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NEW YORK CITY-According to talk in late September, Chicago-based Strategic Hotel Capital was close to a purchase of Osaka, Japan-based Rihga Royal Hotel Group’s W. 54th Street hotel. The company had reportedly signed a letter of intent for the property and the deal was rumored to be just about in the bag. Now, it seems, Strategic has pulled out of the due diligence process.

Strategic was apparently prepared to pay $220 million for the 500-room luxury hotel. The hotel’s most expensive rooms have rates up to more than $3,000 a night. The Rihga is 54 stories high and is located between Seventh and Sixth Avenues.

The sale price for the deal with Strategic would have spelled a $10-million loss for the hotel’s owners. Rihga Royal Hotel Group purchased the property in 1989 for $230 million. The Rihga would have brought Strategic’s total hotel room inventory to 1,240 rooms in Manhattan. It currently owns the Essex House on Central Park South and the Marriott East Side on Lexington Avenue.

Spokespeople for neither Strategic nor Rihga were available for comment by press time.

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