Billionaire Jeffrey Soffer’s planned $850 million purchase of the oceanfront Diplomat Beach Resort in Hollywood is off, The Real Deal has learned.
Soffer’s Fontainebleau Development had been in talks to buy the 1,000-key hotel at least twice since 2019, and the latest deal fell apart, according to sources. Brookfield Property Partners owns the resort at 3555 South Ocean Drive. It’s the second largest hotel in South Florida.
Trinity Investments, the Honolulu-based real estate investment firm that was recently involved in the purchase of the East Miami hotel, is rumored to be the new buyer of the Diplomat. (Trinity Fund Advisors partnered with Certares Real Estate Asset Management to pay $174 million for East Miami at Brickell City Centre last year.)
Trinity did not respond to requests for comment. Brookfield and Fontainebleau Development declined to comment.
Thayer Lodging Group, now a subsidiary of Brookfield, paid $460 million for the nearly 10-acre oceanfront property in 2014. That price likely did not include furniture, fixtures and equipment.
The former Westin was rebranded to Curio, a Hilton Worldwide Holdings brand, shortly after the sale. About five years ago, Brookfield completed a $100 million renovation of the Diplomat.
The property, which includes more than 200,000 square feet of meeting and event space, 515 king rooms, 484 double rooms, 96 suites and a number of restaurants, sits between the Atlantic Ocean and the Intracoastal Waterway. It was built in 2002.
Brookfield listed the resort for sale, asking as much as $1 billion three years ago, prior to the pandemic. Newmark Knight Frank and Hodges Ward Elliott were tapped to list the property, but are no longer involved, sources said.
South Florida’s hospitality market recovered more quickly than in other parts of the country, thanks to the huge boost from leisure travelers within Florida and from across the U.S., brokers say.
Fontainebleau Development, led by Chairman and CEO Soffer and President Brett Mufson, was expected to pay about $800 million for the Diplomat, but that deal was terminated early on in the pandemic once lockdowns took their toll on the hospitality industry.
Then, last year, the Commercial Observer reported that Fontainebleau was back in the deal, offering about $850 million for the property.
In South Florida, Fontainebleau Development’s other hotel properties include the Fontainebleau Miami Beach and the JW Marriott Miami Turnberry Resort & Spa.