The Real Deal New York

Plaza Hotel to hit the auction block

Reuben brothers hold $500M mortgage for iconic building, Dream hotel

March 17, 2016 09:38AM

The Plaza Hotel on Central Park South (Inset from left: Simon and David Reuben)

Billionaire brothers David and Simon Reuben are reportedly foreclosing on the Plaza Hotel, with plans to hold an auction for the legendary property next month.

The Monaco-based Reubens paid $800 million for debt on three properties, which included the five-star hotel in Midtown, from Bank of China last year after the hotel’s current majority owner, Subrata Roy’s Sahara India Pariwar, defaulted. Sahara also owns the Dream Downtown in Chelsea and the Grosvenor House in London.

The Plaza’s hotel rooms, its restaurants and retail space are for sale, sources told Bloomberg. The Dream Downtown hotel is also part of the package.

Both the Plaza and the Dream are collateral for the Bank of China loan and the combined mortgages is around $500 million, sources told Bloomberg.

Subrata Roy, the founder of Sahara, is being held on $1.6 billion bail after the Indian government alleged unpaid debts of around $6 billion to company bondholders. Sahara attempted to sell the hotels in the past to raise money to release Roy.

Ownership of the iconic hotel has changed hands many times, with current GOP frontrunner Donald Trump buying the Plaza in 1988. Trump sold it seven years later to Troy Richard Campbell for $325 million. Campbell sold it for $675 million to the Elad Group, who converted the property into high-end condominiums.

Chinese insurer Anbang Group, which bought the Waldorf Astoria last year, recently made offers totaling $19B for two large U.S. hotel portfolios, acquiring Strategic Hotels & Resorts for $6.5B from the Blackstone Group, and bidding nearly $13 billion for Starwood Hotels & Resorts. [Bloomberg]Dusica Sue Malesevic