REE 6715 RXT 1208 Real Estate Development
Professor Dr. William Hardin
Final Development Project
Fall 2020
Joseph Tapley
Yamilee Migliori
Alejandro Gue
ero
Tyler Martin
Pamela Armistead
Saka Ntiamoah
December 23, 2020
Aloft Hotel at 501 S.E. 24th St. in Fort Lauderdale
14-story, 138-room, + 140,000 square feet
Table of Contents
Executive Summary…………………………..……………………… 2
Description of Property….……………………..…………………….. 4
Market.……………………………………..………………………….. 6
Market Growth.…………………..…………………………………...12
Development Costs……………….……...…………………………….26
Financial Analysis...…………………………………………………...30
Summary and Conclusion…………………………………………….51
Exhibits……………………………………………………………….. 52
Executive Summary
The “investor group” is a private real estate developer based in the South Florida market that endeavors to develop their first Hotel. The group has previously acted in the capacity of an investment consortium making strategic investment on the public market.
The intent of the project is to serve as lodging accommodations for the Port of Everglades pre and post cruise business, leisure transient and local corporate. The cu
ent market of Fort Lauderdale is cu
ently depressed due to the COVID-19 pandemic but is anticipated to rebound in the coming years while the Hotel is under construction. Prior to the pandemic the COVID pandemic this Port was one of the busiest cruise ports in the world. Based on the timing of construction and anticipated recovery we are confident the timing of this project is a sound business decision.
The Aloft Fort Lauderdale will target revenues of approximately $7.2M in the first year of operations with net operating income of $2.6M. The stabilized year of operations is forecasted to achieve an occupancy level of 80.6%%, total revenues of $8.2M and net operating profits of $3.0M.
The equity required to execute the project is $11M, which will be a contribution by the investor entity to cover the land acquisition, construction, equipment and on boarding of the manager. The Hotel will be operated under a long-term management agreement with Ma
iott Hotels and Resorts.
The marketing strategy will allow us to communicate
and values, develop a unique offering for customers and maintain close relationships with suppliers to ensure the needs of guests are met in an effective manner. Growth will take place by continued recovery and targeting new areas of business within the local market.
Operating Summary - Pro Forma
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Hotel Keys
138
138
138
138
138
138
138
Occupancy
77.6%
79.9%
81.1%
80.6%
80.3%
80.2%
80.2%
Growth Rate
--
3.0%
1.5%
-0.6%
-0.4%
-0.1%
0.0%
ADR
$139.28
$143.83
$148.92
$154.28
$158.22
$162.78
$165.15
Growth Rate
--
3.3%
3.5%
3.6%
2.6%
2.9%
1.5%
Rev PAR
$108.08
$114.92
$120.77
$124.35
$127.05
$130.55
$132.45
Growth Rate
--
6.3%
5.1%
3.0%
2.2%
2.8%
1.5%
Room Rev
XXXXXXXXXX,444
XXXXXXXXXX,789
XXXXXXXXXX,083
XXXXXXXXXX,263
XXXXXXXXXX,400
XXXXXXXXXX,576
XXXXXXXXXX,672
Gross Rev
XXXXXXXXXX,265
XXXXXXXXXX,694
XXXXXXXXXX,052
XXXXXXXXXX,256
XXXXXXXXXX,412
XXXXXXXXXX,633
XXXXXXXXXX,778
GOP
XXXXXXXXXX,135
XXXXXXXXXX,498
XXXXXXXXXX,735
XXXXXXXXXX,834
XXXXXXXXXX,911
XXXXXXXXXX,016
XXXXXXXXXX,081
NOI
XXXXXXXXXX,590
XXXXXXXXXX,920
XXXXXXXXXX,050
XXXXXXXXXX,049
XXXXXXXXXX,028
XXXXXXXXXX,110
XXXXXXXXXX,160
Description of Property
The land parcel to be acquired for development is located at 501 SE 24th Street, Fort Lauderdale, Florida. Total area of the land parcel is 0.92 acres. The plan is for a total square footage build of 140,000, 14 stories and 138 guest rooms with an adjacent garage with 100 parking spaces. Property amenities per
and standards will include the W XYZ Bar and Fuel. W XYZ BAR is a lounge atmosphere serving cocktails and bar snakes in a lively environment. Fuel is a grab n’ go concept that is open morning to midnight while also providing made to order
eakfast items.
The guestroom configuration will feature a combination of bedding types of either two queen beds or one king size bedded room. All rooms will include fold out couches to eliminate the need for folding-out beds. The total inventory will include ten 1-bedroom suite units approximately 7% of the total available rooms.
Market
The greater Fort Lauderdale area includes over 25,000 hotel rooms (midscale product tier and up), with a total of 31,000 hotel rooms. Hotels in and around Fort Lauderdale range from newer takes on small, old Florida beach motels to luxury high rise with every possible amenity.
Competition Analysis
Aloft Hotels is open space and spirited in its product style and delivery. The approach is to
ing people together in purposeful environments with vi
ancy.
Fort Lauderdale has 300 miles of intercostal waterways as well is refe
ed to as the Yacht Capital of the World with 100 marinas and 50,000 registered yachts .The Fort Lauderdale market contains a number of sub-markets. The subject property is being developed in conjunction with the Cruise Ports therefore is focused on a clientele in the area for the business or leisure activity related to the ports. The competitive set detailed below are competitors that will be used to measure performance as a next step in the feasibility process as well on going using Smith Travel Research.
Competitive Property
Guestrooms
Meeting Space Square Meters
Renovated
Subject - Aloft Fort Lauderdale
138
641
Renaissance Fort Lauderdale - Cruise Port
236
XXXXXXXXXX,193
2016
Hyatt Place Fort Lauderdale - Cruise Port
126
XXXXXXXXXX
2012
Embassy Suites - Hilton Fort Lauderdale
361
XXXXXXXXXX,208
2014
Four Points by Sheraton Fort Lauderdale
112
XXXXXXXXXX79
2017
Hilton Fort Lauderdale Marina
595
XXXXXXXXXX,951
2020
Competitive Set Average
286
XXXXXXXXXX907
Market Growth
Recovery in the market is expected to start in the year 2021 based upon introduction of a vaccine in 2020 to address the pandemic. With that said there is no timeline for the cruise operations to start again. The most significant cost in the cruise industry is fuel as a result lower oil prices this may be a benefit to cruise lines. Cruise lines have already started to advertise huge discounts on the packages for 2021.
Based on CBRE’s projections occupancy in the Fort Lauderdale market is expected to reach 77.6% by 2023, which is in line to 2019’s results.
Development Costs
Development Summary (000's)
Category
$
Per Key
%
Land
$3,381
$24,498
11.05%
Building Constr. & Site Improvement
$16,827
$121,938
55.00%
Soft Costs
$3,365
$24,388
11.00%
FF&E
$2,754
$19,953
9.00%
Pre-Opening & Working Cap.
$2,448
$17,736
8.00%
Miscellaneous
$1,820
$13,191
5.95%
Total
$30,595
$208,514
0.00%
Financial Analysis
Summary and Conclusions
DIFFERENT. BY DESIGN.
Bursting with a vi
ant social atmosphere and a competitive price point, travelers
around the globe are seeking the Aloft experience. With 189 hotels across 28 countries
and 5 continents, Aloft has taken the industry by storm, stealing market
share and gaining third-party recognition while its raving
and fan base continues
to grow. The time to build is now. Let’s go.
2019 FRANCHISE HOTEL
PERFORMANCE*
Average
Occupancy Rate
74.0%
Average
RevPAR
$108.20
Loyal Customer Base
Average Percentage of Loyalty Program
Contribution to Occupancy at Aloft Hotels is
47.6%
Lower Cost Bookings
Ma
iott’s channels generate 76.5%
of Aloft Hotels’ reservations