No Deposit, No Deal: Pierre Hotel Sale Called Off
The $2 billion sale of the Pierre Hotel is no more after the buyer failed to pay the required $100 million deposit.
Brunei-owned Dorchester Collection and Saudi businessperson Motasem Khashoggi were trying to purchase the historic property, but missed a deadline at the beginning of last month to produce the deposit. After missing an extension at the end of the day Tuesday, the co-op board called it off, the New York Times reported.
In comments on Wednesday night from Saudi Arabia, Khashoggi said he was “extremely disappointed” in the board’s decision, claiming he had the funds but was being delayed by the bank from a wire transfer. He added that he did not walk away from the deal.
“After this termination, [the shareholders] have their building, which I’m sure they know the condition of, and I have my money,” Khashoggi said. “So I don’t know who’s the bigger loser here.”
Fashion designer Tory Burch and fellow peeved residents filed suit to stop what they claimed was a secretive and coercive sale of the Fifth Avenue property that could result in their eviction. The complaint accused the co-op board of striking an agreement with an unidentified LLC allegedly tied to the Khashoggi family.
The New York Supreme Court judge dismissed the case and ruled the lawsuit was no longer relevant because one of the biggest claims — a lack of transparency from the building’s board — had been alleviated.
But the sale process and its connection to penthouse owner and U.S. Commerce Secretary Howard Lutnick continued to serve as a source of consternation for residents of the building. Lutnick declined to comment on the scuttled deal.
The Pierre has struggled to adapt to modern times, making an infusion of capital intriguing. Maintenance and service are reportedly deteriorating, resulting in fraying carpets and spotty staffing.
But as part of the sale, all of the residents would have been forced to leave and the staff who tend to the property would be let go. Khashoggi claims residents would’ve received above-market value for their units, a year to move and the ability to come back at a discounted rate following a $1 billion renovation.
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