Miami developer OKO Group acquires The Ambassador co-op hotel and the adjacent Edgewater House co-op building on the South End of Palm Beach from Schlesinger family entities.
In three deals totaling $147.6 million, a Miami-based real estate investment firm has acquired The Ambassador Hotel and Residences and the adjacent Edgewater House residential building on the South End of Palm Beach, according to documents recorded Wednesday by the Palm Beach County Clerk's office.
OKO Group bought the properties, both of which were structured as co-operative buildings and together occupy land stretching from the Intracoastal Waterway to the Atlantic Ocean.
Built in 1947 but later expanded, the Ambassador has operated as a hotel that offers one-, two- and three-bedroom suites to guests for short-term stays as well as dining at the Ambassador Grille restaurant. Units there have also been advertised for longer-term leases. A call Thursday morning to the front desk confirmed the hotel was accepting reservations as usual.
The properties were sold to an affiliate of OKO Group by the Schlesinger family's West Palm Beach-based Copperline Partners through a Delaware-registered limited liability company, courthouse records show. The oceanfront Ambassador property fetched a recorded $87.8 million.
A different Delaware liability company controlled by OKO Group simultaneously paid another Schlesinger company $10.23 million for the lakefront land beneath the Edgewater House and another $48.57 million for the co-op leases there, according to courthouse records show. The building is directly west of The Ambassador on the opposite side of the coastal road.
In co-op buildings, apartments are not owned outright by their occupants. Instead, buyers acquire a share of the building, and a lease allows them to live in their apartment. When co-op units change hands, their leases and their rights to occupancy are “assigned” to the buyer.
Schlesinger family also owns majority of Palm Beach’s Brazilian Court hotel
In all, the Schlesingers’ company sold 96 of its 97 co-op apartments at The Ambassador, 2730 S. Ocean Blvd., and 36 units at the Edgewater House at 2720 S. Ocean Blvd.
OKO Group acquired the remaining apartment at The Ambassador for a recorded $1 million in a separate deal. Nicholas Arsali of the Arsali Family Trust sold Unit No. 723 via a separate lease-and-occupancy agreement recorded Wednesday.
Financing for the Palm Beach acquisitions was provided to OXO Group’s four ownership companies by two limited liability companies, MSD RCOF Partners LXXI LLC and MSD RCOF Partners LXXII LLC. The loan has a “maximum principal” of $105 million, according to the financing document recorded Wednesday. Francis H. Scola III, chief financial officer of OKO Group, signed the document on behalf of the borrowers. The Delaware-registered lending companies are affiliates of MSD Partners of New York City.
Copperline Partners is headed by real estate investor and family patriarch Richard Schlesinger. Adam and Robert Schlesinger also are company executives who were involved in the sales, courthouse records show.
Among its extensive portfolio of properties, Copperline Partners owns the majority of The Brazilian Court hotel condominium in Palm Beach. In March, the company acquired another Palm Beach property when it paid a recorded $9.755 million for all 29 former timeshare condominiums at the lakefront Palm Beach Resort and Beach Club Condominium Association, 3031 S. Ocean Blvd.
Buyer OKO Group has several projects underway in Miami
OKO Group was founded by Russian-born Vlad Doronin, who serves as its chairman and CEO. The company has “a track record of more than 75 million square feet of world-class commercial, retail and luxury residential space over a total of 71 buildings,” according to its website.
The buyer’s plans for The Ambassador and the Edgewater House were not immediately clear from Wednesday’s courthouse filings. But the combined properties might present a prime redevelopment opportunity among the residential buildings on the South End, where new construction is rare.
Such a project makes sense to Douglas Elliman Real Estate agent Scott Gordon, who wasn't involved in the sales but for many years has specialized in the South End’s market for condominiums and co-ops.
Redeveloping or replacing the aging buildings, Gordon said, would be the “highest and best use” of the properties.
In Miami, OKO Group’s projects include the new 830 Brickell office tower on downtown’s waterfront; Una, a luxury residential building under development at 175 S.E. 25th Road; and Missoni Baia’s 249 Edgewater, a waterfront tower being developed with fashion designer Angela Missoni.
The company also recently opened a mixed-use project under the name Aman New York, at 730 Fifth Ave. in New York City. It is part of Aman, Doronin’s portfolio of international resort properties.
Lawsuit brought by former board at Ambassador in Palm Beach was settled
The Schlesinger development company acquired its ownership interests in The Ambassador over several years and amid controversy. In 2019, a lawsuit was brought by the co-op’s board against the developer over what was described as an unwanted offer to acquire many of the units. The lawsuit was eventually settled.
In November 2019, Copperline Partners ended up acquiring the leases and occupancy rights to 69 of The Ambassador’s units for a combined $35 million, according to property records and published reports. The developer later expanded its acquisitions in the building.
In 2021, Copperline Partners paid a recorded $11 million for the land beneath the Edgewater House and another $14.95 million for the leases there. The Edgewater House was built in the late 1960s, records show.
The Schlesingers carried out improvements at The Ambassador. The property’s website this week touted the restaurant, “traditional Chinese wellness” programs, a 24-hour fitness center and complimentary continental breakfasts for guests.
“Our knowledgeable concierge and friendly on-site management team are here to serve you and perfect your stay,” the site said.
The Schlesingers and one of their attorneys could not immediately be reached late Wednesday. Representatives of Oxo Group also could not be reached.