Istithmar loses prime US property after default
Dubai, March 4, 2010
Istithmar World, a unit of Dubai World, has handed over a prime New York residential building to Danske Bank after failing to pay its mortgage, a UAE daily reported on Thursday.
This is the loss of its second property in Manhattan since December.
Istithmar, whose parent company is looking to restructure $22 billion in debt, bought the building, formerly known as the Knickerbocker Hotel, in New York's Times Square for $300 million in June 2006, during the firm's heyday when it was on the acquisition trail.
'We have hired Jones Lang LaSalle to market the property. We do not expect further write-downs on the property,' The National newspaper quoted Anders Klinkby Madsen, spokesman for Danske, Denmark's largest lender, as saying.
A spokeswoman for Dubai World declined to comment.
LEM Mezzanine took control of the W New York Union Square hotel from Istithmar in December for $2 million in a New York foreclosure sale. Istithmar also has the W Washington DC and Mandarin Oriental New York in its portfolio.
Dubai World is seeking to offload assets as part of a restructuring plan after the state-owned conglomerate rocked global markets last November when it asked for a delay on paying $26 billion in debt linked to its main property units.
Istithmar hired an advisory firm in August to help it mull options to shore up the financial position of its US luxury retailer Barneys amid speculation it is freezing investments as part of a restructuring that may result in the sale of the fund or its assets.
Istithmar sold its entire holding in Indian budget airline SpiceJet this year for $35.23 million. It also plans to sell port and shipping agent Inchcape Shipping Services (ISS) for up to $700 million. - Reuters