Sold to Honolulu-based Trinity Investments and Credit Suisse Asset Management for $835 million
In the largest single hotel transaction in nearly four years, The Diplomat Beach Resort in Hallandale, Florida is sold to Honolulu-based Trinity Investments and Credit Suisse Asset Management for $835 million. The property will remain part of Hilton’s Curio Collection.
The hotel used to be a Westin, and the story of how it became one is interesting.
In the ’60s and 70’s the original Diplomat was frequented by Rat Pack types. The hotel closed in 1991 and was acquired by the International Brotherhood of Plumbers and Pipefitters in 1998, torn down, and rebuilt at a cost of ~ $800 million in construction costs and $40 million for the property. That’s about what it’s being sold for today – without adjusting for inflation.
When the feds looked at a building project funded by a union pension to a tune just shy of $1 billion dollars, they said… nah, fuggedaboutit.
The Department of Labor found that the union had done “no feasibility studies, market analyses, market-tested construction budgets, construction schedules, economic models or gathered other information with which to make an informed decision.” They just embarked on a billion-dollar project with untold potential for untold sorts of activities. And since the union’s pension fund was doing it, ERISA law came into play.