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Deal reached to sell New York's Plaza Hotel for US$600 million
AFTER years of trying, two investors have reached a deal to buy a majority share of the historic Plaza Hotel for US$600 million. This was confirmed by a top executive for the seller, the Sahara Group.
The buyers are Shahal Khan, founder of the Dubai-based family office White City Ventures, and Kamran Hakim of the Hakim Organization, a major New York City landlord. The deal is scheduled to close on June 25.
Sandeep Wadhwa, head of corporate finance at the Sahara Group, which owns a 70 per cent stake in the hotel, and Sant Singh Chatwal, a hotelier who owns the other 5 per cent being sold, confirmed the deal. Both men declined to comment further, citing confidentiality agreements.
Opened in 1907, the Plaza is a city landmark and the only hotel listed on the National Register of Historic Places.
Home of the literary troublemaker Eloise, infamous for pouring water down the mail chute, the hotel has been featured in countless movies, from North by Northwest to Home Alone 2, and was at one time owned by US President Donald Trump, who lost it in a bankruptcy.
In 2005, it was largely converted into luxury condominiums, though a smaller hotel component and restaurants, including the Palm Court and the underground food hall, remain.
The Sahara Group has long tried to sell the property, and last year, it hired Jones Lang LaSalle, a brokerage firm, to carry out an auction of the property.
The latest deal follows a string of reported sales that never came to fruition, though this time the buyers have made a US$30 million deposit that they would forfeit if they backed out, making a completed sale more likely.
The deal is complicated by the fact that a partnership of Ashkenazy Acquisition, a real estate firm, and Kingdom Holdings, which is controlled by the Saudi Prince Alwaleed bin Talal, owns the remaining 25 per cent of the Plaza.
The partners have the right of first refusal to buy the hotel at the same valuation. That right is set to expire sometime in the next week.
Prince Alwaleed was among a group of Saudi princes and ministers who were taken into custody by the government in November in a series of arrests orchestrated by Crown Prince Mohammed bin Salman. He was released in January.
The transaction is complex. The US$600 million purchase price includes refinancing a more than US$410 million mortgage on the hotel.
The Qatari Sheikh Hamad bin Jassem bin Jaber Al Thani, known as HBJ, holds the mortgage, which is set to mature in early July.
The sale was first reported by real estate trade magazine The Real Deal.
Subrata Roy, chairman of the Sahara Group, and Mr Chatwal bought their shared stake in the hotel in 2012.
Shortly after the purchase, Indian regulators sought to arrest Roy over a bond sale. He was jailed for two years, and has since been ordered to return several billion dollars.
In 2010, Sahara purchased the Grosvenor House, a historic hotel in London. Last year, Ashkenazy Acquisition, with financing from HBJ, acquired that hotel. As part of that deal, HBJ took over the mortgage on the Plaza.
Mr Khan has spent several years trying to buy the hotel. It was suggested that he would use cryptocurrency to fund the acquisition, but the financing for the deal is a combination of traditional equity and debt.
Mr Hakim is a major landlord, with a portfolio of properties worth more than US$1 billion. He sued to get off New York's 100 worst landlords list, arguing that the buildings cited were vacant. A judge ruled against him in the suit last year. He is now listed at No 26.
Mr Khan confirmed the deal, but declined to comment further. Mr Hakim did not return requests for comment. NYTIMES