Saudi Prince, investors to drop $800m on New York’s Plaza Hotel
Real estate investor Ashkenazy Acquisition Corporation and its partner Saudi Prince al-Waleed bin Talal, minority owners of New York’s Plaza Hotel, have agreed to buy full ownership in a deal that values the property at $US600 million ($800 million), according to sources.
The investors, who already own a 25% stake in the 282-room hotel, have exercised an option to match a recent offer to buy the 1907 property. The partners have 45 days to close the deal. If they complete the acquisition, it would be among the most expensive hotel sales ever in the world on a price-per-room basis, a popular industry metric for valuing hotel sales.
Last week, the seller, Sahara Group, a Lucknow, India-based conglomerate that is the hotel’s majority owner, reached an agreement with two other investors — Shahal Khan, founder of Dubai-based White City Ventures, and Kamran Hakim of the Hakim Organization, a large private New York landlord — to buy the hotel.
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But Ashkenazy, a private real estate investment firm based in New York, and Prince al-Waleed had the right to match any agreement to purchase Sahara’s majority stake. Prince al-Waleed, who is one of the world’s richest men, was recently detained for more than two months by the Saudi government as part of a purge of elites in what it described as a corruption crackdown.
Sahara has long been trying to sell the hotel. Last year, Sahara hired JLL Hotels and Hospitality Group to find a buyer and has been in negotiations with a number of parties. About 50 private equity firms, foreign governments and other investors had expressed interest in the Plaza Hotel last year, but a deal had been elusive.
Sahara acquired its controlling stake in 2012 in a deal that valued the property at about $US575 million. Since then, Sahara founder and chairman Subrata Roy has faced legal troubles.
India’s Supreme Court in 2014 sentenced Roy to jail for failing to pay regulators what the government said was as much as $US4 billion of illegal debt issued to small investors. Roy spent two years in jail on contempt charges. Roy and Sahara have denied the allegations and say they have paid most of the debt owed to investors.
The pedigreed hotel comes with a coveted location on the southeast end of Central Park. Previous owners of the property include hotelier Conrad Hilton and Donald Trump, who once compared it to the Mona Lisa.
It has been featured in novels like The Great Gatsby and numerous films, including Alfred Hitchcock’s North by Northwest. Marilyn Monroe and the Beatles stayed there. John F. Kennedy’s sister Patricia Kennedy held the reception after her wedding to Peter Lawford in the Plaza’s ballroom. The agreement by Ashkenazy and Prince al-Waleed to acquire the Plaza was reported earlier by the New York Post.
– by Keiko Morris and Craig Karmin, The Wall Street Journal
This article originally appeared on www.theaustralian.com.au/property.