By Keith Loria, Contributing Editor
?The seller had finished off a positioning of the property and had just finished off a retail level on the lower level,? Greg Rice, Solid Rock?s president, told?Commercial Property Executive?. ?With that being successfully completed, they thought it was time to sell. Capital is more widely available for buyers now, and sellers are making strategic decisions to bring their assets to market in this favorable environment.?
Solid Rock Advisors, a real estate consulting firm specializing in luxury resort and hotel transactions, advised the seller in the transaction.
Sahara India Pariwar, an India-based conglomerate, has acquired 75 percent interest in Plaza Hotel New York from real estate company El Ad US Holdings? position in the hotel with a total valuation of $575 million.
Located on the corner of 59th?Street and Fifth Avenue, adjacent to Central Park in Manhattan, the Plaza Hotel has a rich history that includes such notable guests as Eleanor Roosevelt, the Beatles, Mark Twain and Groucho Marx.
?It?s an iconic recognized property worldwide with obviously an unmatched Manhattan location,? Greg Rice, Solid Rock?s president, told Commercial Property Executive. ?Besides those key attributes, it gives the buyer a good profile here in the U.S., and at the same time, a property like this can enjoy a higher rate of appreciation.?
The other 25 percent of the property remains in the hands of co-owner Kingdom Holding Co., controlled by Saudi billionaire Prince Alwaleed bin Talal.
The acquisition includes 230 hotel rooms, retail space, condominiums and a subterranean luxury mall.
From the buyer?s perspective, Rice said, they saw the New York hotel market as one of the world?s most liquid markets, excellent for capital preservation as it consistently outperforms inflation.
?In New York, you get accelerated value if you own property for the long term and I think that?s what this group was looking for,? Rice said. ?This was a great opportunity for the buyer to expand into a key U.S. gateway market with the purchase of such an irreplaceable asset as the Plaza Hotel.?
The new buyers are already planning some upgrades and changes; the most immediate being the re-opening of the legendary The Oak Room.
?I think they have some very exciting things in mind for the property,? Rice said. ?This is arguably one of the world?s most valuable pieces of real estate and I think they are looking to it as a long-term investment.?
The Sahara group also owns the historic London hotel Grosvenor House and a high-end hotel in Mumbai.
Fairmont Hotels & Resorts will continue to operate the hotel under a long-term agreement.
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