Blackstone Buys W Fort Lauderdale from Ross for $97.7M

Key Takeaway

• Blackstone acquires W Fort Lauderdale from Steve Ross' Related Companies for $97.7M, paying $282,225 per room.
• The sale follows Related's $55M renovation and rebranding of the hotel, initially purchased for $90M in 2014.
• Blackstone has been actively divesting its South Florida hotel portfolio, including recent sales of Marriott and Hyatt-branded hotels.

A High-Profile Hotel Trade in Fort Lauderdale

In a notable transaction within the hospitality sector, Related Companies, led by Steve Ross, has divested the W Fort Lauderdale, a prominent oceanfront hotel, to an affiliate of Blackstone, the investment behemoth helmed by CEO Stephen Schwarzman. The sale price of $97.7 million, or $282,225 per room for the 346-key property, marks a significant event in the South Florida hotel market, reflecting both the enduring allure of premium hospitality assets and the strategic shifts among major real estate players. This deal, completed over a decade after Related's acquisition and subsequent renovation of the property, underscores the dynamic nature of the hotel investment landscape, particularly in sought-after locations like Fort Lauderdale Beach Boulevard.

Strategic Shifts and Market Dynamics

The transaction between Related and Blackstone is not just a simple change of ownership; it represents a deeper strategic realignment within the hospitality sector, especially in South Florida's vibrant market. Related's initial purchase of the W Fort Lauderdale for $90 million in 2014, followed by a $55 million renovation, repositioned the hotel as a luxury destination under the W brand. Blackstone's acquisition comes on the heels of its divestiture of several South Florida hotel assets, including Marriott-branded and Hyatt-branded properties, signaling a nuanced approach to its portfolio composition in the region. This sale at a significant discount from the hotel's asking price six years ago highlights the fluctuating valuations and investor appetites in the post-pandemic market landscape.

Blackstone's Ongoing Market Play

Blackstone's purchase of the W Fort Lauderdale is a testament to the firm's continued interest in the leisure and hospitality sector, despite recent sales of other hotel assets in the area. This move aligns with Blackstone's broader strategy of seizing opportunistic investments that promise value enhancement and solid returns. The firm's statement, emphasizing a strong conviction in leisure hospitality and travel, coupled with intentions to expand its footprint in this sector, suggests a bullish outlook on the market's recovery and growth prospects. Moreover, the transaction reflects Blackstone's agility in navigating today's market conditions, leveraging opportunities that align with its investment thesis.

The South Florida Hotel Market: A Hotbed of Activity

The South Florida hotel market has demonstrated remarkable resilience and activity, underscored by significant transactions such as the sale of the Diplomat Beach Resort for $835 million, marking the region's largest hotel sale ever. The W Fort Lauderdale's sale to Blackstone adds to the narrative of a highly active market, attracting both domestic and international investors drawn by the region's robust tourism and leisure sector. This deal, alongside Blackstone's recent divestitures and acquisitions, highlights the nuanced strategies of major players aiming to capitalize on market trends, including the post-pandemic recovery of the hospitality industry.