Dubai Selling Stake in Iconic Miami Hotel

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An investment arm of the Dubai government is selling its 50 percent stake in the Fontainebleau, the landmark Miami Beach hotel, Reuters reports.

The buyer is Turnberry Ltd., the South Florida developer controlled by the Soffer family, according to the wire service. Turnberry principal Jeffrey Soffer bought the Fontainebleau in 2005 and recruited Dubai World as a partner in 2008.

Dubai World paid $375 million for its 50 percent stake in the iconic Miami hotel. Dubai World's portfolio includes DP World, Drydocks World and Istithmar World, an investment arm with stakes in everything from Barney's New York, the retailer, to the Atlantis hotel in the Bahamas.   

The Fontainebleau Miami Beach, designed by architect Morris Lapidus, is known for its distinctive curved façade. The hotel, which opened in 1954, was featured in the opening of the James Bond film "Goldfinger," and was a frequent haunt of Frank Sinatra, Jerry Lewis and an array of Hollywood stars.

In 2008, the 1504-room resort reopened after an extensive renovation. The resort reportedly borrowed more than $620 million to fund the overhaul. In 2010, after the market slowed, the owners were forced to restructure the debt.

Meanwhile, Dubai World was going through its own financial travails. The company shocked markets in 2011 by announcing an extensive restructuring of $25 billion of debt, including a promise to sell non-core assets.

Since then, analysts have been busy speculating which assets Dubai World would sell. In June Dubai World subsidiary Economic Zones World sold U.K. logistics warehouse developer Gazeley, which it bought in 2008.

Dubai World is also expected to sell stakes in MGM Resorts and Inchcape Shipping Services.

Three sources confirmed the pending sale of Dubai World's stake in the Fontainebleau, Reuters said. But no sale price was named.