Dive Brief:

• SLS Brickell, a 124-room luxury and lifestyle hotel located in Miami’s Brickell district, sold for $53.5 million, JLL’s Hotels & Hospitality group announced last week. 
• Albanian conglomerate The Kastrati Group acquired the hotel from Constellation Hotels Holdings. The property opened in 2016 within the mixed-use SLS Tower and features nearly 58,000 square feet of indoor and outdoor event space, multiple dining concepts and a rooftop pool and spa.  
• The hotel garnered significant interest from investors, JLL said, exemplifying an outlook for positive long-term growth for the Miami market. However, the market is projected to see declined hotel performance for the remainder of the year as local inflation rises and leisure travelers choose other, less expensive vacation destinations. 

Dive Insight:

The SLS Brickell hotel was highly sought after by investors and garnered several bids, Andrew Dickey, managing director at JLL, said in a statement. The strong interest reflects the “quality of the asset and its improving location within Brickell,” he said, adding it also points to investors’ belief in Miami’s positive growth fundamentals. 

At the beginning of the year, Melvin Chu, executive vice president for JLL’s Hotels & Hospitality Group, called Miami a top-25 performance growth market, noting that the city’s RevPAR exceeded 2019 performance by 24% at year-end 2022. 

But by mid-year 2023, ADR and RevPAR had declined 4.3% and 2.3%, respectively, year over year, according to research from real estate services firm Marcus & Millichap. And the firm predicted declining growth would continue through the remainder of 2023, decreasing 6.8% year over year. 

Marcus & Millichap based its forecast on an anticipated decline in tourism to Miami, exacerbated by rising local inflation. 

Travelers, though, have expressed a willingness to splurge on travel this year despite the uncertain economic climate. And hotel supply is being added in Miami to cater to leisure traveler demand. 

Hotel projects underway include a luxury property on Brickell Key to be managed by Mandarin Oriental Hotel Group, a wellness-focused IHG hotel and the planned Hyatt Regency Miami.