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Once Owned by Trump, The Plaza Hotel Will Sell Once Again

CoStar Market Insights: Manhattan Hotel Valuations Continue to Rise
May 15, 2018
The iconic Plaza Hotel is expected to sell to Ashkenazy Acquisition Corp. and its acquisition partner, Saudi Prince al-Waleed bin Talal, at the end of the month.

The deal, subject to customary closing conditions, would value the Plaza Hotel at $600 million, or more than $2 million per room. The investors already own a partial interest in the hotel.

The last time the Plaza Hotel had full ownership was in 1988, when Donald Trump purchased the property in an auction for $407.5 million. In 1995, Millennium & Copthorne Hotels and Prince Al-Waleed bin Talal acquired the property for $325 million through a forced sale. The partners spent $65 million on improvements. Since then, multiple partial interest trades have been made between buyers.

Average occupancy across all New York City hotels was 83.9 percent in 2017. Additionally, the leisure and hospitality employment sector has been a main driver for growth this cycle in New York, growing by about 35 percent since 2010. Tourism has also significantly outperformed its historical average.

These are just a few factors that have driven the price of Manhattan’s hotels this cycle.

In 2010 and 2011, Manhattan hotels were trading for about $400,000 per room; however, today the average is closer to $1.5 million per room. If the deal closes as expected, it would further boost valuations across the sector.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.

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