Carey Watermark Investors Buys The Ritz-Carlton, Fort Lauderdale in JV
Carey Watermark Investors Inc. (CWI 1), a publicly registered non-traded real estate investment trust sponsored by W.P. Carey (NYSE: WPC), has acquired a majority interest in The Ritz-Carlton, Fort Lauderdale property in a joint venture with RCFL Holdco LLC, an affiliate of Gencom. Gencom is one of North America’s leading hospitality and luxury hospitality-related residential real estate investment and development firms.
This deal marks Carey Watermark Investors’ third joint venture purchase with the Gencom family of companies, following The Ritz-Carlton, Philadelphia (CWI 1) and The Ritz-Carlton, Key Biscayne, Miami, (CWI 1 and CWI 2) acquisitions. The three transactions represent a total investment of more than $500 million.
Michael Medzigian, CEO of CWI 1 says that “The joint venture investment in The Ritz-Carlton, Fort Lauderdale represented the opportunity to acquire the only AAA Five Diamond hotel in Fort Lauderdale—a strong-growth market that benefits from solid fundamentals and a strategic location with respect to air transportation and leisure demand generators.”
Additionally, he says, “working on our third transaction with Gencom in recent months for both CWI 1 and CWI 2, we were able to recapitalize the asset to fund an extensive renovation. Our acquisition of this uniquely positioned, soon-to-be-renovated, luxury hotel in the established Fort Lauderdale resort market continues to enhance the overall quality of our portfolio. We look forward to executing on additional value-add and cash flow-generating opportunities over the coming months and years.”
Located on Fort Lauderdale Beach, adjacent to some of the area’s most exclusive, high-end residential real estate, the hotel is within proximity to leisure demand generators, including golf courses, shopping malls, museums, nightclubs and marinas. The Ritz-Carlton, Fort Lauderdale is minutes away from Fort Lauderdale-Hollywood International Airport and Port Everglades, and within a 30-minute drive to Miami International Airport.
From 2009 to 2014, according to a prepared statement, the Fort Lauderdale lodging market RevPAR experienced a compound annual growth rate of 7.6 percent and is projected to increase over the next two years, according to PKF Hospitality Research.
An extensive renovation of the hotel is planned for 2015, including a complete renovation and re-conceptualization of the three-meal restaurant, renovation and expansion of the spa to include new sauna and steam areas, the addition of an indoor/outdoor bar, updates to the main lobby and other public spaces, and the creation of a signature 3,700 square-foot retail store.
The hotel will continue to be managed by The Ritz-Carlton Co. LLC, an affiliate of Marriott International.
