Southeast Florida's Compression Story Continues
Cap rates for select-service and boutique hotels in Miami-Dade, Broward, and Palm Beach counties have compressed another 25–40 basis points since Q3 2025. This is largely driven by institutional capital reallocation — pension funds and family offices are rotating out of office REIT positions and into hospitality.
For independent hotel owners, this means one clear thing: your asset is worth more today than it was six months ago, but the window may not stay open indefinitely.
What We're Seeing in the Data
- Miami Beach: Boutique hotel cap rates have compressed to 6.8–7.4%, down from 7.2–7.8% in early 2025
- Fort Lauderdale: Beachfront assets trading at 7.0–7.6%, driven by convention center expansion demand
- Palm Beach County: The strongest compression at 6.5–7.0%, fueled by wealth migration from the Northeast
- Naples / Southwest FL: Holding steady at 7.5–8.2%, but seasonal yield optimization is creating upside
The most common mistake we see boutique owners make is comparing their cap rate to national averages. Florida's micro-markets are hyper-local — a hotel three blocks from the beach in Fort Lauderdale trades at a fundamentally different multiple than one on US-1.
What This Means for Your Exit Timeline
If you're considering a sale in the next 12–24 months, the current environment presents a compelling window:
- Buyer demand is high — our qualified buyer network has tripled since 2024
- Financing is favorable — SBA and CMBS spreads have tightened
- Operating fundamentals are strong — post-pandemic ADR normalization has held
The Risk of Waiting
Interest rate uncertainty remains the primary risk factor. If the 10-year Treasury pushes above 4.75%, we expect cap rate decompression of 30–50 bps, which on a $15M asset translates to a $500K–$800K reduction in value.
How We Value Differently
At EnTrust, we don't just run a DCF and call it a day. Our operator-grade valuation methodology reconciles five distinct approaches:
- Income Approach — trailing-12 NOI with management fee normalization
- Sales Comparison — Florida-specific comp set, not national averages
- Cost Approach — replacement cost minus depreciation
- STR RevPAR Indexed — performance relative to competitive set
- Debt Coverage — bankability analysis that determines real-world pricing
This multi-lens approach consistently produces valuations that are 15–20% more defensible in buyer negotiations than single-method BOVs.
Ready to understand what your hotel is worth in today's market? Request a complimentary valuation — we'll have your BOV within 48 hours.