Get ready for more blockbuster hotel deals.
Fresh off one of the best winter tourism season in years, the market for hotel acquisitions is hot. Institutional investors in particular are scouting for luxury properties in high-demand locations such as Naples. Possibly even Sarasota.
Consider: Pebblebrook Hotel Trust recently paid $185.5 million for LaPlaya Beach Resort & Club in Naples. That's nearly $1 million per room for the 189-room resort.
The Sproul family of Naples, through their company Halstatt, along with partner Noble House Hotels and Resorts, acquired LaPlaya in 2000 for $48.3 million, according to Collier County property records. Since then, Halstatt says it has spent $54 million to renovate the property at 9891 Gulf Shore Drive, including adding a beach club in 2002.
It's no surprise luxury beachfront hotels are selling for nearly $1 million a room. For example, hoteliers in the Naples area pushed the average daily rate up 12% to nearly $300 in the first quarter compared with the same quarter one year ago. The average occupancy rate reached nearly 90% in the first quarter, giving hoteliers comfort that raising rates won't hurt business.
That's why cash-heavy institutional investors are scouting markets throughout Florida for properties that can deliver high rates and occupancies.
In Sarasota, for example, Coffee Talk reported earlier in May that the Ritz-Carlton, Sarasota is up for sale. The owners, managers and potential brokers on a deal declined to comment, but the possible sale, which would likely be more than $100 million, was buzz-worthy news around town.
“There's tremendous capital out there, and markets throughout the country are setting records in regards to room rates, occupancy and property profits,” New York-based LW Hospitality Advisors President and CEO Daniel Lesser told Coffee Talk. “And, at the same time, new supply — especially in the luxury category — has been muted, and we're in a low-interest rate environment, so there are a lot of positive factors.”