Plaza is Israeli’s Latest New York Deal
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Many consider the best location in Manhattan to be the famed Plaza district overlooking Central Park. Last week, CPS One LLC, an affiliate of Elad Properties, entered into a contract to purchase the landmark Plaza Hotel at the corner of 59th Street and Central Park South. Elad, a privately owned company controlled by Israeli businessman Yitzhak Tshuva, agreed to pay $675 million for the 807-room hotel, or $836,431 a room. The sale includes the purchase of the adjoining property on Fifth Avenue and is expected to be completed by the end of the year.
The 19-story hotel first opened its doors on October 1, 1907. Construction took two years and cost $12 million in 1907. The Plaza was developed by financier Bernhard Beinecke, hotelier Fred Sterry, and Harry S. Black, the president of the Fuller Construction Company. Designated a New York City landmark in 1969, The Plaza is listed on the Register of Historic Places and is the only New York City hotel to be designated as a National Historic Landmark.
Elad is purchasing the hotel from the Plaza Operating Partners Ltd., a partnership of the British hotel group Millennium & Copthorne and Saudi Prince Alwaleeb bin Talal. Kwek Leng Beng, a property tycoon in Singapore, holds more than 52% of Millennium & Copthorne. The partnership purchased the hotel in August 1995 from an entity owned by Donald Trump for $325 million. Mr. Trump paid $390 million to buy the hotel in September 1998 from a partnership of the Aoki Company and Robert M. Bass. The partnership of Aoki and Mr. Bass purchased the property in February 1988, paying $350 million to the NY Westin Hotel Co.
The purchase price of $836,000 a room is the highest recorded price for a hotel room in New York. The previous highest recorded price was $756,579, which was paid by a partnership of Mr. Trump and General Electric, which bought the Delmonico Hotel for $115 million in November 2001.
Hotels in the district have been selling at record prices to be converted into luxury residential condominiums and cooperative apartments. As noted in a New York Sun article on June 24th, properties include the InterContinental Central Park South, St. Moritz, Delmonico, and the Mayflower on the Park.
“If you own a hotel in a prime location in Manhattan, it is a much better investment to convert the property into a luxury residential condominium,” said the president of Lodging Investment Advisors, Sean Hennessey.
The Sun has learned that the present owners of the Plaza had planned an $86 million renovation but that it has been put on hold. The Sun has also learned that the current owners and the buyers must coordinate an arrangement with the Hotel Workers Union for a planned conversion to residential.
At this time, it is uncertain when the new owner will convert the hotel into a luxury condominium development. Industry sources feel that at least the top 10 floors of the 19-story tower would be converted into residential, leaving at least 250 rooms for the hotel facility.
Few real estate industry leaders believe the new owners will continue to operate the property as a hotel with banquet facilities, considering the price per room, the history of posting operating losses for the past few years, and the fact that the new owners have a history of converting other properties.
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Elad Properties has been a very active real estate owner, developer, and investor in Manhattan and around the world. Since the mid-1990s it has acquired many properties for conversion into luxury residential condominium apartments.
In June 2002, the company purchased the former five-story headquarters of the Board of Jewish Education at 426 W. 58th St. Elad has added six floors to the century-old building, converting it into sixteen luxury apartments.
In July 2003, Elad purchased the former 96,000-square-foot loft office headquarters of the United Federation of Teachers at 49 E.21st St. in the Gramercy Park area. It is in the final stages of renovating and converting the property into 43 condominium residences.
The 11-story building at 21 Astor Place, located between Lafayette Street and Broadway, was built in 1892. The building once served as the home of the Mercantile Library; headquarters of a major local labor union; a telecom hotel, and as the home of numerous dot-com companies.
Brad Zackson acquired the property in 1992, and over the next 10 years, the property changed hands among at least five leading real estate investors. The property was then acquired by Ofer Yardeni of Stonehenge Partners, who then sold the building to Philip Pilevsky for $26 million. Mr. Pilevsky subsequently sold the property to Goldman Sachs for $36 million. In April of 2002, Elad purchased the property for $41.5 million. The property was converted into 51 residential condominiums. One of Manhattan’s highest-grossing Starbuck’s coffee shops is located on the ground floor of the property.
This May, Murray Hill Properties and Olympus Real Estate paid $111 million to purchase the 380,000-square-foot Gift Building at 225 Fifth Ave. In June, Elad joined as a majority equity partner, contributing $13 million. As noted in this column on June 20, it is likely that the new owners will convert the building into residential condomini ums in 2007, when the majority of leases in the building expire. According to the trade, Elad has announced they are planning to convert the building into 200 luxury condominium units.
Elad is in the process of converting an office building, which was built in 1906 and once housed a department store on the historic Ladies Mile district on Sixth Avenue. It is completing plans for the renovation of the landmark building at 655 Avenue of the Americas into 54 condominium apartments.
A few years ago Elad acquired the sites of two parking lots in the heart of Chelsea district. On these sites it built a total of 82 condominium apartments at 151 West 17th St. and 224 W. 18th St. On the Upper West Side, the company purchased land and built a 44-unit luxury condominium building at 160 W. 86th St.
In 2000 it purchased a rental apartment building at 65 E.96th St. and completed conversion in 2003 of 60 condominium units. It has also been responsible for the conversion of the former warehouse at 312 E. 22nd St. to a 26-unit condominium. It has also converted a 12-story building at 71 Murray St. into a luxury condominium building.
Miki Naftali heads American operations for the company. The man behind Elad is Israeli businessman Yitzhak Tshuva, the controlling shareholder of the Delek Group of Israel. Two weeks ago, Delek Group, a subsidiary of Delek Real Estate, traded on the Tel Aviv Stock Exchange, completed the acquisition of 87.5% of Dankner Investments for $58.5 million. The deal transferred the ownership of the Dankner family investment company to Mr. Tshuva’s company.
Last September, Mr. Tshuva was on the top 10 listing of the 100 most influential people in the Israeli economy, ranked by Marker Magazine, considered the leading business magazine in Israel.
The company has been active in North America. In June, the American subsidiary of the Delek Group announced it is in the process of acquiring 100 gas stations and convenience stores in Alabama.
During the 1990’s, Mr. Tshuva’s company acquired more than 6,000 apartments and office buildings in Toronto, Canada. This past March, it paid close to $700 million to purchase 73 apartment buildings in Toronto and two apartment buildings comprising the Olympic Village in Montreal. In May, the company increased its real estate holdings in Florida when it purchased the BellSouth headquarters in Jacksonville for $90 million. Also in May, it paid $43.5 million for the Miramar apartments and planned to convert the 300-unit apartment complex into condominiums.