Sunstone Hotel Investors acquired the Confident Miami Beach of a subsidiary of Hyatt Hotels Corp. for a total of $232 million, the buyer said.
The real estate investment trust will pay around $684,000 per key for the 339-room Art Deco tower property in 4041 Collins Avenue. The company plans to launch a $60 million repositioning and rebrand the 17-story hotel to Andaz Miami Beachhoping to see an 8-9% net operating return on the total investment.
Sunstone plans to have an ongoing relationship with Hyatt as the Andaz brand will be licensed to them.
The move marks Sunstone’s move to the South Florida market and away from Chicago, where the REIT has sold three hotels year-to-date for a total of just under $200 million. In February, Sunstone sold its leasehold interest in a 419-room Hyatt hotel for $67.5 million, according to S&P Global, and in March it sold two Hilton-operated River North hotels for $130 million, according to Crain’s.
“The acquisition of The Confidante Miami Beach allows us to recycle capital from our recent sales of three Chicago hotels into this higher growth and better [net asset value]strengthen investments,” said Bryan Giglia, CEO of Sunstone, in a statement.
Once the repositioning is complete, the company expects to earn up to $900,000 per room on an annual basis, as similar assets in Miami Beach are known to generate around $1 million per room, according to Sunstone.
This won’t be the first time the 1940s Art Deco hotel has changed hands and been renamed.
Formerly known as the Thompson Miami Beach, the hotel was purchased by Hyatt in 2016. Originally it was the Lord Tarleton Hotel on Collins Avenue and reopened as the Crown Hotel in 1955 before being converted into apartments, according to Hyatt. In 2012, Geolo Capital bought the building for $85 million and converted it back to Thompson Miami Beach in 2014, according to the South Florida Business Journal.
Hyatt did not immediately respond to a request for comment.
Marc Hallum can be contacted at [email protected].