The Plaza: An unmet potential
Can new owners breathe life into the iconic-but-underperforming hotel?
Since opening in 1907, the Plaza Hotel has served as the backdrop for movies, books and high-profile parties. In 1964, when a crowd of 4,000 screaming fans greeted the Beatles at John F. Kennedy International Airport for the band’s first American tour, the limos whisked them straight to the Plaza. The iconic property has, of course, also been a favorite for real estate investors. In the 1980s, Donald Trump, then a brash young developer and today the U.S. president, plunked down millions to buy the hotel. He ultimately handed over control of the property to his creditors in a complex deal to clear debt. But that was just a precursor to the problems the hotel has faced since. And while a significant chunk of the hotel has been converted into condos, the famous Oak Room has been dark since 2011, and the site is, by many accounts, underperforming. However, in late May, reports surfaced that Ashkenazy Acquisitions had bought a piece of Saudi Prince Al-Waleed bin Talal’s stake in the hotel with plans to buy out the web of stakeholders, including embattled Indian mogul Subrata Roy. Not surprisingly, all eyes will be watching as the duo tries to breathe new life into the 110-year-old institution.
The amount Roy reportedly wanted for his roughly 50 percent stake in the Plaza’s hotel portion, 100 of its hotel-condo rooms, and the retail last year when Al-Waleed and the Quatari government offered to buy him out. The duo, however, reportedly offered $550 million, $20 million less than the amount Roy paid in 2012.
The record price Russian composer Igor Krutoy paid in 2011 for a Plaza condo. But not all sellers have been as lucky. It took developer Christian Candy several years to find a buyer for his penthouse, which finally went into contract for $39 million last month, but only after a $20 million price chop.
The going price for a Plaza hotel room in 1907. Nowadays, a weekend stay runs between about $650 a night for a “deluxe room” and $2,100 for a penthouse suite. And the “Royal Suite” is currently asking a massive $40,000 a night.
The amount Trump paid for the Plaza in 1988. At the time, he took out an ad in New York Magazine conceding that the price was “not economic,” but predicting he’d still make money, a reality that never came to fruition. (Trump also married second wife Marla Maples there in 1993.)
The amount former Oak Room owners Eli and Jeffrey Gindi sometimes made on a Saturday afternoon with their raucous “Day and Night” parties, where table dancing was the norm. The party ended in 2011 when the Plaza’s then-owner sued them for breaching their lease.
The number of hotel rooms at the Plaza now — down from 800 when it opened. The Elad Group bought the property for $675 million in 2004. It converted it into 180 condos, 152 hotel-condos and 130 “oversized” hotel rooms before selling in 2012.
The number of movies that the Plaza has appeared in, including Alfred Hitchcock’s 1959 seminal thriller “North by Northwest” in which Cary Grant’s character is famously abducted during lunch in the Oak Bar. The hotel’s also played a role on the big screen in “Arthur,” “American Hustle,” “Almost Famous,” “Scent of a Woman,” “Sleepless in Seattle” and “Home Alone 2.”
The number of months Roy has spent in jail for failing to pay back the investors he allegedly defrauded. The mogul — who was released on parole in May 2016 — has until July 5 to come up with $110 million or go back to jail. That’s led to speculation that he’s looking to unload assets, including the Plaza, to raise cash.