A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. More than a decade ago, Carlos Rodriguez Sr., executive chairman of Driftwood Capital, a Miami-based real estate and hospitality investment firm, started acquiring properties in Brevard County, Florida. There was not a lot of demand after the space shuttle program was canceled in 2011, and there was very limited supply due to strict environmental regulations. But Rodriguez had a theory about the outer space race. “I saw a lot of bright future, and even though the bankers were saying to me ‘no,’ and a lot of people were thinking that I was crazy, I said, ‘Look, guys, this has the potential for being something big,'” said Rodriguez. He was watching the rise of the private space industry, with companies like SpaceX and Blue Origin. He also saw the influx of defense industry companies that were part of that space economy. First he bought a Hilton hotel from Blackstone and fully renovated it. It quickly proved the potential of the area, which then led him to the International Palms Resort, which had fallen on hard times. “It was the bottom of the bottom, but it had density. It had the amount of rooms that we would need if we were to redevelop. So we bought it as a covered landplay, where we would generate the money from that hotel until we’re ready to build,” he said. And that’s precisely what he did. Construction on the new $420 million Westin Cocoa Beach Resort & Spa began in September 2024. It is set to open next year. Driftwood also invested in an Element hotel and the Crowne Plaza in Melbourne, Florida. Once the Westin opens, Driftwood will control about 11% of hotel inventory in the region and 62% of the beachfront hotel inventory, according to Rodriguez. “When you have all these top-level executives coming to see their launches, and quite frankly, a lot of scientists, it made sense to build a luxury hotel,” he said. Adding a conference center with the Westin, he said, “made all the sense in the world when you have all these companies like Amazon putting their satellite processing facility there at the Kennedy Space Center, and you have SpaceX, Blue Origin, L3Harris , Northrop Grumman , Lockheed Martin , and I can go on and on.” Rodriguez sees in hospitality what David Steinbach, chief investment officer at global real estate investment, development and management firm Hines saw in the industrial sector just a few years ago. In an interview with CNBC’sPropertyPlaylast summer , Steinbach described his strategy to invest in warehouses in order to support the infrastructure needed to put data centers in space. A year later, he said he is still bullish on theplay. “Our investment in the Space Coast is going well, and we’re happy. Since the story ran I’ve had a lot of inbound on different companies doing different things,” said Steinbach in an interview Friday, the same day SpaceX made its debut on the Nasdaq . “It feels like a lot of hype, and that will certainly die down after the IPO. I’m trying to take an investor mindset. I still believe firmly in what that future looks like,” he said. “In Florida, those things are going to take time to materialize and deploy.” Meanwhile Rodriguez said Driftwood continues to look for more land to develop and more opportunities to invest in the space real estate economy. He said he was encouraged by the 2019 establishment of the U.S. Space Force and even casual talk among new friends in the space industry. “You thought that you were hearing ‘Star Trek’ with all these fantasies about mining asteroids or collecting solar power in fields in space, or creating data centers in space,” said Rodriguez. “When you hear all that, you start thinking, what are these people smoking? But, quite frankly, it’s becoming a reality faster than anybody envisioned.”
The private space race is spurring a luxury hotel land grab for Florida oceanfront property