Trump name is the game.
Despite being $3 million short of the highest bid, Trump's $115 million offer was enough to convince the current owners to sell him the property. Trump's willingness to put more cash into the deal before taking title to the property also helped to sweeten the pot.
Located at Park Avenue and 59th Street, the hotel was built in 1927. Over the past few months it has been the focus of a prolonged bidding war.
The pool of bidders, which according to Trump was 22 strong, included Aby Rosen and Michael Fuchs of RFR Realty and developers Izak Senbahar and Simon Elias.
Since money was clearly not the only issue, Trump's decision to inject a substantial amount of cash into the deal before taking title might have helped.
"This is a really great property. I'm not sure what it will eventually be, but it will definitely be a high-end something," said Donald Trump, president and CEO of the Trump Organization.
Still unsure about what he will re-name the building, Trump claims that adding his own last name to the property will add "40 to 50 percent" extra to the value of the building.
For one of the other bidders, the ceiling on his bid was exceeded.
"We were willing to bid $106 million, but that was the highest we could go," said developer Izak Senbahar.
Senbahar is developing the Grand Beekman, a luxury residential project, on the East Side.
At one point during the bidding war, Senbahar considered himself "the favorite."
Despite that Senbahar's bid lost, he is determined to keep his eyes open for any new hotel opportunities.
"We are always looking for good products," he said.
The current manager of the Delmonico is optimistic about the new owner.
"With (Trump's) presence, something really wonderful will happen here," said Joe Kaminski, the general manager of the Hotel Delmonico.
Sonnenblick-Goldman represented the seller, the estate of Sarah Korein, on the deal. The hotel has been controlled by Sarah Korein's daughter, Elysabeth Kleinhans, since 1991.
Kleinhans will reportedly convert the smaller building she owns adjacent to the hotel into a non-profit theater when the lease on Kaplan's Deli expires next April.
"Our job is to tell our client which buyer has the best odds of closing. Trump submitted the best bid," said Mark Gordon, managing director of Sonnenblick-Goldman's lodging group.
"There was some concern over his junk bond situation in Atlantic City," said Gordon. referring to the $90 million in interest payments that Trump has yet to pay.
Gordon said that Trump will probably keep the property "as is" for now, since he hasn't yet decided what he plans to do with it.
"Trump's name is very marketable. It will clearly be more profitable in the future," said hotel consultant John Fox, senior vice president of PKF Consulting.
"A trophy property with his name should play well with the overseas market," said Fox.
Another hotel source credited Trump's timing on the deal.
"The price is definitely lower now than it would have been a year ago. It's still a trophy price," said Tam McConnel, senior managing director of Insignia! ESG's lodging group.
The deal is expected to close early next year.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Donald Trump acquires Hotel Delmonico|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Dec 12, 2001|
|Previous Article:||John Cushman comes home.|
|Next Article:||City approves research facility for Memorial Sloan Kettering.|