Espirito Developer Sells Conrad Hotel
By Marilyn Bowden
The 203-room Conrad Miami in Espirito Santo Plaza has been sold for about $65 million.
Bill Ross, president of Estoril Inc., which developed the mixed-use building at 1395 Brickell Ave. for Lisbon-based Espirito Santo Bank, said the buyers, E.I. American Real Estate Corp., are investors from Europe.
"We’re doing what we said we would do years ago," he said. "There was not much point in selling the hotel before it opened. We are mainly a European corporation, after all, and this is what we always intended. We got our asking price, and we are very happy with it."
The sale consists of 250,000 square feet, including the rooms and 30,000 square feet of meeting and ballroom space, the 25th-floor sky lobby, restaurants, kitchens, bars, a ground-floor lobby, a recreation center featuring two tennis courts, a rooftop swimming pool and 20,000 square feet of storage space.
The price, about $320,000 a room, is "pretty significant," said Scott W. Brush of Brush & Co., a hospitality-consulting firm. "Considering the number of high-end rooms in the downtown Miami market," he said, "in areas that in the not far distant past had none, that’s certainly not a discounted price."
Three Ritz-Carltons, JW Marriott, Mandarin Oriental, Miami and Four Seasons Hotel preceded Conrad in quick succession in an area that is distinctly commercial rather than resort, Mr. Brush said.
But while in the short term there may be an oversupply of luxury rooms, he said, in the long term they will all be absorbed.
"Hotel money has to be patient money," Mr. Brush said. "Miami is a world capital with a significant amount of international business. If Free Trade of the Americas does locate here, that will make it a big deal all in itself. But it will happen in time, anyway.
"As long as the buyer intends to stay awhile, the price will be justified."
For Conrad Miami, the deal amounts to a change in landlords, said Dieter Huckestein, president of hotel operations for Hilton Hotels Corp.
"A new owner certainly buys the hotel with the premise that it is a luxury hotel," he said, "and in order to make it financially viable, it will be maintained as such."
Mr. Ross said the deal included a long-term management contract with Conrad Hilton.
Since Conrad Miami opened three weeks ago, Mr. Huckestein said, business has been brisk.
"We sold out the first weekend," he said, "and have been running at pretty good occupancy ever since."
He said a lot of interest comes from business travelers, including a high percentage who have stayed at other Hilton hotels in the area.
The 36-story, 1.2 million-square-foot Espirito Santo Plaza, designed by the New York office of Kohn Pederson Fox, was completed a few months ago. There are no plans, Mr. Ross said, to sell the 260,000-square-foot office portion of the building, which is about 80% leased.