South Florida resort sold for $835M, biggest deal for a U.S. hotel since pandemic started

Miami Herald (FL)

Hollywood has made history, drawing the biggest hospitality deal in the country since the start of the pandemic.

The oceanfront Diplomat Beach Resort sold for $835 million on Monday, according to a source familiar with the deal and a release from the brokerage firm JLL, which oversaw part of the transaction.

The Zurich-based Credit Suisse Group and the Honolulu-headquartered Trinity Investments, both investment firms, acquired the hotel at 3555 S. Ocean Dr. from Brookfield Asset Management, the same co-owner of the high-end outdoor shopping mall in the Miami Design District.

The Diplomat closing is one of the largest in U.S. history, with the most recent being the sale of the Boca Raton Resort & Club for $875 million in 2019.

The sale marks a new chapter for the 39-story resort. Encompassing 1,000 rooms, Broward’s largest hotel reopened in 2021 with the comeback of in-person conferences, the hotel’s biggest source of revenue. The hotel faced a few challenges after reopening, including employees threatening to go on strike last year. Workers demanded higher pay and protection from outsourcing jobs to non-union members. The hotel and union ultimately agreed to a new contract.

“Over the last few months of 2022, U.S. group demand reached 93% of 2019 levels and we predict even further acceleration through 2023, driven predominantly by upscale and upper upscale hotels,” said Jeffrey Davis, a JLL Hotels & Hospitality senior managing director and one of the representatives for the seller during the transaction. “The sale of the Diplomat was the third largest single-asset hotel sale ever in the U.S. and it’s truly a win-win for both the seller and the buyers.”

The hotel will remain under the management of Hilton Hotels and Resorts, after the new owners signed a deal with the hotel brand.

The buyers, seller and JLL could not be immediately reached for comment.

The deal gives a boost of confidence to the South Florida hospitality market, despite gloomy predictions of slowing activity given by Jeffrey Havsy, an economist with risk-assessment company Moody’s Analytics.