NATIONAL REPORT—In less than a year, U.K. private equity real estate investor Henley has invested more than $75 million in properties in Miami.
In September, the company acquired Vintro, a 50-room boutique hotel in Miami Beach. In April, Henley acquired The Jazz Hostel and Jefferson Hotel. All three properties are being renovated as four-star Life House hotels.
“Our investment in the Miami market is related to macro and micro fundamentals, to the nuances of the specific neighborhoods they’re in, to an operational and development arbitrage we have in our operating partner, Life House,” said Garrett Solomon CIO/managing director of Henley North America.
“Additionally, we believe real estate prices have been disproportionately affected in the market due to recent random events like Zika and Hurricane Irma, which have impacted hotel performance in the short term, but shouldn’t affect long-term value,” he continued. “Furthermore, Life House—the first Silicon Valley-backed lifestyle hotel company—has found a way to develop these relatively small, but complex projects in record time with low budgets, and the technology-enabled platform allows for operating these small hotels quite efficiently, something most other investors don’t have access to.”
All of the properties will provide an element of shared accommodation, something particularly beloved by millennials, according to the company. “Our shared rooms are the highest-end bunks we’ve ever seen,” said Rami Zeidan, co-founder/CEO of Life House Hotels. “They’re targeted for groups of travelers traveling together, and Miami Beach is a high group-travel destination. There is a population of groups (four-plus guests per room) that desire to stay in a boutique hotel when traveling and are happy to share a room, but either have to squeeze into a double-double, get four separate rooms, or book an Airbnb. The luxury bunk bed we’ve designed caters directly to groups seeking a boutique hotel experience at a fraction of the cost of even competitive Airbnbs.”
Life House decided to target millennials with these properties, after reviewing what they thought the best use of the real estate would be. “Millennial travelers want to stay at boutique hotels, but oftentimes, don’t want to or can’t afford to pay the high rates,” he said. “We offer the same high-design, high-quality, local experience as the best boutique hotels, except at 30-50% less expensive.”
Henley is targeting what Solomon calls a “mature millennial, who appreciates the depth behind our stories and values, but also caters to families—there are more and more ‘cool parents’ these days who are often neglected in the hotel world. Our goal is to reset consumer expectations around what a hotel experience can be—one where people do not have to choose between the experience they want and what they can afford, one where they can have it all.”
The company isn’t solely targeting millennials. “More than the demographic of millennials, we are targeting a psychographic that is age neutral,” he said. “This builds a diverse community of like-minded guests that value the experience, not simply the price, and we have standard rooms, bunk rooms and suites to cater to all.”
Zeidan said that the hotels are working to offer what all consumers want. “Traveler needs and desires have also changed much faster than big hotel chains are able to adapt. We have approached the consumer problem holistically by catering not only to those who want a high-touch experience, but also to travelers who want to be able to skip the check-in desk and head straight to their room,” he said.
To do this, the company is using technology. “We’ve built a lot of technology on the back end that allows us to provide features on the front end—from a mobile app with keyless entry, to our social network, to ordering room service, to selecting your own room and purchasing an early check-in or late checkout in advance,” he said. “We’re ahead of the status quo today, and we’re set up to innovate after we launch to incorporate features and amenities that don’t exist today.”
The first property scheduled to reopen after the renovations is Life House Little Havana. “It takes the identity of a high-born expeditionist’s tropical mansion and will feature a ground-floor café and bar and a rooftop bar, restaurant and garden,” said Zeidan.
Life House South Beach is scheduled to open in the first quarter of 2019. “It is located in the heart of the South of Fifth neighborhood in South Beach, steps from the water,” Zeidan said. “The hotel’s identity takes that of an artist’s beach cottage, a peaceful refuge near the shore, with restaurant, bar and café.”
The repositioning of the three properties coincides with the reopening of the Miami Beach Convention Center. Currently undergoing a $615-million renovation, the convention center expects 900,000 attendees in the first year. “The resulting demand for quality accommodations in the immediate area will be instrumental in the hotels’ future success,” said Solomon.
For an in-depth look at the recent launch of Life House Hotels, check out our story in the Dec. 15, 2018 issue. HB