Plaza Hotel Sold for $600 Million

NEW YORK CITY—Owned by the Qatari government, Katara Hospitality, the largest hotel owner, developer and operator in Qatar, for approximately $600 million, acquired full ownership of the Plaza Hotel. This was first reported by Reuters earlier this week.

Katara purchased a 70% interest from the Indian conglomerate, Sahara India Pariwar, a 5% interest from Sant Singh Chatwal of Dream Hotel Management and the remaining 25% stake from Prince Alwaleed Bin Talal’s Kingdom Holdings and Ashkenazy Acquisition, according to The New York Post.

Neither Katara nor Sahara responded to GlobeSt.com by the filing of this article.

JLL’s Jeffrey Davis who represented Sahara tells GlobeSt.com, “We can confirm that 100% of the asset is now owned by Katara and we were the broker on the deal.”

A spokesperson for AccorHotels notes that Fairmont Hotels & Resorts will continue to manage the hotel with unchanged, continued service.

It appears that behind the pristine elegance of the landmark hotel and apartment condominium, located at 768 5th Ave., the financial skirmishes and jousting for ownership, unseen by guests and visitors, have almost reached a conclusion.

A sketch of the behind-the-scene dealings makes the Plaza Hotel look a bit more like an MC Escher construction than the storied building of mythic, New York imagery. Truman Capote held his “Black and White Ball” in the Grand Ballroom. Built in 1907, the hotel has been featured in multiple films ranging from “North by Northwest” to “Almost Famous.” With historical significance in American literature, it created the home for the children’s fictional character Eloise, and a memorable setting in F. Scott Fitzgerald’s “The Great Gatsby.” The location was where escaping New York City’s sweltering summer heat and humidity–Jay Gatsby confronts Tom and Daisy Buchanan with his idealized version of love.

Yet the realities of the Plaza Hotel may seem stranger than fiction. In May 2018, The New York Times reported that Shahal Khan, founder of the Dubai family office White City Ventures and New York City landlord Kamran Hakim, were set to buy the hotel. The paper confirmed this with the majority interest holder, the Sahara Group, and with Khan. The article noted that Ashkenazy Acquisition and Kingdom Holdings, two groups that held a 25% interest, had the first right of refusal. (Prince Alwaleed, who controls Kingdom Holdings, had been arrested and placed in custody by the Saudi crown prince but had been released in January 2018.)

The New York Times stated the $600 million purchase price included refinancing of a more than $410 million mortgage on the hotel. It noted The Real Deal had first reported on the sale. (It also provided history that in 2012, Subrata Roy, chairman of the Sahara Group, after purchasing the shares in the hotel, was imprisoned based on a separate bond sale and ordered to repay billions of dollars.)

The lawsuits and wrangling also entangle well-known US real estate figures. The New York Post reported that in June, the Plaza Condominium filed a lien against Sahara for $2.73 million due, which included interest and late fees. Realtor Harry Macklowe, who lives at the Plaza Hotel, is also on the condominium board and signed the lien.

In the surprise upset, the Qatari government stepped in to buy the hotel. Reuters reported Qatar is diversifying its economy away from fossil fuels and into luxury properties. This follows the widely publicized boycott by its Middle Eastern neighbors. They accuse the country of supporting terrorism. Qatar denies the accusation, arguing the sanctions are politically motivated. In addition, The Real Deal reported that Qatar’s former prime minister owns more than $400 million of debt on the hotel.

Bloomberg had reported that Ashkenazy Acquisition and Kingdom Holdings had sued Sahara for not fulfilling their first right of refusal. The news outlet also wrote that United Capital Real Estate Development Corp., as yet another interested buyer, last month filed a lawsuit against Sahara and Roy. Bloomberg quoted the real estate firm’s attorney saying the deal with Katara cannot close because United Capital has the only valid, enforceable contract signed by Roy, himself. United Capital’s lawyer claims it’s unclear if Sahara’s US representatives had appropriate signing authority.

One more thing—Donald J. Trump once owned the Plaza Hotel but was forced to sell it in a 1992 bankruptcy.