$2 billion bid for New York's Pierre collapses over missed deposit
Saudi investor Motasem Khashoggi said his $100 million deposit was held up at a bank; the co-op board told shareholders the agreement was terminated.
By The Carnegie Standard Staff
· 1 min read
A $2 billion plan to buy The Pierre, the century-old building on New York's Fifth Avenue, collapsed on October 13 after Saudi investor Motasem Khashoggi failed to pay a $100 million deposit by the deadline, The New York Times reported.
Khashoggi's company, Sabre Park Avenue, had proposed spending $1 billion on renovations and turning the building over to Dorchester Collection, the luxury hotel group owned by Brunei's Sultan Hassanal Bolkiah. The plan required residents to sell their apartments and move out. In an interview on October 14, Khashoggi said the money was ready but his deposit had been tied up at a bank for weeks. The building's management sent a notice ending the agreement to his lawyer on the evening of October 13.
U.S. Commerce Secretary Howard Lutnick, who paid $44 million in 2017 for a penthouse spanning floors 41 to 43, backed the sale and stood to make a $60 million profit, according to the report. Newmark Real Estate Group, formerly led by Lutnick and now run by his two sons, was in line for $30 million in advisory fees.
The bid, which drew opposition from residents including Art Garfunkel and Tory Burch, also put more than 400 jobs at risk. Board chairmen Michael Stern and David G. Johnson informed shareholders of the termination on October 14 and said repairs would proceed, with negotiations continuing with current manager Taj Hotels Group. Engineering studies cited water leaks, rusted pipes and an outdated fire suppression system.
This story was first reported by Vietnam.vn.
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