|By Hannah Sampson, The Miami
HeraldMcClatchy-Tribune Regional News
Feb. 25, 2011--Miami is poised to become a hot spot for hotel investors this year, according to a new report.
Hotel investment services firm Jones Lang LaSalle Hotels says deal volume in the area could reach $750 million, which would be a 250 percent increase over 2010.
The firm expects sales of several large upscale properties in Miami Beach and the downtown Miami/Brickell area to go through in 2011, with plenty of involvement from real estate investment trusts (REITs) and foreign investors.
That projection is based on the number of distressed properties that are controlled by lenders -- and ripe for investment -- as well as a lack of new supply coming into the market following the economic downturn.
"We feel there's a lot of money out there that's chasing hotel deals, but they've got to be good markets," said Fernando Garcia-Chacon, executive vice president for Jones Lang LaSalle Hotels in Miami. "And Miami's got to be one of them."
Brands are also expected to take advantage of some deals with their own capital, as Marriott did in July when it bought the former Seville Beach Hotel on Miami Beach in a $57.5 million short sale. The property is slated to join Marriott's hip new Edition brand after extensive renovations.
"I think that shows you these hotel experts do have a lot of confidence in South Beach," Garcia-Chacon said.
Another important marker: The August purchase of the Royal Palm Resort Hotel on South Beach for $126 million by real estate investment trust Sunstone, which bought the hotel at a foreclosure auction. Jones Lang LaSalle Hotels marketed the property for the bank.
Transaction volume in Miami was more than $210 million last year, the firm said, which was a 40 percent increase from 2009.
Garcia-Chacon said he anticipates mostly renovation and repositioning this year as investors grow more confident in Miami's economic recovery and strength as a destination.
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Copyright (c) 2011, The Miami Herald
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