The Plaza Hotel, long a symbol of luxury and grandeur in New York and more recently the crown jewel in Donald J. Trump's shaky business empire, is being sold to two of the world's richest men: a Saudi Arabian prince and one of Singapore's leading entrepreneurs.
The buyers said on Tuesday that the deal put a value of $325 million on the landmark hotel at 59th Street and Fifth Avenue near Central Park.In essence, the buyers are taking over the Plaza by assuming most of its debts. None of the money from the deal will go to Trump. Rather, it will go to banks in the United States that had lent money to Trump and to banks in Japan that hold a mortgage on the hotel property.
Trump paid about $400 million for the hotel in 1988. While he will retain a say in the hotel's operations as a minority partner, his surrender of control is a defeat for the real estate and casino developer who in the heady days of the late 1980s proclaimed the Plaza "the ultimate trophy in the world."
The complexity of the sale announced on Tuesday, and the international scope of the transaction, illustrated how the arenas of real estate and finance have grown beyond national boundaries and how the business world has shrunk in ways even the most visionary people could have hardly imagined when the Plaza opened in 1907.
The sale, rumored for weeks, was announced in Singapore by CDL Hotels International Ltd., the hotel arm of the Hong Leong Group. CDL Hotels, which owns 35 hotels around the word, including two in New York, said it had formed a joint venture with an entity controlled by Prince Walid bin Talal, 40, a nephew of King Fahd of Saudi Arabia who has been buying into the luxury hotel business.