Ritz-Carlton Sale Says This About the Market

MIAMI—Carey Watermark Investors just bought majority interest in The Ritz-Carlton, Fort Lauderdale, FL. Carey acquired the hotel in a joint venture with RCFL Holdco, an affiliate of Gencom.

The Ritz-Carlton hotel buy marks Carey's third JV purchase with Gencom entities. The companies also snapped up The Ritz-Carlton, Philadelphia and The Ritz-Carlton, Key Biscayne, Miami. All told, the trio of transactions represent a total over $500 million.

“The joint venture investment in The Ritz-Carlton, Fort Lauderdale represented the opportunity to acquire the only AAA Five Diamond hotel in Fort Lauderdale—a strong-growth market that benefits from solid fundamentals and a strategic location with respect to air transportation and leisure demand generators,” says Michael Medzigian, CEO of CWI 1. “Our acquisition of this uniquely positioned, soon-to-be-renovated, luxury hotel in the established Fort Lauderdale resort market continues to enhance the overall quality of our portfolio.”

Located on Fort Lauderdale Beach next to some of the area's most exclusive, high-end residential real estate, the hotel is near leisure demand generators, including golf courses, shopping malls, museums, nightclubs, and marinas. The Ritz-Carlton, Fort Lauderdale is also minutes away from Fort Lauderdale-Hollywood International Airport and Port Everglades, and within a 30-minute drive to Miami International Airport.

"There is no doubt that hotels are still hot right now,” Karyl Argamasilla, Of Counsel Attorney in Bilzin Sumberg's Real Estate Group, tells GlobeSt.com. “There is an incredible demand for these assets and investors are willing to pay top dollar to acquire them, especially trophy properties. We have seen a flurry of deals with record-breaking price tags, including the recent sale of the SLS Hotel South Beach, which sold for $125 Million—$892,857 per room—and the Royal Palm Hotel, which investors acquired for more than $700,000 per room." (If you want more hotel market insights from Argamasilla, read my exclusive interview: What Makes Miami's Market Sizzle.)

From 2009 to 2014, the Fort Lauderdale lodging market RevPAR posted a compound annual growth rate of 7.6% and is projected to increase over the next two years, according to PKF Hospitality Research. New ownership is planning an extensive renovation this year, including re-conceptualization of the three-meal restaurant, renovation and expansion of the spa, adding an indoor/outdoor bar, updates to the main lobby and other public spaces, and a new 3,700-square-foot retail store. Ritz-Carlton Company, an affiliate of Marriott International, will continue managing the hotel.