Tourism Up, Hotel Investors Flock to Miami Beach
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Real estate investors seem to be flocking to Miami Beach, in hopes of capturing part of the market’s resurgent tourism industry by acquiring, or by expanding their investments in, the limited supply of hotel properties.
Decades of development have built up most of the potential hotel sites in Miami Beach, and virtually all of the beachfront or near-beachfront hotels on the Atlantic Ocean side of Miami Beach fall within one of several historic preservation districts. Those factors make new construction a rarity. Instead, investors seeking a piece of the hospitality pie typically acquire one of the many hotel properties on or near the waterfront and renovate to increase value and command higher room rates.
Buoyed by an economic rebound in tourism after the recession initially drove away some business, competitive bidding has pushed prices for some hotel properties to record highs. Venerable establishments along Miami Beach’s Art Deco district that have undergone makeovers include the Royal Palm and the Ritz Plaza, and a renovation is under way at the former Gansevoort.
