Margaritaville Resort Sells in Largest Hotel Deal in South Florida This Year
By Julia Echikson September 27, 2021 3:34 pmreprints
Pebblebrook Hotel Trust said it purchased the Margaritaville Hollywood Beach Resort for $270 million, making it South Florida’s most expensive hotel acquisition of the year so far.
The oceanfront hotel, located at 1111 N Ocean Drive in Hollywood, Fla., holds 369 rooms as well as a 11,000-square-foot spa, kids club and fitness center. A stay at the 6.2-acre establishment ranges between $450 and $810 a night.
Pebblebrook paid $108.5 million in cash and assumed the $161.5 million existing debt with a floating interest rate that currently stands at 2.5%. The sale equates to $731,710 per room. The seller — Denver-based private equity firm KSL Capital Partners — bought the property for $190 million in 2018, The Real Deal reported.
The 18-story resort is forecasted to generate between $475 and $480 of total revenue per room in 2021, according to Pebblebrook. As a whole, it’s expected to produce between $16.8 and $17.2 million in earnings before interest, taxes, depreciation and amortization also in 2021.
Headquartered in Bethesda, Md., Pebblebrook owns 52 hotels, totaling 13,000 guest rooms across 15 markets, according to the company.
The sale comes after a slew of other Florida, Margaritaville properties secured financing this year. Starwood Property Trust lent $98.39 million for an outpost in Orlando, while Peachtree Hotel Group provided $104 million to complete the construction of a long-planned resort in Fort Myers Beach.
Since the pandemic knocked Florida’s hospitality industry, South Florida’s distressed hotels have become popular assets among investors. Earlier this year, New Jersey-based Victory Investments Group bought Miami Beach’s iconic Hotel Astor for $12.75 million. CGI Merchant Group purchased another shuttered hotel: the nearby Celino South Beach hotel.
But Pebblebrook’s sizable acquisition hints at a hospitality industry that’s in recovery, thanks to the vaccine rollout and the easing of restrictions this summer. At Pebblebrook’s hotels, occupancy has doubled to 41 percent between the first and second quarters of 2021, according to regulatory filings.
Julia Echikson can be reached at email@example.com.