Qatari fund closes on $600M Plaza Hotel buy

Posted On Thu, July 5, 2018 By

Posted On Thu, July 5, 2018 By In Central Park South

Photo via Wally Gobetz/Flickr

In May, the minority owners of the iconic Plaza Hotel, Ashkenazy Acquisition Corporation and Saudi Prince Alwaleed bin Talal, went into contract on the landmarked building, matching the $600 million offer made earlier in the month by a separate group of investors. However, reports out today tell us that the deal closed on Monday, with Katara Hospitality, a subsidiary of Qatar’s sovereign wealth fund, buying the minority owners’ 25 percent stake, along with Indian business group Sahara’s 70 percent stake and hotelier Sant Singh Chatwal’s five percent stake. Katara is the Qatar Investment Authority’s hotel division and this is their first foray into the NYC market. According to sources referenced by The Real Deal, the minority group decided to drop its bid because Katara offered greater “certainty” of closing.

The Sahara Group purchased their $570 million 70-percent share in 2012, but over the years, the company’s chairman Subrata Roy has been dealing with legal issues, serving two years in jail over a bond sale and being ordered to repay billions of dollars to the government. The minority owners faced similar legal troubles. As 6sqft explained, “Prince Al-Waleed previously planned to buy the majority stake with Ashkenazy but was detained by the government in November during Saudi crown prince Mohammed bin Salman’s crackdown on corruption. He was released in January.”

Adding to the scandal was the fact that Qatar’s former Prime Minister, Hassim Bin Jabber Al-Thani (aka HBJ), “owned more than $400 million of debt on the hotel that was set to mature, which likely tipped the scales in favor of the Qatari investment group,” according to The Real Deal.

The minority owners’ bid was a match for that from a group of investors including Shahal Kahan of White City Ventures and Kamran Hakim of the Hakim Organization, who had a $415 million loan from a pair of British billionaires, David and Simon Reuben. But as the Post explains, “Kingdom and Ashkenazy filed a lawsuit in a New York state court to force Sahara and Chatwal to sell its stake to them under the agreement. The other group recently sued Sahara to close its own deal.”

Donald Trump took ownership of the Plaza in 1988, but ultimately had to sell it as part of a bankruptcy proceeding. The President is now a sharp critic of Qatar and its alleged ties to terrorism. Over the past decade, the incredibly rich Gulf state established a $300 billion+ sovereign wealth fund with its income from gas and oil exports (it’s the world’s largest exporter of liquefied natural gas). They’ve been using it in part to purchase Western hotels and luxury properties, including the Savoy and the Connaught in London.

[Via Reuters, TRD, and NYP]

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