Hotels like Prime, Sense and Villa Italia restoring South Beach real estate market

Khloe Kardashian shops in MiamiYou'd have to be out of your mind to open a new hotel in this economic environment, right? Apparently not if the location happens to be South Beach, the trend-setting (ie., expensive) southern tip of Miami Beach, Fla.

In fact, the hotel market is actually expanding not only in South Beach, but elsewhere in South Florida, says the Miami Herald. But it is particularly of note in South Beach where boutique (ie., small and sometimes expensive) hotels are opening their doors.
Along or near Ocean Drive, tourists can find such new lodgings as the Prime Hotel, the 18-room Sense, and the 14-room Villa Italia (opening in the fall). At Prime Hotel, (roughly $450 a night) you can even take some time away from your sun worshiping to keep up with those frisky Kardashians, who reportedly like to hang out at the very trendy Prime 112 restaurant, which happens to be right next door to the hotel (and owned by the same guy).

But as much as their egos would like to make them think so, new hotels aren't opening in South Beach just to house the various Kardashians.

Some figures from Smith Travel Research may help explain why developers continue to --well---develop in South Beach: In January, "Miami-Dade hotels saw their first gain in per-room revenue since August 2008..."

It's too early to tell if we are seeing the start of a sustained turnaround for the South Beach hotel-tourist industry. Only this past summer, for example, bookings at the high-profile Delano hotel in South Beach dropped by some 20%. Another pricey hotel, the Shore Club, had its per room revenue take a 40% dive.

Although there is yet another spring-summer cycle to get through, the architect who designed the Prime, Sense and Villa Italia projects, Luigi Vitalini, has his sights set on the winter solstice, when all three of his babies will be up, open and running.

Hotel developer Gregory Gerasimov tells the Herald, "I'm encouraged. Otherwise, I wouldn't be building anything."

When I was in college, too long ago to remember, I used to journey down from my frozen perch in New York City to the warm embrace of the Florida sun. In those days, though, South Beach was where mostly old and mostly very poor folks lived in the rundown hulks of what used to be luxury hotels.

Some of those old hotels have been rebuilt and have a new lease on life; others were knocked down to make way for the new (but made to look Art Deco old) hotels that crowd even the side streets of South Beach.

If South Beach is really, truly making a comeback from the cold of the deep and dark recession, I say all power to it and let the sun shine in.

Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle." He has written about real estate related issues for several years.

Read Full Story