An EB-5 developer in Miami plans to break ground on a $24 million Miami airport hotel this fall, marking the first of three hospitality properties in the works for Riviera Point Development Group in the Southeastern United States.
Rivera Point will launch RED, Radisson’s millennial-focused brand, at the site at 3450 Northwest 25th Street. Twenty-three investors, a majority from Venezuela, Colombia, Argentina and Ecuador, will provide $11.5 million in financing for the 155-room hotel, CEO Rodrigo Azpúrua told The Real Deal.
Funding via EB-5 is desirable because interest rates are often lower than traditional financing. In this case, investors earn 3.5 percent on their investments with no share on profits, Azpúrua said.
The popular visa program grants permanent U.S. residency to investors (as well as their immediate family members) who create at least 10 domestic jobs and invest at least $500,000 to $1 million in a U.S. business venture. In South Florida, EB-5 investors have targeted restaurants and projects like SkyRise Miami and the Hotel Astor redevelopment.
Riviera Point paid close to $3 million for the roughly 1-acre plot in November, records show. Modis Architects, including principal Ivo Fernandez, is designing the six-story hotel, which Carlson Rezidor Hotel Group will manage when it opens in 2018.
RED targets the millennial traveler, Azpúrua said, and marks the first millennial-oriented brand near the airport. The brand emphasizes art, food and technology. “Innovation and marketing are the two keys of success for any brand,” Azpúrua told TRD.
It will feature an open lobby with restaurants, bars and meeting spaces; a pool and fitness center; and multipurpose event studios, according to a press release. Room rates will in the $125 range.
All-in-all, Riviera Point aims to build or acquire 1,500 hotel rooms in the next five years in Florida and the rest of the Southeast. That’s a change for the developer, which has worked on EB-5 funded office condos in Doral and Miramar in the past, so far totaling more than $45 million of investment in South Florida. More than 160 green cards have been issued as a result, according to the release.
Azpúrua said the high demand and operational ease of limited service hotels makes them attractive investments.
Earlier this month, the company bought a Comfort Inn in Myrtle Beach, South Carolina for $2.7 million with plans to rebrand. And back in Florida, Riviera Point is set to close on a Daytona Beach hotel it will convert into two smaller limited service properties.