Musallam Family Takes Prince de Galles
By Jeff Weinstein, Editor in Chief -- Hotels, 11/30/2008 11:00:00 PM
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Hotel Prince de Galles, Paris. |
In one of the very few significant single-property deals of the last quarter, MH Limited Partnership, Riyadh, in late September bought the freehold of Hotel Prince de Galles, Paris, in a transaction valued at €141 million.
The Saudi-based Musallam family has owned the leasehold on the property for 16 years and now as the outright owner plans to spend a further €80 million on the refurbishment of the Starwood Luxury Collection hotel located adjacent to the famed George V in the 8th District.
A tender offer launched by Société de Valorisation Foncière et Immobilière was executed by Atisreal Hotels. “The sale of Hotel Prince de Galles represents the most prestigious transaction of the year in the French market and confirms that Paris’ hotels are still in high demand by investors,” says Patrick Sanville, director of Atisreal Hotels.
Sanville says the sale was concluded very swiftly. “It took only seven weeks to reach an agreement,” he says. “Everything was very well prepared and the process was conducted in a timely manner.”
Molinaro Koger, Washington, D.C., arranged the financing for this deal. Ed Blum, Molinaro’s managing director of Capital Markets Group, says, “It is reassuring to know that despite the present turmoil in the markets, primary assets located in areas such as Paris’ Golden Triangle can still secure premium prices and that financing for these assets is still available.”
Sanville called the pricing fair market value, considering the background and the incumberence. He adds that the Middle Eastern investors are more present than ever but for this hotel there were bidders from many sources, including American investors. “At least some deals are getting done in France. Negotiations are tough, but the market is not dead,” Sanville says.
Adds Blum: “Lenders are looking for good assets, good historical performance and good sponsorship. Now, again, they care about who they lend to. Words coming back into fashion are 'ammoritization on debt,’ and in some cases, 'recourse.’ Deals that make sense are getting done.”
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