Plaza Hotel Up for Sale: Banks Retain Real-Estate Brokerage to Assess Purchase Offers

Strategic Insights -

The iconic Plaza Hotel, a flagship property in Donald Trump's real estate empire, is up for sale after a bank group led by Citibank retained a leading real-estate brokerage to assess purchase offers. The hotel, valued at $409 million when Trump acquired it in 1988, may fetch a lower price of $350 million or less in the current market, according to real estate professionals. The sale is a result of a settlement agreement reached in 1992, where Trump's bankruptcy plan gave banks 49% ownership of the hotel. Trump retains 51% ownership, but there is doubt among his organization about the banks' ability to force him to sell his controlling share.

Key Takeaways:

  • The Plaza Hotel, a flagship property in Donald Trump's real estate empire, is up for sale after a bank group led by Citibank retained a real-estate brokerage to assess purchase offers.
  • The hotel was valued at $409 million when Trump acquired it in 1988 with mortgages totaling $425 million.
  • The sale is a result of a settlement agreement reached in 1992, where Trump's bankruptcy plan gave banks 49% ownership of the hotel while Trump retained 51%.
  • The current market value of the Plaza Hotel may be lower than its original price, with estimates ranging from $350 million to less than that.
  • Real estate professionals consider the current hotel market to be lower than when Trump acquired the Plaza in 1988.
  • The banks have the right to sell the Plaza for a minimum specified price, but there is doubt among Trump's organization about the banks' ability to force him to sell his controlling share.
  • The Plaza Hotel has been the scene of Trump's recent wedding to Marla Maples.

Statistics:

  • The Plaza Hotel was valued at $409 million when Donald Trump bought it in 1988.
  • The hotel has mortgages totaling $425 million.
  • The current market value of the Plaza Hotel may be $350 million or less.
  • 49% of the Plaza Hotel's ownership is held by banks, while Donald Trump retains 51%.
  • The sale of the Plaza Hotel is the result of a settlement agreement reached in 1992.
  • The hotel was acquired by Robert Bass Group in Fort Worth, Texas, before being bought by Trump in 1988.

Sources:

  • "NEW YORK A leading real-estate brokerage has been retained by a bank group to assess purchase offers for the Plaza Hotel..."

- [Source: REUTERS, [no date]]

  • "The cat's out of the bag,' Pariser said. 'Yes, we've been retained by the banks but I can't comment on it at all, as to how many offers have been made or how much.'"

- [Source: REUTERS, [no date]]

  • "Trump bought the Plaza from the Robert Bass Group in Fort Worth, Texas, in 1988 for $409 million with mortgages totaling $425 million."

- [Source: REUTERS, [no date]]

  • "When the hotel's cash flow failed to meet debt service, Trump restructured its debts in a bankruptcy plan that gave the banks 49 percent ownership with Trump retaining 51 percent."

- [Source: REUTERS, [no date]]

  • "The market for hotels has fallen since Trump bought the Plaza and may bring only $350 million or even less in the current market, according to real estate professionals."

- [Source: REUTERS, [no date]]