PHILADELPHIA—Hersha Hospitality Trust, owner of upscale hotels in urban gateway markets, announced the company has entered into a definitive agreement to purchase two Autograph Collection hotels in Miami’s South Beach. The purchase price for the South Beach Autograph Portfolio, which totals 145 rooms, is $50.95 million.
“The South Beach Autograph Portfolio represents a unique opportunity to acquire two fully-renovated properties in the highly desirable South Beach Market, and solidifies Hersha’s presence in Miami. Combined with the new tower opening at the Cadillac Courtyard Oceanfront, Hersha will control a significant portion of Marriott-branded assets on Miami Beach,” stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer.
The South Beach Autograph Portfolio includes the 75-room Blue Moon Hotel and the 70-room Winter Haven Hotel. The hotels underwent a comprehensive $9 million renovation, completed in mid-2013, and are located in the heart of the Art Deco District. The geographic proximity of the two hotels will facilitate efficient management of the two properties, benefitting from revenue management, accounting, IT, and sales synergies. Furthermore, as part of Marriott’s Autograph Collection, the hotels are expected to retain their unique independent desirability, while leveraging Marriott’s distribution capabilities. Upon closing of the transaction, the hotels will be managed by HHM.
According to Smith Travel and Research, RevPAR in the Miami Beach submarket increased 11.9 percent to $185.43 year-to-date 2013 through the end of October compared to 2012, while the overall Miami-Hialeah market reported a 9.7 percent RevPAR increase to $135.39.
The acquisition of the South Beach Autograph Portfolio will be funded with cash on hand, and with a portion of the $138 million in net proceeds generated from the non-core portfolio sale. The transaction is expected to close by the end of fourth quarter 2013, and is subject to a variety of closing conditions.