mauricio Bello, managing director of Waterstone Capital, recently completed the Candlewood Suites, a 130-key extended stay hotel near Miami International Airport at 5911 Northwest 36th Street, with plans for more in South Florida.
Waterstone also has approvals for a 144-key Holiday Inn near the Fort Lauderdale–Hollywood International Airport and another InterContinental Hotels Group-branded hotel adjacent to the Candlewood in Miami. The Bay Harbor Islands-based investment firm is spending nearly $70 million on the three properties, Bello said.
In Coral Gables, Sunview Companies and HES Group recently completed a seven-story, 137-room Aloft hotel at 2524 South Le Jeune Road with 34 extended-stay suites.
In Miami’s Brickell neighborhood, a joint venture between Aztec Group and Concord Hospitality recently opened the Hyatt Centric Brickell Miami, a full-service, 308-key hotel at Florida East Coast Realty’s Panorama Tower.
And in downtown Fort Lauderdale, a dual-branded Element and Tribute hotel is set to open Aug. 30, according to its website. The Wurzak Hotel Group and DoveHill closed $56.1 million in construction financing from Bank of the Ozarks for the 323-key development in 2016.
Among other hotels in the works, Driftwood Acquisitions & Development, a Coral Gables-based hospitality investment and development firm, is breaking ground in early June on another dual-branded property in Fort Lauderdale. The 19-story building with have a 106-keyHome2 Suites and a 112-room Tru by Hilton, at 315 Northwest First Avenue. The company is also building a 150-room Canopy by Hilton hotel in downtown West Palm Beach, which is slated to open early next year.
But not every hotel that’s being proposed will get built, experts say. In October, HES Group secured a $9.5 million loan for a mixed-use hotel development in Midtown Miami, about two years after the city of Miami first approved the project. Records show the developer has not yet broken ground on the project.
“There are a lot of projects that are proposed. In some cases it’s a dream,” Wijtenburg said. “One thing that we’ve seen is that the capital markets have been very cautious on new hotel construction.”
22 hotels with more than 3k rooms set to open by year-end, with Hyde Midtown, Hyatt Centric at Panorama recently opened
Source Credit – The Real Deal South Florida