MIAMI—Carey Watermark Investors just snapped up the Ritz-Carlton Key Biscayne in Miami in a joint venture with an affiliate of GB Key Biscayne Holdings. Financial terms of the deal were not disclosed.

GB is the original developer of the hotel asset, which includes 302 resort guestrooms and 188 condo-hotel units. One hundred seventy four of the condo-hotel units participate in the resort rental program.

Michael Medzigian, CEO of the CWI investment programs, said the joint venture allowed the company to add a AAA Four Diamond destination resort in a location with high barriers to entry to its portfolios. Indeed, with such a  limited area and development limitations on the island, it would be nearly impossible at this point to develop a similar property on Key Biscayne.

“Working with GB Key Biscayne Holdings, we were able to recapitalize the asset to allow for ongoing renovations and secure attractive current risk adjusted returns with the potential for longer term incremental value,” says Medzigian. “The combination of a high quality asset in an unmatched location with the strength of The Ritz-Carlton brand represented a unique and attractive investment opportunity."

Developed in 2001, the resort recently completed a full renovation of the lobby, two food and beverage outlets and spa. CWI plans to renovate the guest rooms in 2016. Guestroom renovations are planned for 2016, along with bathroom upgrades, and a repositioning of its signature restaurant, Cioppino.

CWI has plenty of good reasons to bet on this asset. Beyond the high barrier to entry, Key Biscayne is firmly established as a world-class resort community that offers nature preserves, shopping villages, beaches, and some of the most exclusive and expensive residential homes in South Florida.

Key Biscayne is also home to an international tennis center and Miami Open tennis tournament, as well as a championship golf course, and provides an attractive location for water sports and fishing. The neighboring Virginia Key is home to the Miami Seaquarium.

CWI also points to Miami's white hot hotel market as a driving force behind its decision to invest in the Ritz-Carlton. In 2014, Miami was the fourth highest US market in terms of overall RevPAR, after New York, Oahu, and San Francisco. According to PKF, the Miami lodging market continues to show strength with projected annual RevPAR growth in the 5% range over the next several years.

The Ritz-Carlton Hotel Company, an affiliate of Marriott International, will continue to manage the hotel, which includes 20,000 square feet of interior meeting and banquet space. The resort also offers 30,000 square feet of exterior function space, including two pool deck, a full-service fitness center, a tennis center with 10 clay courts and one hard court, two pools, and five primary food and beverage outlets.