California-based Sunstone Hotel Investors put The Confidante Miami Beach under contract for $232 million, marking the real estate investment trust’s debut in South Florida.
Sunstone agreed to buy the 339-key oceanfront hotel at 4041 Collins Avenue from an affiliate of Hyatt Hotels Corporation, according to the buyer’s news release. The deal is expected to close by the end of the second quarter.
The price equates to $684,000 per room.
Sunstone plans a $60 million renovation, and will rebrand the property from its current Unbound Collection flag by Hyatt to Andaz, also by Hyatt, the release states.
The price would be the highest so far this year for a South Florida hotel, but is still below last year’s top deal, Pebblebrook Hotel Trust’s $270 million purchase of the 369-key Jimmy Buffett-inspired Margaritaville Hollywood Beach Resort in Hollywood.
The latest Confidante price is slightly above the $229.4 million Hyatt paid in 2016 for the hotel, which at the time was called Thompson Miami Beach. That trade included a mixed-use garage across the street.
The Confidante was originally built in the 1940s with one tower that then was Miami Beach’s first modern skyscraper, according to media reports. Two towers were added over the years, with the hotel temporarily converted into apartments. The property spans 1.5 oceanfront acres.
Amenities include three restaurants, a rooftop spa, two heated pools, and a 30,000-square-foot indoor and outdoor meeting and event space, according to Hyatt’s website.
Sunstone, based in Irvine, California, plans to revamp the pool and backyard, food and beverage offerings, rooms, and meeting and event space, and it also would relocate the lobby to an area that would allow expansive oceanfront views to guests checking in, according to the release. The renovations are expected to begin in the fourth quarter and should be completed in the first half of 2024, along with the rebranding.
The Confidante will stay open while work is ongoing, the release states. Hyatt will stay as the hotel manager.
Sunstone plans to finance its purchase with cash and by drawing on its revolving credit facility. It also will “recycle capital” from its recent sale of three hotels in Chicago, the company’s CEO Bryan Giglia said in the release.
In March, Sunstone sold the 368-key Embassy Suites Chicago at 600 North State Street and the 361-key Hilton Garden Inn at 10 East Grand Avenue in Chicago for a combined $129.5 million.
Sunstone, headed by Executive Chairman Douglas Pasquale, is publicly traded on the New York Stock Exchange. Its other Florida properties are the 781-key Renaissance Orlando at SeaWorld at 6677 Sea Harbor Drive in Orlando, and the 175-key Oceans Edge Resort & Marina at 5950 Peninsular Avenue in Key West, according to Sunstone’s website.
Other South Florida top hotel sales this year include Utah-based Dynamic City Capital’s $74.3 million purchase in February of the 171-unit AC Hotel by Marriott at 3029 Alhambra Street near the beach in Fort Lauderdale.
In another AC Hotel trade, Peachtree scooped up the 233-key property at 20805 Biscayne Boulevard next to Aventura ParkSquare in January for $49.5 million.