As a luxury rental property, The Crown has performed "exceptionally well," according to multifamily specialist Robert Given, vice chairman at real estate firm CBRE. He was not involved in the transaction.
"This is one of the very few options on the barrier islands, the only option I know of with a walk-on/walk-off to the beach," Given said. "Most of the apartments [in the area] are achieving rents in the $2.50-a-square-foot range, while Crown was achieving in the $3-a-foot range. That is quite exceptional for a rental basis."
If Geolo indeed plans to convert The Crown back to a hotel, it would be a case of trading an already profitable model for an even more profitable one, Given said.
"It's like taking a strong-performing Vegas casino and razing it to build a bigger one," he said.
The existing apartment community can provide short-term cash flow while the new owners prepare a long-term strategy for the hotel.
"There is an exceptionally strong surge of interest on the leisure front to get back into the hotel business," he said. "South Florida has been such a strong performer the last couple of years. The options to get into a beachfront hotel are fairly rare."
The city's Collins Waterfront Historic District zoning allows both residential and hotel uses, so Geolo should be able to easily reposition the site as a hotel if it so chooses, according to Miami attorney Alexander Tachmes, a partner at Shutts & Bowen who represents numerous hotel owners and management companies. Tachmes represents the nearby Courtyard Miami Beach Oceanfront, which was previously known as the Cadillac Hotel.
"They could essentially convert the apartments they have now with no requirement to increase the square footage," Tachmes said. "Or they might try to subdivide the square footage and probably increase the unit count."
Top Multifamily Deal
If considered a multifamily transaction, The Crown sale would be South Florida's most expensive in 2012.
The sale easily surpasses the region's next priciest deal: the $64.7 million sale of the Winner's Circle Apartments in Parkland on Aug. 2. There were several multifamily trades between $40 million and $60 million in Broward and Palm Beach counties.
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