Shahal Khan, Kamran Hakim in contract to buy Plaza Hotel for $600M: sources

Seller Sahara may consider lower bids from Ashkenazy for famed property

Subrata Roy, Shahal Khan and the Plaza Hotel
Subrata Roy, Shahal Khan and the Plaza Hotel

A group of investors including Shahal Khan’s Chimera Group and the Hakim Organization is in hard contract to buy the Plaza Hotel from Subrata Roy’s Sahara Group for about $600 million, The Real Deal has learned.

The prospective buyers have seven weeks to close the deal, sources close to the buyers said. During that period, Sahara may consider a lower bid from one of the current minority owners, Ashkenazy Acquisition Corporation.

Although initial reports suggested Khan planned to fund the acquisition with the help of a cryptocurrency initial coin offering (ICO), sources said the deal is being put together with equity from Khan, Hakim and other investors, as well as a loan from David and Simon Reuben, the Mumbai-born British billionaires. The Reuben brothers previously bought the note on the Plaza from Sahara in 2015.

The saga of the Plaza has become increasingly more convoluted in recent years. Roy has been embroiled in legal troubles at home, and his international property empire went up for sale while he is negotiating with the Indian government to repay the billions of dollars it says he owes. In 2017, the former prime minister of Qatar, Sheikh Hamad bin Jassim bin Jaber Al Thani (HBJ), acquired the mortgage on the property, stirring talk that the Qatari billionaire was interested in taking Sahara’s majority stake for himself.

“There were higher bids,” Sahara’s head of finance Sandeep Wadhwa said in November of HBJ’s deal. But Al Thani provided “a solution that no other transaction in isolation was giving us.”

Meanwhile, Prince Al-Waleed bin Talal of Saudi Arabia, who had previously planned to buy the majority stake with Ashkenazy, was detained last year for several months at the Riyadh Ritz Carlton, after getting swept up in Saudi crown prince Mohammed bin Salman’s “anti-corruption” campaign.

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On Thursday, the Wall Street Journal reported that the Plaza has been “virtually closed” all week due to a labor dispute that has recently escalated, with union workers at the Plaza raising health and safety concerns with the hotel’s manager, Fairmont.

Khan declined to comment. Hakim Organization head Kamran Hakim, an attorney for Roy, and Ben Ashkenazy did not immediately respond to requests for comment.

Khan, the founder of Chimera Group and Dubai-based investment company White City Ventures has been trying to buy the Plaza for several years now. Hakim, a frequent partner of Kevin Maloney’s Property Markets Group, is developing a commercial building on a vacant Gowanus lot  and is trying to sell the 44-story Long Island City rental tower 1 QPS.

JLL’s Jeffrey Davis has been marketing the Plaza to potential buyers. He was not immediately available for comment.

Since opening in 1907, owners of the 19-story, 282-key hotel near Central Park have included the New York Life Insurance Company, hotel magnate Conrad Hilton and Donald Trump, who sold the Manhattan trophy property while going through a business bankruptcy in the early 1990s. The Elad Group bought it in 2004 for $675 million and carried out a major overhaul, adding a residential condominium component.