Qatar fund acquires Park Lane hotel for $622.9M in Midtown West

Qatar Investment Authority through the entity Central Acquisition Co LLC paid $622.9 million to the Abu Dhabi sovereign fund Mubadala Investment Company through the entity Symphony Cp (Park Lane) LLC for the Park Lane New York hotel building (H1) at 36 Central Park South in Midtown West, Manhattan. The sale is an entity level exchange, not a deed transfer.

It is not clear if Witkoff still owned a portion of the property before the sale or if it retains a stake after the sale.

The hotel has been tied up in the U.S. government’s case against alleged money launderer Jho Low. 
The sale closed on August 17, 2023 and was recorded on August 25, 2023. The property has 442,000 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,409 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Qatar Investment Authority was John Nolan Haynes. In November 2013, Witkoff owning 15 percent and a Jho Low trust owning 85 percent, paid $654 million for the Park Lane, intending to develop it into luxury condos and a hotel.

In December 2013, Jho Low’s trust sold 45 percent of its 85 percent stake, or 38.5% of the entire project to Mubadala Investment Company, controlled by the government of Abu Dhabi.

By December 2015, in a planned series of transactions, Jho Low’s trust added capital and Mubadala’s interest fell to 23.3 percent.

Then in starting in May 2016, Mubadala began making capital contributions since Jho Low was defaulting on its capital calls. Mubadala’s stake grew to 46.9 percent by September 2018.

Mubadala paid the United States Department of Justice $139.6 million for Jho Low’s 38 percent stake, in a deal that closed on December 7, 2018.

The case is United States of America v. All Right to and Interest in Symphony CP Park Lane LLC 2:2016cv05370

According to the amended complaint, “In materials that LOW submitted to entities with whom he sought to do business, including materials described in Paragraphs 609-611 below, LOW represented that his family was a significant source of his wealth. By passing money through his father’s account for a brief period of time, LOW created the appearance that funds in his personal account, which were used to acquire an interest in the Park Lane Partnership, came from his father rather than from Dragon Market, Granton, and Tanore…. In December 2013, Mubadala agreed to purchase a partial interest in the LOW Investment Entities, and thereby in the Park Lane Partnership, in exchange for $135,000,000…On October 16, 2013, a Principal at Witkoff who worked on the Partnership deal sent an email to LOW and Szen stating in relevant part: We are getting down to the end with the lender, they are asking for specifics on where the money on your side of the deal is coming from given it is international money . . ., can you please provide specifics to me so I can forward it to the lender. LOW responded the same day: “Low Family Capital built from our Grandparents, down to the third generation now.” In reply, the Witkoff Principal wrote: “Ok, thanks Jho, just didn’t know if there were any other minority investors on your side, I will let the bank know.” LOW confirmed in response, in relevant part: “Just all the family.” In February 2017, The Wall Street Journal reported that the U.S. District Judge in Los Angeles ruled the sale could go ahead, but the story did not mention Qatar.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Qatar Investment Authority had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Witkoff purchased four properties in three transactions for a total of $404.6 million and sold three properties in three transactions for a total of $25.2 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Steven Witkoff, head officer and James Stomber, officer. The business entities are Highgate Hotels and Symphony Cp (Park Lane) Owner Llc.

The property

The hotel building in Midtown West has 442,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 127 feet and is 200 feet deep with a total lot size of 20,275 square feet. The lot is irregular. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $124.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $1,250 in ECB penalties and $3,700 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 4th highest sale turnover among other neighborhoods in the city with $2.7 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 17.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On the tax block of 36 Central Park South, PincusCo has identified the owners of one of the five commercial properties representing 269,346 square feet of the 771,047 square feet. The identified owner is Atco Properties & Management.
There are no active new building construction projects on this tax block.

The majority, or 57 percent of the 771,047 square feet of built space are hotel buildings, with elevator buildings next occupying 43 percent of the space.

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