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Tuesday, November 1,2011

Casino Gambling in South Florida?


Despite a sluggish economy, U.S. lodging industry fundamentals continue to be fairly strong. Given a myriad of global and domestic issues, the verdict on short term future industry performance is far from clear. Any downturn in U.S.hotel metrics that may occur will be moderated by limited new hotel development.

Share prices of publicly traded hotel focused REIT’s do not currently justify acquisition activity, and they are effectively now out of the market. Large sums of raised private capital funds and overseas investors from throughout the globe are now better positioned to deploy capital into hard U.S. assets including hotel investments, which have traditionally offered superior risk adjusted returns.

The world is awash with liquidity, which to some extent will back fill the void left by REITS who until recently were flush with cash and extremely acquisitive. The United States has always been, and will always be the safest place on the planet to invest. Furthermore, urban 24/7 markets such as New York, Boston, Washington DC, San Francisco and Miami are highly sought after as many hotel assets trade at below replacement cost.

Florida Chamber of Commerce Opposes Casinos. “Florida is on the map now for high-wage, high-skilled jobs. We just don’t think we should sell out Florida’s long term future for the opportunity to make a quick buck. It’s the casino that we oppose.”

The Florida Chamber of Commerce will not back an expansion of casino gambling in South Florida. The Tallahassee-based organization reiterated the chamber’s 20-year-old position against expanding casino gambling in the state. The Gentling Group — which plans a massive resort, gaming and entertainment complex where The Miami Herald now stands — as well as other major casino operators, are pushing for legislation that would allow them to expand casino gambling. Gambling would hurt existing businesses, as well as Florida’s ability to diversify its economy. Yet if Gentling were to buy other casino operators’ licenses, thereby actually reducing gambling in the state, the chamber would take a second look.

Gentling paid $236 million for nearly 14 acres of land formerly owned by the Miami Herald. Under the contract, the Herald will stay in its current building rent-free through May 2013.


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