Istithmar buys $340m share of luxurious Mandarin Oriental.

Istithmar Hotels continues to push the envelope for luxury hotel sales in Manhattan. Just months after snatching up the W Union Square Hotel for $235 million, the Dubai-based company is negotiating a deal to buy a $340 million chunk of the Mandarin Oriental on Columbus Circle.

Istithmar will buy a 73% share in the luxury hotel at the Related Companies' Time Warner Center from the Mandarin Oriental Hotel Group.

The sale sets the average room cost at $1.37 million, a big hike compared to the $1 million average room cost of W Union Square.

"Mandarin Oriental Hotel Group is delighted by the performance of the hotel so far and we are looking forward to working closely with our new partner on the future success of the property," said Edouard Ettedgui, chief executive of Mandarin Oriental Hotel Group.

To complete the transaction, Mandarin Oriental New York Inc, an entity of Mandarin Oriental New York, Inc., reduced its interest in the 248-room hotel from 50% to 25%. Simultaneously, the Group's partners in the hotel, Apollo Real Estate and Related Companies, sold the majority of their equity to Istithmar Columbus Centre Holding Co. LLC, and will retain a small stake in the hotel.

Mandarin Oriental, New York will continue to manage the hotel under a long-term contract. Completion of the deal is anticipated for February, according to a statement from the hotel. It was the second major hotel sale in the city over the holidays and the latest in a prolonged period of hotel investment in the city.

Sunstone Hotel Investors, Inc. entered into a joint venture with Whitehall Street Global Real Estate Limited Partnership to purchase for $68.5 million the Doubletree Guest Suites Hotel above the old Palace Theatre in Times Square. Hilton Hotels Corporation will retain management of the property. Sunstone Hotel Investors Inc is the real estate investment trust that purchased the Hilton Times Square earlier this month.