Indian Conglomerate Buys New York's Historic Plaza Hotel
The storied Plaza Hotel in New York is the latest buy for Sahara India Pariwar of Lucknow. The Plaza, whose first guest in 1907 was Alfred Gwynne Vanderbilt, heir to the Vanderbilt industrial empire, has been struggling in recent years after a conversion into condominiums.
It took nearly seven years to convert the units, and buyers — who spent as much as $50 million on their homes — complained about the quality of the renovations.
But on Monday, the Plaza's owner, Elad Properties, a real estate company owned by the Israeli businessman Yitzhak Tshuva, said the Sahara group had agreed to buy a controlling stake in the property for $570 million. Elad has a 60 percent stake in the hotel, and Saudi Arabia's Kingdom Holdings owns the rest. Once the deal is completed, Kingdom Holdings' stake will be reduced to 25 percent. The hotel will continue to be managed by Fairmont Hotels & Resorts.
Financial analysts said the hotel should be viewed as more than a “trophy asset.”
“I think it is a well-thought-out business decision,” said Praveen Chakravarty of AnandRathi Financial Services. “Looking at the hospitality market in Europe and the United States and the valuations available, it makes sense for anyone with liquid cash to spare to pick up assets, be patient, do some cross synergies and wait for the market to rejuvenate.”
The Sahara group is cash-rich, he added, and the deal is not expected to harm the company's finances.
Via | Elite.
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