The hotel market saw a slight slip this year in some performance benchmarks, but investors collectively paid nearly $2 billion for South Florida properties, surpassing the transactions in all other real estate categories.

The 180% jump from a year before was driven primarily by the trade of two preeminent South Florida resorts, according to JLL data.

The sprawling pink Waldorf Astoria-branded Boca Raton Resort & Club sold for a record $875 million, and the U-shaped oceanfront 1 Hotel South Beach was the second biggest deal of the year trading at $610 million.

Dell Technologies founder and CEO Michael Dell's New York-based MSD Partners LP bought the 1,047-room Boca Raton Resort from the New York-based investment giant Blackstone Group Inc.

The resort opened in 1926 as a much smaller version of what it is today, which expanded to 337 acres. Guests have a choice of luxury boutique Yacht Club Suites, Boca Bungalows, The Cloister and the 27-story tower, all of which face Lake Boca Raton. The boutique Boca Beach Club faces the Atlantic Ocean.

Amenities include two 18-hole golf courses, a spa, seven swimming pools, 30 tennis courts, a 32-slip marina, 13 restaurants and bars, and 200,000 square feet of meeting space.

MSD Partners paid $462 million for the real estate, $285 million for the members-only Premier Club, $23 million for reserves and transaction fees, and other costs. MSD plans $75 million in renovations.

Dell in June scooped up the Boca Raton resort — likely the biggest deal in Palm Beach County history — after a plan to buy 1 Hotel South Beach fell through last year .

Host Hotels & Resorts Inc., based in Bethesda, Maryland, bought the 433-room 1 Hotel South Beach in February from Barry Sternlicht's Starwood Capital Group and family-owned real estate investor LeFrak.

The hotel built in 1969 at Collins Avenue and 23rd Street includes several oceanfront pools, 169 suites and 133,000 square feet of meeting space.

The Boca Raton resort sale breaks down to $835,721 per key and 1 Hotel sale to $1.4 million per key.

The market this year reported mixed metrics. Hotel data tracker STR, based in Hendersonville, Tennessee, reported a slip in revenue per available room, a metric that multiplies the average daily room rate by occupancy rate. At the same time there was a slight uptick in overall demand.

The RevPAR rate decreased 2.5% in Miami-Dade County and 3.8% in Broward County. At the same time, bookings went up 2% in Miami-Dade and Broward counties.

Both the RevPAR rate and bookings stayed flat in Palm Beach County.

Jan Freitag.

Trophy resorts offer investors an opportunity to deploy capital quickly in revenue-generating assets, said STR expert Jan Freitag.

"There's a lot of money out there chasing yield," said Freitag, senior vice president. "Other countries' bonds have actually negative interest rates, meaning if you lend money to the government you get less back than what you put in. That's not a good investment. So people look for other types of investment. And there is a ton of private equity and private debt funds out there needing to place money.They are looking for yield, and they are looking to deploy a lot of capital."

The buyers of both South Florida resorts are investment funds. MSD Partners is the investment arm of MSD Capital LP, which exclusively manages the Dell family assets. Host Hotels is a real estate investment trust that focuses on the lodging industry.

"These large trophy properties are very, very attractive as a thing to buy because you can park a lot of money very quickly," Freitag said.

In other major investments this year, New York developer Michael Shvo spent $243 million for three Miami Beach oceanfront hotels. Shvo, in a joint venture with Turkish real estate conglomerate Bilgili Group and real estate investment manager Deutsche Finance Group, in February bought the closed 105-room Raleigh Hotel for $103 million. They added The Richmond and South Seas hotels for $140 million. The three-hotel purchase breaks down to $773,885 per key.

And speaking of big investment funds looking to deploy big money fast, Brookfield Asset Management Inc., an alternative asset manager based in Toronto, Canada, bought at least two hotels.

It paid $218 million for the 339-room PGA National Resort & Spa in Palm Beach Gardens last December. The property sprawls across 800 acres with five golf courses, a 40,000-square-foot spa and 42,000 square feet of meeting space. It hosts the Honda Classic professional golf tournament.

Brookfield bought the property from Walton Street Capital LLC, a Chicago-based private equity firm, at $643,068 per key.

Brookfield also bought the 179-room Mayfair at Coconut Grove, best known for its architecture inspired by Spanish architect Antoni Gaudí. Brookfield paid $47 million, or $262,570 per key, for the Miami hotel.

Another notable deal this year was The Related Group's $43 million sale of the hotel portion at the 55-story SLS Hotel & Residences Brickell to a company managed by Franςois Faber, an associate at tax, accounting, corporate and fiscal consultancy Fiduciaire Fernand Faber in Luxembourg. The 124-room SLS hotel traded at $346,774 per key.

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RETAIL

Other market segments also did well with the real estate cycle still in an upswing and the region offering plenty of trophy assets.

Retail pulled ahead with 61% increase in sales by dollar volume in the first three quarters of the year compared with the same time last year, according to JLL.

The increase, which is the second highest across asset classes after hotels, is notable because it came amid brick-and-mortar worries about e-commerce growth and consumers opting for experiential retailers in a walkable setting.

But traditional suburban shopping centers grabbed the top-dollar deals in South Florida.

Publicly traded real estate investment trust Taubman Centers Inc., based in Bloomfield Hills, Michigan, bought a half interest in The Gardens Mall in Palm Beach Gardens from the Cohen family in exchange for 1.5 million shares in affiliate Taubman Realty Group.

The Cohen family co-owned the property since its 1988 opening with The Forbes Co., which retains half.

A REIT also scored the second biggest deal when InvenTrust Properties Corp., based in Downers Grove, Illinois, bought Royal Palm Beach's Southern Palm Crossing for $97 million from Blackstone affiliate ShopCore Properties. The open-air plaza with a Costco and a joint Marshalls-HomeGoods store sits on the 50-acre property.

The deal, which breaks down to $279 per square foot, set a record as the biggest single-asset retail sale in state history, beating the record coincidentally set by InvenTrust in 2017 when it bought two adjacent Pembroke Pines shopping centers for a combined $163 million. Each one sold for less than Southern Palm Crossing's $97 million price.

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Other Markets

Unquenchable tenant demand for multifamily and industrial are keeping both sectors busy.

The markets' strong fundamentals caught the eye of investors.

NexPoint Residential Trust Inc., a publicly traded real estate investment trust based in Dallas, bought The Avant at Pembroke Pines garden-style rental complex for $322 million, South Florida's biggest multifamily deal this year. The sprawling 1,520-unit complex on 85 acres is near Interstate 75 and Florida's Turnpike.

This was followed by Blackstone's $209 million purchase of two garden-style apartment communities south of Doral. It bought Doral View and Doral Station next door in the Fontainebleau neighborhood.

The two complexes have a combined 360 units, valuing the transaction at $290,000 per unit. That's more than the Avant's $211,842 per unit price.

In industrial, the $178 million sale of Hialeah's Centergate at Gratigny was the biggest deal statewide. RREEF America, a subsidiary of New York-based DWS Investment Management Americas Inc., bought the 74-acre complex from PGIM, a subsidiary of Prudential Financial Inc.

Land transactions remained flat, and the tracts that sold are slated for development.

Kolter Homes LLC, a major homebuilder in the Southeastern U.S., will develop 800 homes for residents 55 and older on 270 acres in Palm Beach County's newest city of Westlake. Kolter bought the land from master developer Minto Communities USA, based in Coconut Creek, for $52 million in the year's biggest land deal. Westlake, incorporated in 2016, sits on 3,800 acres that used to be orange groves along Seminole Pratt Whitney Road.

New York-based family-owned real estate firm Lalezarian Properties LLC bought 2 acres in the downtown Miami Worldcenter for $43 million. The site could be developed with up to 2,600 residential units as part of the 10-block, 27-acre mixed-use project.

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What's up with offices?

The office market recorded $900 million in sales in the first three quarters of the year, a surprising 27% drop from the same period last year, according to JLL.

Hermen Rodriguez Hermen Rodriguez

The market isn't weakening and buyers' interest isn't waning, but there just aren't enough trophy assets with willing sellers, said JLL's Hermen Rodriguez.

"The reason that there would be a drop-off is really a supply-side issue. We don't have enough product in the market to meet the demand that investors want," said Rodriguez, senior managing director in Miami. "A lot of our assets have traded hands, and they are either being repositioned or in a holding period for the investors. It's not that there is not the demand for it. There's not enough supply to meet the demand."

Still, the office market recorded notable deals as Shorenstein Properties LLC, a San Francisco-based real estate investor, bought two office buildings in the downtown Virgin MiamiCentral train station complex for $159 million. The 17-story 2 MiamiCentral and 12-story 3 MiamiCentral were developed and sold by Virgin Trains USA parent Florida East Coast Industries LLC.

Developers moved forward with new projects this year, bringing the first downtown trophy office towers in years.

The Main Las Olas under construction in downtown Fort Lauderdale includes a 25-story office tower that will be completed next year.

In downtown West Palm Beach, Related Group is building the 20-story 360 Rosemary, and Jeff Greene is building One West Palm, a 30-story, two-tower, mixed-use project that will include offices at 550 Quadrille Blvd.

"There is some new supply hitting the market, but developers are disciplined. They are waiting to make sure the economics work for new development," Rodriguez said, adding the office market is strong despite an overall drop in sales.

"There's a lot of activity," he said. "There really is."