Trinity scores $575M refinance for Diplomat

HOLLYWOOD, Florida — Honolulu-based Trinity Investments has scored another high-profile deal, this time with a $575 million CMBS refinance of The Diplomat Beach Resort in Florida.

A joint venture between Trinity and Credit Suisse Asset Management has secured a five-year, floating-rate $575 million in financing for the resort in Hollywood, Florida.

JLL Hotels & Hospitality secured the financing through Citi and Deutsche Bank. Americas CEO Kevin Davis and Managing Director Mike Huth were among the deal’s leads. 

Davis told Hotel Investment Today that this transaction is an example of what he refers to as an opportunistic refinance. “The timing of the refinancing was absolutely tied to the attractiveness of the CMBS financing market,” he said. “While there was a maturing loan at the end of the year, that was incidental to the timing. Trinity and Credit Suisse have been very deliberate over the past 18 months in determining the right time to go to market and as the window opened, they executed the refinancing.”

Trinity purchased the resort from Brookfield Properties in 2023 for a reported $835 million. As part of the acquisition, the JV assumed an existing senior mortgage for $468 million and a mezzanine loan for $100 million. Credit Suisse helped Trinity assume the debt for The Diplomat and complete the deal.

At the time, Trinity CEO Sean Hehir told Hotel Investment Today it was a perfect purchase for the company. “We love these types of hotels, these bigger box, destination-type hotels, irreplaceable assets,” Hehir said. “We also understand the irreplaceability of assets like this. Nobody’s going to build, even if they wanted to, a 1,000-room hotel in South Florida. You can’t buy 10 acres on the beach — it doesn’t exist. And you can’t have another 10 acres on the Intercoastal… We know how to reposition them.”

The hotel, which Hilton manages under its Curio Collection, had an extensive $90 million renovation in 2018 and is having another renovation as part of this financing.

Details of the refinance

According to The Real Deal (which credits a Kroll Bond Rating Agency report), the JV of Trinity and Credit Suisse are expected to close a $452 first mortgage from Citi and German American Capital Corp. (a subsidiary of Deutsche Bank Americas Holding Corp). The mortgage is an interest-only floating-rate loan with an initial term of two years and three one-year extension options. Proceeds from the two loans and $48.3 million in equity will be used to refinance the existing debt and other obligations.

Austin-based Ohana Real Estate Investors and the Canadian Pension Plan Investment Board (CPPIB) are providing a $123 million mezzanine loan.

“The Ohana credit team was grateful for the opportunity to refinance this irreplaceable property for Trinity,” Ohana President and Chief Investment Officer Franco Famularo said in the press release announcing the refinancing.

Other Trinity deals

In December, Trinity sold two development parcels adjacent to the resort to Miami-based Related Group and Aventura, Florida-based BH Group for a combined $51.5 million. The parcels are located within the Diplomat Landings site, on eight acres across the Intracoastal waterway. Related and BH have plans for a 443-foot tower on one of the sites with a 500-key hotel, and condo-hotel united. They also plan for a 419-foot tower with 350 condos.

Trinity and its capital partner, Partners Group, have made several high-profile acquisitions over the past few years. In April, the JV acquired the 404-key Scottsdale Plaza Resort & Villas in Paradise Valley, Arizona, for an undisclosed amount. In 2022, the JV acquired The Las Colinas Resort in Dallas, which was recently converted to The Ritz-Carlton Dallas, Las Colinas, after an extensive renovation.

The partnership grew deeper in March of this year when Partners Group acquired a strategic minority stake in Trinity to support its future growth. It is first bringing $500 million to the table to drive acquisitions in the U.S., Europe, and potentially Asia Pacific.