The Pierre Sale to the Khashoggis Falls Through

The Pierre will remain rundown (for now at least) but also in the hands of its shareholders. Photo: Wikimedia Commons After a bitter two-year fight that pitted high-profile residents of the Pierre against one another, a controversial deal to sell the storied hotel and co-op on Fifth Avenue to a prominent Saudi family for $2 billion is dead, the New York Times reports. In the end, the defeat of the deal between the Khashoggis and the co-op didn’t come down to a board vote but a $100 million deposit that never materialized. While the sale would have provided a windfall for most of the co-op owners, netting them far more money than they could get on the market, everyone would have had to sell — a distinctly unappealing prospect to those who were in their 70s or 80s or had sunk millions into custom renovations. The failed sale leaves the hotel under the management of Taj Hotels and allows everyone to remain, but the situation that prompted the board to explore a sale remains unaddressed: The Pierre desperately needs repairs. The once grand building, where celebrities and socialites have slept, lived, and partied for decades, is undeniably shabby, with worn carpets and crumbling plumbing. As the Times reported, “Engineering studies have found that water leaks are penetrating its apartments and infrastructure, its pipes are old and corroded, and its fire safety systems are antiquated and potentially dangerous.” Opponents of the deal, which include fashion designer Tory Burch, musician Art Garfunkel, and a troop of octogenarians who’d counted on spending their final years in the building, complained that it, in addition to forcing them out, was opaque and suspicious. Adding to the intrigue was the fact that the deal’s main architect was former Cantor Fitzgerald CEO and commerce secretary Howard Lutnick, who owns the penthouse but never moved in (he has a townhouse nearby and said he planned to use the triplex atop the tower for entertaining and a private basketball court so he could practice shooting hoops in the sky). As the largest shareholder, Lutnick, who bought the penthouse for $44 million in 2017, stood to gain the most from the sale. And Newmark, a firm Cantor owned that arranged the deal, would also take home a healthy commission. “I want to get someone to buy this,” Lutnick reportedly told a group of businessmen at a gathering in the hotel before he put together the deal with the Khashoggis and the Dorchester Collection, which would manage the hotel. In advance of a fall vote on the deal, the Khashoggis were to pay a $100 million deposit in early September. When they missed the deadline, the board gave them another month. When they missed the next deadline, the board called the deal off. In a call with the Times, Motasem Khashoggi claimed that he had the funds but couldn’t deliver the deposit because his bank held up the transfer, adding that he was “extremely disappointed.” A lawyer for residents opposing the sale told the paper that the deal’s disintegration was as mysterious as everything else about it: “We still don’t know what really happened.” The Pierre Sale to the Khashoggis Falls Through Your product is saved! You’ll receive emails when your saved products go on sale. Manage preferences.