Soffer Deal to Buy Diplomat Resort Is Back on, for $850M: Sources
By Chava Gourarie November 9, 2021 2:52 pm
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The sale of the 1,000-room Diplomat Beach Resort in Hollywood, Fla. is back on, after falling through at the start of the pandemic, Commercial Observer has learned.
Jeffrey Soffer’s Fontainebleau Development and Koch Real Estate are buying the Diplomat resort for around $850 million, according to a source with knowledge of the deal.
The Diplomat resort, located at 3555 South Ocean Drive, is the second largest resort in Florida. Soffer already owns Florida’s largest—the famed 1,600-room Fontainebleau Miami Beach.
In 2019, Soffer planned to buy the Diplomat from the Brookfield (BN) Properties subsidiary Thayer Lodging Group, but the deal was pulled in May 2020, shortly after the pandemic threw the hospitality industry into chaos, according to Brookfield’s financial filings.
At the time, Fontainebleau president Brett Mufson said the company was continuing discussions with Brookfield because they loved the asset, according to The Real Deal.
Brookfield had initially put the hotel on the market in January 2019 with an asking price of $1 billion, or $1 million per key, according to reports at the time. Brookfield completed a $100 million renovation of the hotel in 2017, and refinanced the property with a $168 million mortgage in 2019.
Soffer has previously teamed up with Koch Real Estate, the real estate arm of Koch Industries, to buy the unfinished Drew Las Vegas, a 60-story hotel on the Las Vegas strip, earlier this year. The project is almost 15 years in the making, and its original developer was none other than Soffer himself.
Brookfield and Fontainebleau Development did not immediately respond to request for comment.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
