RLJ Lodging Trust, Bethesda, Maryland, has entered into a purchase and sale agreement to acquire upon completion the 231-room Hilton Cabana Miami Beach for a fixed purchase price of US$71.6 million, or approximately US$310,000 per key.
The property opened as a hotel in the early 1950s and was closed and gutted in 2007 in anticipation of a condominium conversion. The conversion did not materialize, and the property went into foreclosure. In 2011, the current owners purchased the property to develop a new hotel, which they expect to complete and open in the fourth quarter of 2013 as a Hilton.
“We are thrilled to be entering the Miami Beach market,” said Thomas Baltimore Jr., RLJ president and chief executive officer. “We see this acquisition as an excellent opportunity to enter a gateway market with multiple demand generators. Furthermore, the Hilton brand is underrepresented in this market, which should provide for outsized performance from this hotel.”
Upon entering the agreement, RLJ committed to a US$7.2 million deposit that will be refunded if the hotel is not completed. The company is not assuming any construction risk, including the risk of construction overruns.