It may attract the rich and famous, but even Miami's South Beach is feeling the impact of the credit crunch. The latest to fall victim to the credit market dislocation is developer Robert Falor, who has been forced to sell two hotels on the area's prestigious Ocean Drive. Falor had been planning to redevelop the Breakwater-Edison hotels into a condo-hotel that would pay homage to socialite and great-granddaughter of the Hilton family, Nicky.
After buying the hotel in 2004 for an estimated $17 million (€11 million), Falor was forced to admit defeat last year and seek protection from creditors, including private equity firm Oaktree Capital Management. Court filings revealed that Falor's South Beach Hotel Investors owed Los Angeles-based Oaktree about $60 million for a mortgage and a mezzanine loan.
Now the Breakwater-Edison – which was formerly two hotels – has been sold to a subsidiary of US jeans label, Jordache Enterprises, for $24.8 million (€15.8 million). Nakesh Holdings is expected to operate the Breakwater and Edison as traditional hotels, with reports suggesting the firm will spend more than $15 million on renovations. Under Falor's plans the Art Deco hotel would have been rebranded Nicky O and drenched in the smell of gardenias, Nicky's personal choice for the hotel scent. VIP guests would, of course, have been able to relax in the Nicky O bar and lounge before retiring to their suites, a few of which were set to be designed by Roberto Cavalli. We're sure the founding father of the Hilton Hotel group, Conrad Hilton, would have been proud.