A joint venture of Deutsche Finance America, Bilgili Holding and SHVO has acquired the historic Raleigh Hotel in Miami for $103 million in an all-cash transaction.
A partnership between Tommy Hilfiger and Dogus Group, a Turkish conglomerate, sold the 83-room asset.
The hotel is an icon of South Beach art deco, known especially for its ornate beachside swimming pool, which LIFE Magazine called "the most beautiful pool in America" in 1947.
The acquisition of the Raleigh Hotel marks the second joint investment for the new owners.
Global hotel investment volume is expected to remain stable in 2019, reaching $67.2 billion, according to JLL's 2019 Hotel Investment Outlook.
And the Miami hotel market showed modest RevPAR growth from 2013 to 2015, reported CBRE. However, supply growth of 4.3 percent and weak demand from Latin America in 2016 caused a dramatic drop in RevPAR growth. Fortunately, thanks to the nation’s top average daily rate growth rate of 6.5 percent, Miami is expected to be a top five market in terms of RevPAR growth in 2018, at 7.3 percent.
Miami has 51 properties either in the final planning stage or under construction. These properties represent 7,919 rooms, or approximately 14 percent of the current hotel stock. Some 28 of the properties are in the upper-midscale or upscale class, and there are nine upper-upscale properties scheduled to open by 2021.
Miami is a top five U.S. hotel market with occupancy forecasted to remain above 77 percent. CBRE predicts the market demand will keep pace with the average annual growth in supply of 3.3 percent during the period 2019 to 2022. The possibility of a U.S. recession in 2019 is a risk to the national hotel market, and Miami could be affected should that scenario materializes. The healthy supply and demand dynamics, however, should keep the market on an upward trajectory in the medium term.
