New York's Plaza Hotel Said Up for Sale in Foreclosure Auction
New York’s Plaza Hotel is poised to go on the auction block next month, potentially ending two years of uncertainty over ownership of the storied property off Central Park.
Billionaire brothers David and Simon Reuben hold the mortgage on the five-star hotel and have scheduled a foreclosure auction for April 26, according to a person with knowledge of the matter, who asked not to be named because the sale hasn’t been made public yet. The Reubens bought the loan from Bank of China Ltd. after a de fault by the property’s current majority owner, Sahara India Pariwar, last year. Sahara is controlled by Subrata Roy, who was imprisoned in India in early 2014 for defrauding investors.
The chateau-like Plaza, located at the corner of Fifth Avenue and Central Park South, has changed ownership many times over its 109-year history. Presidential candidate Donald Trump bought the Plaza in 1988 and married his second wife, Marla Maples, there. Trump sold it to a group including Prince Alwaleed bin-Talal of Saudi Arabia, who then sold it to Israel’s Elad Group, which converted some of the hotel rooms to condominiums. Bin-Talal retains a minority stake in the Plaza, as does an entity tied to hotelier Sant Singh Chatwal.
For sale are the Plaza’s hotel rooms, its restaurants and retail space, according to the person with knowledge of the matter. It’s being sold in a package with the Dream Downtown hotel, a trendy property in Manhattan’s Chelsea neighborhood that is located one block from the elevated High Line park, the person said.
The two hotels serve as collateral for the Bank of China loan and are cross-collateralized with the Grosvenor House hotel in London. The Dream hotel is owned by Sahara’s Roy and Chatwal. The combined mortgages for the New York properties total about $500 million, the person with knowledge of the matter said.
Alexander Bushaev, a spokesman for the Reuben Brothers, declined to comment on the foreclosure auction. Calls and emails to representatives of Roy and Alwaleed sent after regular business hours in India and Saudi Arabia weren’t immediately returned.
The Plaza sale comes at a time of strong investor interest in trophy real estate. China’s Anbang Insurance Group Co. last year paid $1.95 billion for Manhattan’s landmark Waldorf Astoria hotel, and this month agreed to buy Strategic Hotels & Resorts Inc., an owner of luxury properties, for about $6.5 billion, according to people with knowledge of the matter. It also has made a surprise $12.9 billion bid for Starwood Hotels & Resorts Worldwide Inc.
News by Bloomberg, edited by Hospitality Ireland