Element Melbourne Oceanfront

Element by Westin Melbourne Oceanfront

Melbourne, FL

Oceanfront, 130-key suite-style hotel located on Florida’s Space Coast. Only beachfront Marriott hotel for 170 miles.

Ground-up development, a 130-room suite-style beachfront hotel in Melbourne on Florida’s Space Coast. The Hotel is expected to deliver strong returns upon stabilization (3-4 years post-opening) as the only extended-stay hotel on Melbourne’s beach and the only Marriott-branded beachfront hotel between Juno Beach and Daytona (170 miles).

23%

Target IRR

2.9x

Target Equity Multiple

$50,000

Minimum Investment

5-7 Yrs

Target Investment Period

Investment Highlights

The Melbourne-Titusville lodging market has significantly benefited from the strong resurgence of the private space sector, with SpaceX and Blue Origin leading an industry projected to grow to more than $3 trillion the next decade (Bank of America); the Artemis program of NASA, which plans to go back to the Moon, having invested $26 billion in developing the program and expecting to invest $2 billion on each launch (The Economist); hi-tech manufacturing industries; and robust military spending in the region through investments in the Patrick Air Force and Space Force with 17,000 employees and more than 3,200 active-duty military personnel*.

*http://www.militarybases.us/air-force/patrick-air-force-base/

This is the only Marriott-branded hotel on the beach between Juno Beach and Daytona (170 miles of oceanfront). This is a tremendous advantage as Marriott has the most robust distribution channel in the industry, with 141 million members in its Bonvoy loyalty program. Additionally, there are only two extended-stay hotel properties within a 5-mile radius of the Hotel, neither of which is located on the beach.

The area exhibits extraordinarily high barriers to entry for beachfront resort properties due to the scarcity of developable land, zoning, entitlements, community buy-in, and significant development complexity.

The area exhibits extraordinarily high barriers to entry for beachfront resort properties due to the scarcity of developable land, zoning, entitlements, community buy-in, and significant development complexity. The Hotel’s strategic location on an oceanfront parcel with direct access to one of the closest beaches to Orlando in the heart Space Coast caters perfectly to both business and leisure (bleisure) travelers and attracts year-round lodging demand.

Approximately 1.5 million people visit the Kennedy Space Center and 75 million people visit the Orlando area each year, with many national and international travelers staying in the area for an extended time period enjoying of the beach, the cruise port, and proximity to the amusement parks in Orlando.

About the Project

The Hotel would be the first beachfront Element Hotel built to be a resort in the brand’s portfolio. It features parking and a vehicular lobby on the first level with elevators up to a second-story, double-height reception area with a lobby lounge. An expansive pool bar and lounge with various seating options, including poolside cabanas and a firepit, with uninhibited views of the Atlantic Ocean and the beach, is planned. The Hotel will also include a multi-purpose meeting room with direct access to the pool deck and a 24-hour Motion Fitness center.

The project has several risk mitigants built in:
• It is fully entitled with all permits needed for construction
• Capitalization is secure through funding of EB5 equity and debt, 40% of equity syndicated to an institutional LP, and the remaining 60% being bridged by DDP while full syndication is underway
• A construction loan for $34M from Ocean Bank was closed in September 2022

In addition, a Guaranteed Maximum Price agreement is in place with the general contractor, Certified General Contractors, which is a local Melbourne firm with extensive hospitality experience. This protects investors against cost escalations of materials and labor during the construction process.

About the Element by Marriott Brand

Element Hotels by Marriott are designed for today’s healthy, active traveler who wants to maintain a balanced lifestyle while on the road. Element has redefined the longer stay experience with an outdoor-inspired design philosophy that is clean, modern, and bright. With a sustainable, nature-inspired aesthetic, all hotels feature spacious and airy studios and one-bedroom suites which are outfitted with fully equipped in-room kitchens, spa-inspired bathrooms, and signature Heavenly® Beds. Increasing flexibility and convenience for groups, Element’s one-of-a-kind private communal space, Studio Commons, is anchored by four guest rooms where guests can cook, convene, and relax together in the shared kitchen and living room areas. Element offers longer stay comfort with a conscience and thoughtful signature amenities, from its complimentary healthy Rise breakfast and Relax evening reception to all-natural saline swimming pools, 24/7 Motion Fitness centers, electric vehicle charging stations, and Element’s Bikes to Borrow program.
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