The story of major events across the top 25 markets in the U.S. this year is quality over quantity. But there's a question that remains to be answered: How good will the quality be?
Executives at publicly traded hotel companies provided their thoughts on the topic during their recent fourth-quarter and full-year earnings calls.
The two events that came up the most were the 2026 FIFA World Cup, which will take place in 11 U.S. markets, and celebrations for America's 250th anniversary.
Here's a roundup of commentary from hotel executives on events in 2026.
Chris Nassetta, president and CEO, Hilton
"As we look to the year ahead, we feel optimistic that 2026 will be stronger than 2025. We believe this will be driven by continued strength in EMEA improvement in APAC and an improvement in the U.S. driven by stronger economic conditions, major events, easier comps and continued limited supply."
Tony Capuano, president and CEO, Marriott International
“I happened to be with the FIFA leadership over the weekend. I asked them specifically whether they were seeing any hesitancy from inbound international bidders for the World Cup. And these are their words: They were stunned by the volume of ticket requests they've seen from around the world, as soon as the website launched. So, it's early, but we're feeling really good about the early returns.”
James Risoleo, president and CEO, Host Hotels & Resorts
“But one thing that we're excited about for the year that should be a benefit for our portfolio is the World Cup matches. So World Cup, we expect 60 basis points of full-year RevPAR benefit from the World Cup. That's a net 40-basis-point pickup if you take into consideration that 2025 benefited from the inauguration to the tune of 20 basis points.
“Given the geographic diversification of our portfolio, we have World Cup matches in 10 of our markets, which is, I think really quite attractive for us going forward. So, we would expect a benefit in [the second quarter] as there are more matches — more markets in [the second quarter] than in [the third]. At this point in time, we don't have a good handle on how things are going to evolve because we believe that the booking pace is going to be 30 to 60 days out. And we'll have a much better indication in our May earnings call how World Cup is going to affect our performance for the year. So, that's a big plus for us.”
Jon Bortz, chairman and CEO, Pebblebrook Hotel Trust
“Our outlook for this year, and I'm trying to be clear in my comments that we're being very conservative where we don't have full visibility, knowing that there are disruptions that can pop up that we don't anticipate pretty much any given day of the year.
“When we look at the last nine months of the year, it really is an implied RevPAR growth of 1% to 2% for our range. And that really doesn't take into account significant benefit from World Cup, from America 250, from other events, from the benefit of the holiday calendar. And it doesn't really take into account the assumption that demand re-correlates with [gross domestic product] because otherwise, with a forecast of GDP in the 2%, 2.5% range, our forecast for the industry would be higher than the range that we laid out at 0% to 2%.
“So, we're being very conservative. We think it's very prudent right now given our experience last year with our outlook for the last three quarters.
“In terms of the trends we're seeing right now, they're all positive. I mean, other than the weather, where we had a second weather event, a blizzard with Winter Storm Hernando, which really put a damper on what was looking to be a really great month in February for the industry and clearly impacted travel all over the country. So, we're still seeing the trends be positive.”
Justin Knight, president and CEO, Apple Hospitality REIT
“We are incredibly excited about the potential for incremental business and incremental travel related to the World Cup. Our teams, both at our corporate office and our management teams, are intently focused on working to ensure that we maximize the opportunity which means layering the appropriate business into the hotels, taking group where appropriate, and early bookings and then blocking rooms to maximize rate as we get closer to the games.
“The booking window is still short. And so, I think a significant part of the reason that at the midpoint of guidance, we're not reflecting the optimism we have about the potential business is because from our perspective, it's too soon to tell.
“As we get closer and are in a better position with more business on the books, we will also be in a better position to quantify the actual impact.”
Bill Hornbuckle, president and CEO, MGM Resorts International
“Within the group and convention channel, we are experiencing mid-single-digit revenue growth in 2026. This year's mix will be closer to 20%, and the quality of the groups I feel has improved because of meticulous action carried out last year focused on improving profitability. To date, we've had solid performances during citywide events, including CES in January, and we're excited for the return of CON/AGG with expectations of getting back to 2023 attendance and achieving more than our fair share among the 140,000 attendees arriving into Las Vegas. Even more exciting is the fact that we have … [more] group and convention nights on the books for future years than we've ever had in our history.
“While the 2026 event calendar continue to fill out, we are seeing comparable arena capacity citywide events relative to last year, which will help provide stabilization levels of business given the proximity of our properties to the golden triangle of venues: Allegiant, T-Mobile and MGM Grand Garden Arena. Tent-poling events such as Formula 1 also continue to drive visitation this year, and our Strip properties saw higher room rates and increased cash ticket sales at the Bellagio Fountain Club, which remain the premier ultra-luxury hospitality venue to watch the race.
“At the end of the day, there's nothing comparable to Las Vegas. People are visiting to have unforgettable experiences, and their exceptional value is the optionality of what our guests can enjoy and discover on any particular visit. There's also value in the unmatched energy and excitement that surrounds everything you do in this town. That's why Las Vegas was selected to host the College Football Playoff National Championships in 2027 and the Final Four in 2028. Las Vegas is where the NBA's exploring expansion and Major League Baseball is now establishing operations. We've also extended our relationship with F1 for five years.”
Pat Pacious, president and CEO, Choice Hotels International
"Upcoming national events, including the 2026 FIFA World Cup, the U.S. 250th anniversary and the Route 66 Centennial provide additional demand catalysts."
Jonathan Stanner, president and CEO, Summit Hotel Properties
"The company is poised to benefit from several special events in 2026, notably the FIFA World Cup. We have exposure to six World Cup host markets, which together account for nearly 60% of the matches played domestically, providing a unique demand tailwind in June and July.
"In addition, convention and special events calendars are favorable in several of our key markets. And we expect continued normalization of government-related demand and international inbound travel as year-over-year comparisons begin to ease in the second quarter."
...
"I will say we're very constructive around World Cup. I do think the industry has tempered expectations to some extent around what that will actually drive. What we pointed out on the call and what I'd emphasize is a couple of things. One, we've got exposure to about 60% of the matches domestically and it touches about one-third of our total portfolio. And so we do have a significant amount of exposure to the World Cup. When we roll it up, again, we expect to see the vast majority of the benefit of those matches in the six markets where we host.
"I think the biggest impacts — positive impacts for us will come in markets like Atlanta, Miami, and Dallas. But we also expect to see some lift in a market like Orlando, where people will kind of tack on an extra trip in South Florida potentially from Miami. When we roll it all up for our outlook, we think it probably adds plus or minus 50 to 75 basis points to our full-year expectations."
Leslie Hale, president and CEO, RLJ Lodging Trust
"The lodging industry is expected to achieve slightly positive RevPAR growth this year, driven by the ongoing positive momentum in non-government related business travel, increased leisure demand, especially urban leisure demand from several unique events, particularly the World Cup games, plus the 250th anniversary of America, in addition to healthy group dynamics.
"We believe that these trends will disproportionately favor urban markets, allowing them to continue to outperform the broader industry. Against this backdrop, we believe we are well-positioned, given our favorable geographic exposure, urban footprint and high impact capital investments, which should allow us to benefit from the broad based growth across all the segments that urban markets are capturing.
"[We have] a favorable footprint, with a number of World Cup games across nine of our markets, including prominent games in New York, Los Angeles and Miami. The 250th anniversary of America, with large-scale-related events in the Boston, New York, D.C. and Philadelphia markets. The favorable rotation of more major sporting events, including the NFL draft, the Major League Baseball All-Star Game and the NCAA March Madness."
Bryan Giglia, CEO, Sunstone Hotel Investors
"There is the potential for industry-wide lift from special events such as F1 in Miami, which we missed last year, America 250 celebrations and the World Cup. ... While there are many encouraging signs, the industry and Sunstone have been disappointed by various headwinds over the past 2 years, making us more cautious. That said, we are excited about our prospects this year. And if costs remain controlled and some of these events produce more than our modest expectations, we could be positioned to see performance accelerate as the year progresses."
Atish Shah, executive vice president and chief financial officer, Xenia Hotels & Resorts
"Events such as the FIFA World Cup and America 250 are expected to drive strong demand in many of our markets. Our preliminary estimate is that these unique events are anticipated to drive about 75 basis points, or approximately one quarter of our expected 2026 RevPAR growth. These estimates are preliminary, as much of the demand is likely to be transient and has yet to book. We expect varying degrees of benefit across the portfolio, depending on distance from the venues and other factors."
U.S. Has a Message for Spring Breakers Traveling to Mexico
Puerto Vallarta Tourism Board
https://www.fodors.com/world/mexico-and-central-america/mexico/experiences/news/u-s-has-a-message-for-spring-breakers-traveling-to-mexico
Travel responsibly.
The U.S. Embassy in Mexico has issued a spring break advisory for Americans traveling to Mexico. It notes that while violence from last month has subsided, risks of kidnapping and crime remain. The advisory outlines key points travelers should review before planning trips to Mexico.
“Crime, including violent crime, can occur anywhere in Mexico, including in popular tourist destinations. This includes homicide, kidnapping, carjacking, and robbery. U.S. citizens should exercise caution in popular spring break spots, especially after dark,” the advisory states. Other highlighted crimes include sexual assault, extortion, and scams. Travelers are also urged to watch out for strong currents at beaches and to avoid swimming alone, while intoxicated, or at night.
The advisory reminds Americans that certain items are prohibited in Mexico. Vapes, e-cigarettes, and e-liquids are illegal in the country, and possession may lead to fines of over $10,000 or arrest. Drugs and firearms are also restricted, with violations potentially resulting in lengthy imprisonment.
Last month, the U.S. advised Americans in Mexico to
shelter in place due to civil unrest after the death of cartel boss El Mencho. Gang members responded violently, burning cars and blocking roads. Airlines canceled flights to the tourist hub of Puerto Vallarta and Guadalajara. Taxi services, rideshares, and public transportation were also disrupted, leaving many tourists—primarily Americans—stranded. The situation has since stabilized, and the U.S. Embassy lifted all restrictions on February 25.
The U.S. State Department currently has a
Level 2: Exercise Increased Caution advisory for Mexico. However, some regions, including Colima, Sinaloa, Zacatecas, and Guerrero, have a Level 4: Do Not Travel warning. “There is a risk of terrorist violence, including terrorist attacks and other activity in Mexico.” Because advisories vary by region, travelers should check guidance for their specific destinations before planning a trip.
Cartels do not typically target tourists or expats, and the government provides heightened security in tourist zones. However, travel always involves risk, and tourists should evaluate the local situation and enroll in the federal government’s
Smart Traveler Enrollment Program (STEP).
Spring Travel
Americans are preparing for spring break after a long winter and multiple snowstorms. Airlines for America, a trade group representing major airlines in North America, expects an
all-time high number of travelers this spring. The organization estimates that U.S. airlines will fly 2.8 million travelers each day from March 1 through April 30, totaling 171 million travelers this spring.
Global events may impact international travel. The war in the Middle East has disrupted flights worldwide, as Abu Dhabi, Dubai, and Doha have curtailed operations and closed airspace. Since these cities are major travel hubs, the impact will likely affect travelers this spring.
Aimbridge courts hotel owners with focus on bottom line, better access to executives
Restructured and reinvested company has eyes on performance growth
Aimbridge Hospitality has gone through a restructuring and significant reinvestment over the past year. (CoStar)
https://www.costar.com/article/547717679/aimbridge-courts-hotel-owners-with-focus-on-bottom-line-better-access-to-executives
After a few rebuilding years, Aimbridge Hospitality's CEO said he expects the third-party hotel management company is ready to take on the opportunities before it.
Recent hotel forecasts have projected flat hotel performance based on past years, but 2026 should be a bit better,
Aimbridge President and CEO Craig Smith said in an interview. It will be tough for U.S. hoteliers as there are still challenges from inflation and wage increases, even as those pressures ease.
The pandemic and recovery led to a lot of people changing jobs, putting greater pressure on wage growth, Smith said. Things have settled generally, and workers are coming back to the hotel industry. Wage inflation may still outstrip revenue-per-available-room growth, but it won't be by as much. It remains to be seen, however, the full effects that tariffs will have on goods and services.
"Basically, it's really going to be a year that we have to figure out how to drive more bottom line to our owners," he said.
If Aimbridge can grow share, then it's growing RevPAR for hotel owners, Smith said. The company has doubled down, adding more jobs above the property level and having big sales teams focused on different sources of hotel demand.
"So, rather than roll over and say, 'Hey, it's a bad top-line year,' we're saying, 'Well, we think we can steal share, and we think that we have the ability to now drive a little bit more to the bottom line for our teams,'" he said.
A new start
At the beginning of 2025, Plano, Texas-based Aimbridge saw its ownership change
through a debt-structuring deal, relieving the company of some financial weights on its back. When the deal was finalized, Aimbridge went from having a “very unhealthy” balance sheet to one of the strongest in the industry, Smith said.
“That’s really given us an opportunity to not only invest outward, but it’s interesting — our investors, our owners, are making sure that we’re investing in ourselves, so there’s a lot of internal investment,” he said.
At the same time, Aimbridge was gaining ground with hotel owners,
moving out of what Smith deemed as the “penalty box” at the time. Ownership satisfaction is not measured just the level of complaint but by also by whether those owners want to bring more hotels under Aimbridge's management.
“That’s how I judge it, and it’s nice to see that most of them are calling us and offering us hotels,” he said. “We’ve got calls from outside. We’ve got a lot of phone calls lately for new hotel deals, and we’re at a point where we’re starting to turn some things down that really aren’t accretive to us.”
Aimbridge also has an
entirely new board of directors: six board members including Smith and its chairman, Steve Joyce. Every member of the Aimbridge board has hospitality experience, so they know the right questions to ask and directions to push, Smith said. Some board members are leaning into the company’s growth. Others are deep in the accounting side of the business, further helping the company’s health.
Within the executive leadership team, Aimbridge has had some wins over the last year through promotions and new hires, Smith said. Allison Handy has been promoted three times over the last two years to be the chief commercial officer, leading the company’s sales, marketing, revenue management and brand efforts. These were previously siloed functions that are now working together, and Smith said its enjoyable to sit in on meetings and hear how all the teams are working together and strategizing.
Aimbridge’s select-service division holds the majority of its hotels, Smith said. The company hired Chris O’Donnell from Atrium Hospitality to be president of this division.
His counterpart over the full-service division is Chris Tatum, who joined Aimbridge in August 2024 after leading a portfolio of hotels for Davidson Hospitality.
Over the past year or so, Aimbridge has had more time to work on its performance management culture, Smith said. There’s more meritocracy, and it has promoted people who are performing well. It conducts monthly performance reviews at every level. Smith and his executive leadership team meet with their respective teams, and they in turn do the same down through their organizations to see how they’re doing, what they can do better and find where they can lean in.
Taking this approach helps identify the people who can actually drive hotel performance because measuring results every month shows who can move the needle, Smith said. When he first came to Aimbridge, Smith talked with people he calls historians, who could explain everything that happened in the past month. It was great to start because they knew their numbers, but they couldn’t necessarily change the future, he said.
“[They’re] really good at telling you why you didn't make the numbers or why you didn't perform, but the real leadership is, can you change and move the needle going forward?” he said. “And so, some of those folks have really come up in organization.”
Reinvestment
As part of Aimbridge’s balance sheet restructuring, the company received $100 million in new capital. That allowed the company to reinvest in its ratios, lowering the number of hotels per regional vice president, Smith said. Aimbridge has done the same on the commercial side as well.
“We want to be a team that the revenue leader, sales leader and an [operations] leader all have the same portfolio of hotels,” he said.
Aimbridge has also reinvested into data analytics, Smith said. The business analytics team is doing well, and while they’re already doing a lot of work, the company will invest more into machine-learning and artificial intelligence. The marketing and digital team has added strong talent as well.
Aimbridge’s board of directors and investors want further investment in AI, Smith said. Currently, the leadership team is sitting in the space figuring out the best area to pursue.
“Because we don’t want to invest in AI in the areas the brands are, the [online travel agencies] are,” he said. “We want to be complementary, and so we’re looking at labor productivity models, forecasting.”
Aimbridge has already invested some in this area, and it’s planning to spend more because better forecasting can lead to achieving better rates and revenue per available room, he said. That can also mean better scheduling and better sales on the bottom line.
“I think in this industry, this time period has been really hard to forecast because there’s so much going on, but if you can react faster and better than your competitors, that puts you much farther ahead,” he said.
Working with owners
Aimbridge’s hotel owners are saying they feel like the teams are focused on them, Smith said. The teams are back under ownership groups instead of split up geographically. Third-party hotel management is not a business-to-consumer business; instead, it’s business-to-business.
“Those owners really wanted one or two touchpoints,” he said. “They wanted one or two [regional vice presidents] that are receiving their portfolios. They didn’t want to talk to 12 different people because they have hotels in 12 different states.”
The restructuring made the owners happier as they had an easier time talking to the right people at Aimbridge, Smith said. They also saw hotel performance improve over the past year. The hotel industry overall has seen muted RevPAR growth, but Aimbridge was able to deliver more for its owners than its competitors.
“We have a lot of focus on that top line, that commercial side,” he said. “I know that's one of our biggest key competitive strengths. And I think owners are seeing that, the above-property teams that we have going forward, and so there's a lot of positive talk about what they're seeing.”
The meetings Smith said he had with hotel owners at the NYU International Hospitality Investment Forum two years ago were “pretty rough.” By comparison, the meetings now still include feedback about what could be better, but overall Aimbridge is receiving positive feedback about its teams and leadership.
The third-party management space will see further consolidation through companies buying each other or merging with one another, Smith said, adding that Aimbridge's scale will be an advantage in the future. The good and bad thing about the third-party hotel operations space is the barriers to entry are low.
“You got a cell phone, you have a car and, if you worked in a hotel, you can start up an operating company,” he said. “Really, the barriers are very low, and that’s probably one of the reasons that we see that the business is so fragmented.”
Given Aimbridge’s size, it’s about two to three times as big as the next hotel management company, and the other bigger companies are double the size of their next competitor, he said. At the same time, Aimbridge’s portfolio is roughly 1,000 hotels, but Marriott International is nearly 10,000 hotels while Hilton has about 9,000.
“As big as we are, we don't even have 1% of the industry,” he said. “I think you're going to see consolidation going forward, because I think there's some advantages with cost and with AI and tools that owners will see that that are relevant.”
Smith said some of Aimbridge's hotel owners have shared concerns that as soon as a company gets big, it doesn’t do well, but his goal is to prove them wrong. Some companies get big and full of themselves, forgetting they win one hotel at a time. But setting up a system that measures every hotel individually and in groups means Aimbridge is concentrating on who is winning and who’s not and the reasons why.
If a company grows just to get big and pat itself on the back, no one cares that it’s big, he said. Owners care about their hotels. They only want to work with a bigger company because it can deliver things at a cheaper cost, freeing them to invest more money in the tools they need.
“I think that's what the industry hasn't done, it hasn't reinvested to those benefits,” he said. “And so, as you get large, are you really giving those benefits of scales to your owner, or are you taking internally for yourself as a company?”
These are internal conversations at Aimbridge, he said. If it renegotiates a contract, it could take the benefits itself, but the point is to give it back to the owner. When an owner joins with Aimbridge, it can show it has better purchasing prices and less expensive information technology, human resources and benefit costs. On top of that, it can show it has money to invest in tools that can improve forecasting, leading to better scheduling and labor costs.
Growth prospects
As Aimbridge looks ahead,
all-inclusive resorts are a big deal for Smith. Most of them are big-box hotels with a lot of guestrooms, generate great fees and have longer-term contracts.
“I think nobody really dominates in this space,” he said.
Leadership of this property type requires understanding how they work, he said. Putting someone in charge of an all-inclusive resort who only has select-service or urban hotels experience isn’t going to work. While some of the leadership team had experience with all-inclusive resorts, Aimbridge bolstered its all-inclusive skill set with some new hires, including a sales leader and a new vice president of operations and an upcoming hire yet to be announced.
Aimbridge is looking at both coasts of Mexico and the Caribbean for all-inclusive management opportunities, he said. The company also recently opened an all-inclusive resort in Port Lucie, Florida.
The popularity of all-inclusive resorts continues to grow because guests like the concept of making one payment to cover everything, especially as many are traveling with multiple generations of family, he said.
“You don't have to worry about somebody having an extra thing of fries or taking something out of the mini bar,” he said.
As the third-party management model gains ground internationally, Aimbridge is seeing opportunities open up in multiple countries. Europe, where Aimbridge already has a presence,
has paths for growth in the United Kingdom as well as in Belgium, the Netherlands and Luxembourg, Smith said. The company is also receiving a lot of calls about hotels in southern Europe.
Aimbridge is looking at the Asia market, but it might be too early, he said.
“I don’t want to stretch my team too thin, going too many directions at one time,” he said. “The United States is still our top priority. It’s such a huge market, there’s so much opportunity here. I think it’ll probably be the biggest growth in the short term.”
So, while the calls out of Asia and the Middle East are excited, Aimbridge wants to make sure it can have sustainable success, Smith said. When talking with owners in other countries, Aimbridge executives explain they need a minimum number of hotels in the area to justify having an office there to service them well. It won’t work to have four hotels spread across four Asian countries overseen by someone who has to fly out from the West Coast of the U.S.
“You need somebody in that market, and I learned having lived over there and also in other parts of the world that nothing beats local knowledge,” he said. “So, having an office where people wake up every day and read the local newspaper and know what's going on makes a big difference.”
Over the past few years, Aimbridge has pushed its teams to recognize hotel brand companies as a fourth stakeholder alongside its owner, hotel owners and Aimbridge associates, Smith said. That wasn’t the mindset before, and the relationship reflected that. After this shift, Aimbridge has been asking for performance reviews, and the brands are seeing guest satisfaction scores “have shot through the roof,” Smith said.
This had led to brands recommending Aimbridge to hotel owners, particularly in areas that are still new to the third-party management model, he said. The teams are now working with hotel owners in different regions, explaining that while they will pay two fees, they’re still going to make more money on the bottom line.
It can be confusing to hotel owners who haven’t done this before, so it helps having people in these markets who have experience with the model, he said.
“When you’ve got leaders that go into a market that have worked and know people and are trusted, this is a trust business,” he said. “I think it makes it a lot easier, and that’s helped us to get a foothold.”
With all of these potential paths to further growth, Aimbridge’s teams are also being careful about growing too much, too fast, Smith said.
“We need to be disciplined in our growth,” he said. “I think you can grow to death. …You need to make sure that you don't sit in front of a buffet line and eat more than you can digest.”
Billionaire Barry Sternlicht says a steady flight to high-tax states reshapes capital flow
Starwood Capital Group CEO points to reset underway in office, multifamily property
Barry Sternlicht, center, discussed his views on commercial real estate trends influencing the country on a tour of a luxury condominium his company is building in Miami Beach, Florida. (Joshua S. Andino/CoStar)
https://www.costar.com/article/768640568/what-billionaire-barry-sternlicht-thinks-about-real-estate-funding-taxing-the-rich-and-why-miami-needs-more-marinas?
Billionaire real estate investor Barry Sternlicht said the reset underway in U.S. office and multifamily markets is creating fresh deal opportunities nationwide as the flight of wealth and businesses from high‑tax states to South Florida reshapes capital flows.
South Florida has scored hundreds of corporate relocations and expansions since the pandemic, leading to an influx of entrepreneurs, corporate decision makers and the funds that can fuel prosperity. High-profile technology firms as well as financial giants like Citadel Securities and Thoma Bravo have expanded or relocated to the Miami area in recent years.
Sternlicht, CEO and chairman of Starwood Capital Group, has had a front-row seat to the region’s growth since moving the firm’s headquarters to Miami Beach from Greenwich, Connecticut, in 2018 and setting up a permanent location in a new office at 2340 Collins Ave. three years later. He considers Miami a durable growth market rather than a pandemic-era anomaly.
While he has done business worldwide since founding his alternative investment management firm in 1991, he said he "really" appreciates how businesses in Miami are encouraged to succeed from both local officials and residents alike. He spoke during a media tour this week of the Perigon, a luxury condominium project that Starwood Capital is developing alongside locally based Mast Capital, in Miami Beach, about six miles northeast of downtown Miami.
Even so, Sternlicht and his firm are struggling with pressures from high interest rates as well as rising labor and construction costs squeezing margins across commercial real estate. In 2024, Starwood forfeited three Bay Area office towers to Deutsche Bank and Starwood with joint venture partner Artisan Ventures surrendered the 1.6-million-square-foot Pacific Corporate Towers to lenders, according to media reports. More recently, a 22‑hotel Starwood hotel portfolio spanning 17 cities and backing a $265 million loan moving into special servicing
this past January.
The Perigon is one of several real estate irons Sternlicht has in the fire in Florida. Starwood Capital is working with Fontainebleau Development on a luxury condo project in Jupiter Island along Florida's Treasure Coast. Sternlicht is also chairman of Starwood Hotels, which is focused on
selective growth of the company’s three brands: 1 Hotels, Treehouse Hotels and Baccarat Hotels. Starwood Hotels recently announced plans to build a hotel under its Treehouse brand in Miami Beach.
Throughout the tour, Sternlicht discussed potential deals in the office and multifamily markets, the ongoing wealth flight from high-tax states and the Miami-area’s growing infrastructure needs. Below are his thoughts on various trends shaping commercial real estate in South Florida and across the nation:
What the wealthy are up to: Floridians are “astonished” when it comes to just how high taxes are in other parts of the country, Sternlicht said, adding that in "blue states" it's just “tax after tax after tax,” referring to California and the Northeast. California’s proposed wealth tax “really pissed off” the state’s wealthy residents, and it has been a contributing factor to why the CEOs of major tech giants like Facebook’s Mark Zuckerberg and Google’s Larry Page have personally made the move to Miami, snapping up multimillion-dollar residences throughout the city.
Where the deals are: Office and multifamily, Sternlicht said. While office property prices have
started to rebound following their pandemic-era collapse, Sternlicht noted that for multifamily, there's been a load of new supply that's hit the market over the past few years. That means owners and developers are upping their concessions to potential residents, aiming to hit occupancy rates even as many of them are “having discussions” over potential refinancings with “banks all over the country,” he said. Some markets like New York remain “shockingly strong,” said Sternlicht, with the city “holding its prices" across all assets.
South Florida's infrastructure needs: Schools and marinas are key issues facing Miami and the wider region, Sternlicht said. Companies whose employees have moved down to Miami are facing limited options, and that has led to years-long waitlists for schools that often fail to receive the same attention as affordable housing. "I think if we could just get the schools built, we could have a lot more systematic growth," Sternlicht said. And when it comes to recreation, South Florida — a region that's built part of its economy and fame for its waterfront location — needs more marinas for the "everyday boater," Sternlicht said.
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