Inland Bags a Piece of Key West
Key West isn't just a place to go pretend to be Jimmy Buffett. It's a place to buy hospitality properties--if you can. (And if you can't swing that, get a cheeseburger at least.)
Inland American Lodging Advisor CEO Marcel Verbaas tells us that year-round, sustained international demand, along with high barriers to entry (something to do with all the ocean around the island, but also government restrictions on new supply) lead to high occupancy and the ability to significantly drive up average rate, especially during peak periods. Illinois-based Inland American got a piece of the Key West action recently by acquiring Hyatt Key West Resort and Spa for $76M from an affiliate of Hyatt Hotels. (It gives a great excuse to have "business meetings.")
Marcel adds that Key West is one of the highest average RevPAR hotel markes in the country, and the Hyatt's location within walking distance of most of the island's attractions should continue to drive strong returns on investment. For Hyatt's part, the sale was a chance to recycle capital, according to real estate and capital strategy global head Stephen Haggerty. (That's very green of them, in several ways.) This year the hotelier has sold seven full-service hotels or resorts for more than $500M. It will continue to manage the Key West property.