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CRE Companies Put Old Hotels To New Uses

If you find yourself with a batch of lemons, the wise move is to make lemonade.

What if you’ve got hotel properties in a down hospitality market? Luckily, you’ve got some choices.

For example, California-based Vivo Living, which turns hotels into multifamily properties, announced at the beginning of September that it opened its tenth “boutique efficiency apartment” complex. They come both furnished and non-furnished. Such hotel standards as free Wi-Fi, lounge areas, pools, and gyms become amenities. The company claims more than 1 million square feet of properties with more than 10,000 apartment units.

”Vivo aims to reduce traffic, waste and sprawl by carefully selecting each location to be in physical proximity to shopping, markets, entertainment and other necessities,” a company press release quoted CEO Dan Norville. “We are reusing buildings versus building ground-up.”

Vivo is hardly the only company turning underused hotels into other opportunities for profit. Private equity investment firm Pebb Capital partnered with Maxwelle Real Estate Group recently to announce the acquisition of the historic Bancroft Hotel and adjacent Ocean Steps commercial building in Miami Beach. About half of the 100,000 square feet of indoor and outdoor space will become a “super Class A” office offering fitness/wellness and food and beverage for a commercial use high-end concept property.

“With the current market, many real estate owners are finding that speed to market is essential today,” John Cerra, founding principal of CetraRuddy Architecture, which has done more than 40 conversions of offices, hotels, industrial lofts, and more, tells “Turnaround time is now a key factor, and many developers are looking for strategies to create successful conversions through minimal interventions.”

“The key evaluative criteria for these projects are floor layout and egress, existing plumbing, number and locations of elevators, and availability of vertical riser ducts, pipes or conduits,” Cetra says. 

“In real time, businesses are occupying multi floors within hotels as work/ stay arrangements,” Michael Silver, chairman of Vestian, says. “Citadel recently took over a hotel in Florida which they converted into a trading floor. The trend towards converted use of hotels will continue to accommodate employees working remotely. No longer as a hotel arrangement but as an apartment arrangement or a work use arrangement.”

But it takes work. Cetra notes that zoning and building codes can be hurdles and ensuring potential profit is key. “The project has to pencil out,” he says.


Source:  GlobeSt.


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South Florida Commercial Real Estate is ‘Off the Charts’

All eyes are on the South Florida’s real estate market as companies large and small from across the country relocate or expand to enjoy its sunny climes and tax benefits, accelerated by the pandemic.

Big businesses are breathing life into South Florida’s office market, with major companies creating a ripple effect and influencing others to come to the capital of capital. Despite the rise in the Delta and Mu variant cases, top-dollar deals aren’t diminishing and the retail and hospitality sectors are booming.

“Occupancy was off the charts. Average daily rates were off the charts. Some of my hotel owners who had gone from crazy numbers like 9% occupancy were now full and at rate said they had never been able to charge before,” said Suzanne Amaducci-Adams, partner and head of real estate at Bilzin Sumberg in Miami.

“It remains to be the most dominant sector that continues in the new-to-market sphere. I think the openness of business and business climate in South Florida has seemingly drawn in the past year, additionally our tax climate as a state, plus being a good-sized metropolis with much to offer,” said JLL’s Jeff Gordon.

“The venture capital firms are flooding this market. The hedge funds and private equity firms are flooding this market, and they’re clustering near our building at 830 Brickell, and in Coconut Grove and Wynwood and the Design District. I think we’re going to see more of these big names,” said Ryan Holtzman of Cushman & Wakefield.


Source:  GlobeSt.

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Investors Searching For Hotels In Distress

South Miami-based multifamily developer The Estate Companies has purchased the Ramada Hotel in Hialeah for $15.25 million.

“The distressed hotel sector has created investment opportunities that firms like ours are ready and able to capitalize on,” said Jeffrey Ardizon, a principal of The Estate Companies, in a statement.

The purchase of the five-acre site, at 1950 W. 49th St., closed Friday, according to the release. The Downtown Miami-based LV Lending provided $11.5 million in financing.

The Estate Companies does not have any plans finalized for the site, according to its spokesperson.

Other multifamily developers are expected to buy South Florida hotels, said J.C. de Ona, southeast Florida division president of Centennial Bank, to convert the buildings to apartments or redevelop the land.

“The pandemic has spurred distress with the hotels. Even if an owner is able to carry it, the owner may have to make the decision whether they are going to carry the hotel long term. The longer the pandemic goes the more distress you’re going to see.”

Hotels, especially older ones, that catered primarily to the airports or ports are more likely be bought for redevelopment, de Ona said. Those in areas with a growing renters population, including Hialeah, may have particular appeal.

The developer acquired the 258-key hotel, which opened in 1970, because of its location.

“The site is situated on arguably the City of Hialeah’s busiest corridor and main artery. The City of Hialeah is a market with very high barriers to entry, strong demographic support and close in proximity to some of the largest employment hubs in South Florida,” Ardizon said in a statement.

Homeowners in the area saw values rise in 2020. Hialeah experienced one of the biggest gains on its existing property values from 2018. Values increased by 6.7 percent. Rental rates are among the least affordable in the country, according to a 2020 report by WalletHub.

The Estate Companies opened in 2012 and has built a handful of apartment buildings across Miami-Dade and Broward. Five projects in the works including locations in Downtown Miami, the Health District and Dania Beach.


Source:  Miami Herald

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