South Miami-based multifamily developer The Estate Companies has purchased the Ramada Hotel in Hialeah for $15.25 million.
“The distressed hotel sector has created investment opportunities that firms like ours are ready and able to capitalize on,” said Jeffrey Ardizon, a principal of The Estate Companies, in a statement.
The purchase of the five-acre site, at 1950 W. 49th St., closed Friday, according to the release. The Downtown Miami-based LV Lending provided $11.5 million in financing.
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The Estate Companies does not have any plans finalized for the site, according to its spokesperson.
Other multifamily developers are expected to buy South Florida hotels, said J.C. de Ona, southeast Florida division president of Centennial Bank, to convert the buildings to apartments or redevelop the land. “The pandemic has spurred distress with the hotels. Even if an owner is able to carry it, the owner may have to make the decision whether they are going to carry the hotel long term. The longer the pandemic goes the more distress you’re going to see.”
Hotels, especially older ones, that catered primarily to the airports or ports are more likely be bought for redevelopment, de Ona said. Those in areas with a growing renters population, including Hialeah, may have particular appeal.
The developer acquired the 258-key hotel, which opened in 1970, because of its location. “The site is situated on arguably the City of Hialeah’s busiest corridor and main artery. The City of Hialeah is a market with very high barriers to entry, strong demographic support and close in proximity to some of the largest employment hubs in South Florida,” Ardizon said in a statement.
Homeowners in the area saw values rise in 2020. Hialeah experienced one of the biggest gains on its existing property values from 2018. Values increased by 6.7 percent. Rental rates are among the least affordable in the country, according to a 2020 report by WalletHub.
The Estate Companies opened in 2012 and has built a handful of apartment buildings across Miami-Dade and Broward. Five projects in the works including locations in Downtown Miami, the Health District and Dania Beach.