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June 06, 2018  

Fort Lauderdale Sees Rush of Hotel Listings

Three more high-end hotels with a combined value of more than $550 million have hit the block in Fort Lauderdale, portending a banner year for trades in the South Florida city.

Related Cos. has listed the 346-room W Fort Lauderdale with JLL. The luxury property is expected to attract offers in the vicinity of $275 million, or $795,000/room.

Meanwhile, Carlyle Group and InSite Group are shopping a resort two miles south — the 481-room B Ocean, one of the few hotels in the city with direct beach access. It is valued at some $215 million, or $447,000/room. HFF is the broker.

Finally, Noble Investment is marketing the 236-room Renaissance Fort Lauderdale Cruise Port Hotel, worth roughly $72 million, or $305,000/room. HFF also has that listing.

The offerings come on the heels of a high-profile deal that just went under contract, with Brookfield Asset Management of Toronto agreeing to buy the 589-room Hilton Fort Lauderdale Marina Hotel from Blackstone for about $175 million, or nearly $300,000/room. CBRE is brokering that upper-upscale property.

The activity puts Fort Lauderdale — long considered a secondary market in South Florida — on course for one of its busiest years. The peak was set in 2014, when $648 million of large properties traded, more than double the previous high in 2005.

Hotel performance is rising. Revenue per room grew 7.6% in the 12 months ended April 30, according to STR. Occupancy is projected to average 77.4% this year, flat with last year, but average rates are expected to jump $6 to $148/room, lifting per-room revenue $3 to $114.

While Fort Lauderdale is widely known as a popular Spring Break destination for college students, a wave of construction over the last decade has increased the number of luxury and upper-upscale rooms, widening the tourist base and attracting the interest of institutional buyers. The city also draws business from Port Everglades, the third-busiest cruise port in the world, just to the south.

The W Fort Lauderdale, at 401 North Fort Lauderdale Beach Boulevard, is the largest in Florida with that Starwood Hotels & Resorts brand. A $55 million renovation last year updated guestrooms and the 40,000 square feet of meeting space. There is a spa, two infinity pools, high-end restaurants and bars and fitness and recreational facilities. New York-based Related acquired the hotel and 147 adjoining residential condominiums in 2014 for $234 million. The condos, at 3101 North Bayshore Drive, aren’t part of the offering.

Washington-based Carlyle and its partner, local firm InSite, are wrapping up a $40 million renovation of the upper-upscale B Ocean resort, formerly known as the Yankee Clipper, which the duo acquired in 2014 for $100 million, or $208,000/room. The improvements include updates of the rooms, a reconfiguring of common areas, an expansion of the event space to 30,000 sf and a revamp of the restaurants and bars. The hotel is being offered unencumbered by both brand and management contracts, which would give a buyer flexibility to devise a strategy to continue ramping up occupancy and rates. It’s on a 3.2-acre beachfront site at 1149 Seabreeze Boulevard and features a pool, a fitness center and several restaurants and bars.

The Renaissance Hotel, at 1617 SE 17th Street, is in the 17th Street Cruise Port District, which includes the Greater Fort Lauderdale/Broward County Convention Center. The 11-story property underwent room renovations in 2014 and an update to the common areas, 13,000 sf of meeting space and restaurants in 2016. It is being offered unencumbered by a management contract. Atlanta-based Noble bought the upper-upscale property in 2015 for $48.1 million, or $204,000/room, and launched a renovation. Since then, revenue per room has increased some 36%.

The offerings come as sales in South Florida are starting to perk up following a two-year slump. So far this year, nearly $500 million of large hotels have changed hands or gone under contract, putting the market on track to easily surpass last year’s $642 million of activity, according to Real Estate Alert’s Deal Database, which tracks trades of $25 million and up.