$800 Million Sale of Second Largest Hotel in South Florida Falls Through

An $800 million deal between Jeffrey Soffer’s Fontainebleau Development and Brookfield Property Partner’s Diplomat Beach Resort Hollywood was called off on May 8 as the effects of COVID-19 on South Florida’s hotel and tourism industries continues to cause havoc. The 1,000 room Diplomat Beach Resort Hollywood, located at 3555 South Ocean Drive in Hollywood, FL, is the second largest hotel in South Florida following Soffer’s 1,600 room Fontainebleau Miami Beach, whose $975 million CMBS loan entered special servicing in March 2020. Fontainebleau Development is reportedly still in discussions with Brookfield Property Partners and may revisit the acquisition in the future.

The Diplomat Beach Resort Hollywood was first marketed for sale in January 2019 asking $1 billion, $1 million per room. Brookfield Property Partners, which is the real estate division of the Toronto-based Brookfield Asset Management, acquired the hotel for $460 million in 2014 and rebranded the flag from a Westin hotel to a Curio Collection by Hilton. In 2017 Brookfield completed a $100 million renovation and in September 2019 led a $168 million refinancing of the hotel with the funding provided by Morgan Stanley, J.P. Morgan and Wells Fargo.