Reuben Brothers Buying Majority Stake of W South Beach Hotel in Miami
The deal would value the oceanfront property at over $400 million
By Julia Echikson October 1, 2024 3:51 pm
reprints
The Reuben brothers are set to expand their South Florida real estate portfolio with the W South Beach hotel in Miami Beach.
The British real estate moguls are in advanced talks to buy a majority stake in the luxury hotel, according to a source with knowledge of the negotiations. The recap deal — which has yet to close and which Newmark’s Doug Harmon is brokering — would value the oceanfront property at over $400 million.
The transaction follows a contentious chapter between the W South Beach’s current owners, Aby Rosen’s RFR Holding and David Edelstein’s Tricap. Last year, the New York-based firms sued each other over a scuttled buyout deal as a $157 million loan approached maturity.
Back in 2004, Edelstein purchased the 3.5-acre site at 2201 Collins Avenue, which housed a Holiday Inn, for $77 million. The developer partnered with RFR Holding in a 50-50 ownership structure to redevelop the property into a luxury condo-hotel that was completed in 2009.
Negotiations over the W South Beach come as RFR Holding is struggling. RFR’s portfolio leans heavily on New York office buildings, including some of the most iconic in the city, such as 375 Park Avenue tower, commonly referred to as the Seagram Building.
But since the pandemic and the rise of remote work, many office towers have plunged in value, and at least five loans held by RFR have gone into special servicing this summer or face foreclosure. Just last week, Cooper Union moved to terminate RFR Holding’s ground lease of the iconic Chrysler Building. The firm has said it would resolve its debt issues without selling any of its Class A properties.
For brothers David and Simon Reuben, the W South Beach deal would mark one of its largest endeavors in South Florida. The British billionaires own a 25 percent stake in Jeffrey Soffer’s JW Marriott Miami Turnberry Resort & Spa and the Chesterfield Hotel in Palm Beach, in addition to a few retail buildings.
The Promote first reported about the W South Beach recap deal. Representatives for Newmark and RFR declined to comment. Representatives for Tricap and the Reuben brothers did not immediately provide for comment.
Julia Echikson can be reached at jechikson@commercialobserver.com.
