JLL has arranged $575 million in financing for the Diplomat Beach Resort, a beachfront property located in Hollywood, Fla.
JLL’s Hotels and Hospitality group represented the borrower, a joint venture between real estate funds managed by Trinity Investments and funds managed by UBS Asset Management’s Real Estate & Private Markets Multi-Managers business. The five-year, floating-rate loan was secured through mortgage lenders, Citi and Deutsche Bank. The interest-only loan also includes mezzanine financing from Ohana Real Estate Investors and CPPIB.
In February 2023, JLL led the sale of the 1,000-room resort and represented the seller, Brookfield Properties, in the deal. The transaction was the third biggest single-asset sale ever in the U.S. at the time. Managed by Hilton, the resort operates under the Curio Collection by Hilton brand.
The hotel underwent extensive renovations and repositioning through a $90-million capital plan in 2018. The property consists of a twin-inspired, 36-story building which houses the guestrooms, a 15,000-square-foot spa, six restaurants and bars as well as several swimming pools and waterfalls. The resort sits on 10 acres of beachfront overlooking the Atlantic Ocean and offers kayaking, paddleboarding and jet ski rental services to guests.
“We are pleased to have represented Trinity in the financing of this iconic Florida beach resort, which is poised for outsized performance growth following a planned renovation, coupled with the ongoing strength of the South Florida lodging market,” said JLL Hotels & Hospitality team Americas CEO Kevin Davis.
In December 2023, Trinity sold two development parcels and a private marina across the hotel to a Miami-based real estate developer. The parcels were located within the Diplomat Landings site, sitting on 8 acres along the intracoastal waterway on the western side of Ocean Drive.
The South Florida lodging industry has been recording a steady improvement since the pandemic, making it one of the best performers in the U.S. hotel market, JLL said in a release. The recovery of group demand and the considerable demographic shift into South Florida is helping the market’s recovery.
RevPAR in each of Florida’s top 10 lodging markets outperformed the overall U.S. performance in 2023, data from JLL’s recent State of the Florida Lodging Industry revealed. Lodging performance in Q1 2024 suggests that the hotel industry’s performance is expected to return to normal growth this year.
Construction of new hotels has been active across most of Florida’s lodging markets, according to the study. However, in each market, the existing construction pipeline means fewer anticipated deliveries compared to the net deliveries seen between 2020 and 2023. Some 58% of the hotel rooms under construction in the state’s top 10 lodging markets belong to full-service properties, highlighting that there is a continuing shift towards higher-rated demand and clientele in these markets.
