Ritz-Carlton Fort Lauderdale Trades

MIAMI—The Ritz-Carlton Fort Lauderdale, a 166-room luxury beachfront hotel in Fort Lauderdale, has traded hands. An affiliate of Miami-based Gencom and RCFL Investor LLC purchased the property acquired the hotel from Castillo Grand, the original developer, for about $66 million, according to Broward County records.

HFF senior managing director Daniel C. Peek, executive managing director Manny de Zárraga, directors Max Comess and Paul Hsu, and analyst Chris Lingerfelt, represented the seller. Ritz-Carlton will continue to manage the hotel.

“The trade of the Ritz-Carlton Fort Lauderdale provides further evidence of the recovery of the luxury lodging segment and increased investor appetite for high-quality oceanfront resorts,” says Peek, head of the hospitality practice at HFF. “This was an extremely complicated transaction and we congratulate all of the many stakeholders involved.”

Castillo Grand originally operated the hotel as a St. Regis, a Starwood brand. But the deal between the companies soured before the hotel's grand opening and years of litigation followed. According to the Daily Business Review, disputes over design and construction plans and personnel changes within the St. Regis team overseeing the project resulted in substantial completion delays and cost overruns. After accusations that Castillo breached its contract, the developer wound up winning a $44 million judgment against Sheraton, another Starwood affiliate.

Completed in 2007 as a St. Regis-branded property, the hotel was converted in 2008 to the Ritz-Carlton. The hotel features 166 rooms and suites plus 28 third-party owned condo-hotel units that participate in the resort's rental program. The hotel located on the beachfront at 1 North Fort Lauderdale Beach Boulevard proximate to Las Olas Boulevard and close to Fort Lauderdale-Hollywood International Airport and Port Everglades. The property is the only AAA Five Diamond-rated hotel in Broward County.

According to Smith Travel Research data, the luxury lodging segment led the hospitality industry in the second quarter with 4.6% growth in average daily rates. The firm also reports a 6% growth in revenue per occupied room compared to the same period in 2012.

“As unquestionably the top luxury property in Broward County, the Ritz-Carlton benefits from Fort Lauderdale's strong visitation due to expansions at Fort Lauderdale International Airport and Port Everglades, as well as tourism initiatives sponsored by the Greater Fort Lauderdale Convention and Visitors Bureau,” says Comess, a director in HFF's Miami office. “In particular, we were impressed with the strong turnout of international investors who would consider a major acquisition in Fort Lauderdale, rather than their traditional focus on Miami exclusively.”