FORT LAUDERDALE, FL –The yacht capital of the world is chartering more than tourists to its shores. Investors have taken an interest in Fort Lauderdale’s hotel market. While the Miami hotel market has experienced record-breaking transaction volumes annually since the downturn, there are very few acquisition opportunities and many investors are likely to employ hold strategies to maximize asset value. Now, Fort Lauderdale is hitting a peak in investor interest with projections of more than $450 million in hotel transactions expected to close in the next 12 months.
“Fort Lauderdale is becoming a premier location for leisure travelers and investors alike. The market, once positioned to capture Miami’s infinite tourism overflow due to its location just 30 minutes north, has become a key destination itself. Thirteen-million tourists are expected to visit this year,” said Gregory Rumpel, Managing Director of Jones Lang LaSalle’s Hotels & Hospitality Group.“Increased visitor demand coupled with upscale hotel product is attracting investors who are looking to deploy capital into the South Florida hotel market. Available product in Miami is rising in price these days, so Fort Lauderdale becomes the natural choice for investment.” In the last 24 months, Rumple and his Miami team have closed approximately $900 million in acquisition and finance transactions, $722 million of which have been in Florida.
Opportunity in Fort Lauderdale’s Market
“During the 2007 ‘peak’, Fort Lauderdale’s market had very little upper-upscale, luxury product. The current supply, which was either under construction, ramping up or under renovation, was impacted by the economic crisis and prevented from experiencing its full potential,” said Rumpel. “With new luxury hotel product now in the market, and a constrained supply pipeline, the Fort Lauderdale lodging market is expected to see higher investment levels than ever before.”
As of August 2013, occupancy in Fort Lauderdale has increased 47 consecutive months and revenue per available room (RevPAR) and average daily rates (ADR) are on the upswing. These key lodging fundamentals are being driving by strong city-wide marketing initiatives and leisure demand.
Fort Lauderdale witnessed a 21 percent increase in RevPAR from 2010 to 2012, and is up eight percent through year-to-date August 2013. The market remains robust and its strengthening performance is attracting private equity and REIT players seeking to capture market share as opportunities become available in Fort Lauderdale.
Investment opportunities currently being marketed by Jones Lang LaSalle in the area include the B Ocean Fort Lauderdale, which received a multi-million dollar renovation in 2010, and Bahia Mar, a 39-acre ocean front complex featuring one of the country’s biggest marinas and the 296-key Doubletree by Hilton.
“Fort Lauderdale is experiencing a significant amount of momentum,” added Andrew Dickey, Vice President of Jones Lang LaSalle’s Hotels & Hospitality Group in Miami. “Business and leisure travelers are discovering all Fort Lauderdale has to offer, and hotel owners, operators and developers are responding to strong market performance by constructing or renovating high-quality properties.”
Continued signs of prosperity
International tourism into Fort Lauderdale has tripled in the past three years, creating no shortage of demand for lodging. The city is easily accessible due to its proximity to three international airports and two of the busiest cruise ship ports in the world. To accommodate this increased demand, the city of Fort Lauderdale has outlined an extensive expansion plan with nearly $6.5 billion allocated toward the development of infrastructure projects, including $1.2 billion apportioned to the Fort Lauderdale International Airport and $2 billion for Port Everglades.
“Infrastructure improvement and new development are powering forward, and the momentum is attracting investment to the city ensuring positive growth and change,” said Nicki Grossman, President and CEO, Fort Lauderdale Visitors and Convention Bureau. “For example, the city is currently seeking development of a hotel convention center to cater to the needs of larger groups. The demand is there and this project would build an even more robust market.”
Dubbed the “Internet Coast,” and home to more than 6,000 high technology firms, in 2012, CNNMoneynamed Fort Lauderdale one of the best places to live and launch a business. The market is emerging as a global trade arena, with more than 40 percent of businesses in the area engaged in, or supporting, international commerce. Beyond its rapidly growing business environment, Fort Lauderdale offers countless high quality dining options, entertainment venues, shopping locations, museums and art galleries to its visitors.
Jones Lang LaSalle’s Hotels & Hospitality Group serves as the hospitality industry’s global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firm’s more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling nearly US$25 billion, while also completing approximately 4,000 advisory, valuation and asset management assignments. The group’s hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.
For more news, videos and research from Jones Lang LaSalle’s Hotels & Hospitality Group, please visit: http://www.jll.com/hospitalityor download the Hotels & Hospitality Group’s app from the App Store.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.
Contact: Katie Sershon
Phone: 312 228 3127
Email: [email protected]