The sale of New York City’s Plaza Hotel may finally come to fruition. Investors Shahal Khan, founder of the Dubai-based family office White City Venture, and the Hakim Organization have reportedly reached a deal to purchase the property from the Sahara Group for $600 million, if all goes well.
The deal is expected to close on June 25, but this transaction is part of a long sequence of agreements that have fallen through over the years.
Part of the complications surrounding the 282-room property is that a partnership between real-estate firm Ashkenazy Acquisition Corporation and Kingdom Holdings owns a 25-percent stake in the property, and they retain the right of first refusal to buy the hotel at the same valuation on offer. However, Sandeep Wadhwa, head of corporate finance at the Sahara Group and owner of 70 percent of the Plaza Hotel, has agreed to the terms of the deal. The remaining 5 percent of the property is retained by Sant Singh Chatwal, founder of the Dream Hotel Group.
The Plaza Hotel was opened in 1907, and its owners have included current President Donald Trump, who acquired it from Westin Hotels in 1988 for $390 million before selling it as a prepackaged bankruptcy in 1992. India’s Sahara Group purchased the Plaza in 2012 for $570 million, but the company announced plans to sell it and two other properties—New York's Dream Downtown and London’s Grosvenor House—in 2015 to pay for Sahara chairman Subrata Roy’s bail after he was jailed in 2014 for failing to repay bondholders.
Since then, numerous suitors courting the Plaza have come and gone as deal after deal fell through. An auction to sell the property was delayed in March of 2016, then canceled. Later that year an unidentified member of the Saudi royal family offered $352 million for the hotel, but this deal also never materialized. Texas’ MG Capital also attempted to bid $550 million for the Plaza in 2017 before backing out.
The recent $600-million proposal includes the refinancing of the hotel’s mortgage, now in excess of $410 million. In 2017, the Sahara Group hired brokerage firm Jones Lang LaSalle to auction the property, and the current bidders have already made a $30-million deposit they would be forced to forfeit if this deal also falls through.
Adding to the optimism that Sahara might finally part ways with the Plaza is Khan’s past efforts to acquire the hotel. The Real Deal reported that Khan initially planned to fund the purchase using cryptocurrencies, but this proved to be false. At this time, Khan and Hakim have not responded to Hotel Management's requests to comment on the deal.