The Miami hotel market continues to be one of the most active hotel markets in the country. The impact from tourism and Miami’s location as a gateway city continue to attract real estate investors and the activity is expected to increase throughout 2013. As noted in recent articles in Law 360 and the South Florida Business Journal, Jones Lang LaSalle stated that the South Florida market already saw $200 million of hotel trades in the first three months of the year and predicts $750 million in investment activity over the year which is a 12% increase from 2012.
Miami Beach Historic District A Hot Commodity
The majority of activity is concentrated on Miami Beach with many of the acquisitions occurring further north on Collins Avenue. Investors continue to look for hotel opportunities in mid-beach and along the Collins Waterfront Historic District such as the Miami Beach Resort which recently sold for $117 million. The expectation is that REITs, private equity funds and institutional investors will continue to be the major players in acquiring hotels in the coming year. However, supply is limited so larger trades such as the Miami Beach Resort are going to be few and far between. Still, the increase in institutional lending and the return of CMBS financing should aid the hotel transaction activity.
Continued Growth Expected for Hotel Industry
With the Miami Beach Convention Center redevelopment project and the recently announced plans to build a new convention center in downtown Miami on the former site of the Miami Arena, and new rail service from Miami International Airport into downtown, investment into South Florida’s infrastructure should continue to draw tourists which in turn will continue to spur the Miami hotel industry. If the predictions prove to be true, it will show that the Miami hotel market has bounced back swiftly from the recent downturn.