When hospitality development firm HES Group purchased a Midtown Miami lot in 2014, it planned to build a hotel. Monday, the 4company is putting the 1.02-acre site up for bid in a direct sale or joint-venture opportunity, said Francisco Arocha, the firm’s CEO and founder.
The mortgage on the lot at 3601 N. Miami Ave. is three weeks in arrears, and the mortgage holder has begun foreclosure proceedings, Arocha said, due to the pandemic’s severe impact on the hospitality industry.
“The hospitality industry has been hit,” Arocha said. “Once you’ve been hit, you have to digest that situation and prepare for the new cycle that is going to begin in the next few months. Miami is going to continue to position itself as one of the most attractive cities in the world and, as in the past, it will recover. [Already,3/8 we saw people travel by car in the summer and we are just starting to see air travel.”
Design-savvy HES also co-owns Aloft hotels in Brickell and Coral Gables, a Hotel Indigo in Brickell, and several Miami restaurants and hotels in Latin America.
HES purchased the property for $12.25 million in 2014 with plans to build a 500,000-square-foot, 20-story mixed-use Triptych, with retail, office and 297-room hotel. The Miami Urban Development Review Board approved of plans in 2015.
The site is approved for a 24-story tower with up to 300 hotel rooms.
Miguel Pinto, president and broker at the MiMo-based Apex Capital Realty, and Daniela Lainville, Realtor with Yaffe International, are representing the seller.
The site is ideal for a mixed-use project, including all of the components — retail, office, and hospitality — HES Group originally planned for, Pinto said. “Anyone that buys this site won’t get off the ground for 18 or 24 months. I don’t see ourselves wearing a mask in 24 months. People will be coming back.”
Pinto and Lainville will issue requests for offers in December. Although HES has not specified a minimum price, Pinto and Lainville are not asking for a specific amount, a comparable sale closed at $544.60 per square foot. In April 2020, the 1.11-acre site at 201 NW 21st St. sold for $26.4 million.
South Florida’s hospitality industry has been severely impacted by the pandemic. HES Group’s original predictions of an overall 50% drop in occupancy rates in its South Florida hotels have proven optimistic; in September, hotels experienced a 37% occupancy rate in Miami-Dade County, according to industry data firm STR. Across the market, employee furloughs have been widespread.
However, some developers are betting on recovery and moving forward with new projects, including Dezer Development’s Sunny Isles Monaco hotel; Fernandez Properties’ 64-room hotel in South Beach, and the new luxury Aman hotel and condos, planned for the historic Versailles hotel in Mid Beach.
“Hospitality is going through a tough time right now but the rainy days are going to go away,” Pinto said.
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