Shocking arrest of Saudi prince complicates Plaza sale
As if the intrigue-ridden struggle to sell the Plaza Hotel needed more drama, the shocking arrest of minority partner Prince Alwaleed bin Talal in Saudi Arabia came just as the iconic hotel’s India-based majority owner seemed close to choosing a buyer.
Plaza majority owner Sahara India Pariwar “could make a decision this week” on a suitor, said JLL international director Jeffrey Davis, who heads the New York office of JLL’s Hotels & Hospitality Group.
The Post reported last May that Alwaleed, who owned 25 percent of the Plaza, had teamed up with New York billionaire real estate investor Ben Ashkenazy to try to buy the 75 percent interest controlled by Sahara.
It couldn’t be learned Monday night whether the 50-50 Prince-Ashkenazy partnership — the two men now jointly own the 25 percent stake — was among the bidders.
Legally embattled conglomerate Sahara has tried repeatedly over the past three years to unload the Plaza, but Indian courts blocked sale offerings.
Sahara founder Subrata Roy has been in and out of Indian prisons over fraud and securities charges. Although he’s now free, Roy is still duking it out with prosecutors and government agencies.
Sahara tapped JLL to field offers for the hotel last summer. But the Plaza plot deepened over the weekend with Alwaleed’s arrest as part of a corruption probe by Saudi Crown Prince Mohammed bin Salman.
Davis insisted, “Nothing changes. While I don’t think anyone knows what’s really happening in Saudi Arabia, I wouldn’t relate it to the Plaza. Linking it to anything the prince owns here would be creating fake news.”
Davis said Ashkenazy, not Alwaleed’s Kingdom Holdings, has “decision-making rights” regarding the partners’ Plaza involvement. “The way it’s structured, Ashkenazy has what’s basically a right of first refusal” on any outside offers for Sahara’s interest.
“If there’s a bona fide offer, he [Ashkenazy] has a certain length of time to match it” if he wants to, Davis said.
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That surprised Lodging Investment Advisors CEO Sean Hennessey, a hotel industry analyst and consultant who is not involved at the Plaza. “It would be highly unusual in a partnership like that for one side to have unilateral decision-making over such major matters,” he said.
Hennessey said Alwaleed’s arrest might give a buyer pause. “They’d have to be prepared to enter into an ownership enterprise where one minority owner is in jail,” he said of the prince, who’s actually being held at a Ritz-Carlton hotel in Riyadh.
It’s unclear how much a Plaza sale might fetch. Hennessey said, “Originally I would have expected over $1.5 million a key.” But now, in a limping hotel market, “something south of that.” The high-water mark for Manhattan luxury hotel sales was $2 million a key for the Baccarat in 2015.
The “Plaza Hotel” that’s for sale isn’t the whole landmark building, much of which was converted to luxury condo apartments. Rather, it includes 132 hotel guest rooms, 100 condo units that can be used as hotel rooms, and retail and food-and-beverage spaces. (The condo-hotel units aren’t to be confused with permanent condo residences.)
Alwaleed is said to be unhappy about the Plaza’s long-vacant restaurant and retail spaces. While the Palm Court and Todd English Food Hall seem to be thriving, the Oak Room and Oak Bar have been dark for years except for private events. The Fifth Avenue entrance lobby has looked forlorn since Italian designer Angelo Galasso closed his store in the Edwardian Room, which is also vacant.