IstithmarWorld

Dubai-Based Fund Loses W Union Square Hotel

The fallout from the Dubai cash crunch seems to have begun. Dubai-based Istithmar lost control of the W New York Union Square hotel during a foreclosure auction on Tuesday. The Real Deal reports that one of the property's lenders LEM Mezzanine, a private equity fund holding a junior portion of the mezzanine debt bid $2 million for the debt on the hotel which Istithmar bought in 2006 for $285 million. Istithmar had also submitted a bid of $2.1 million but they had asked for certain loan changes and so LEM was named the winning bidder taking on $212 million in debt. The hotel will continue on as usual and LEM is banking on an eventual upturn in the tourism market.

What will Istithmar unload next? Two potential targets seem to be Barney's New York which has been rumored to be for sale for a long time. The problem is that no one is willing for pay what Istithmar paid for it ($942 million in 2007) especially at a time when department stores have been going through a deep and painful purge. This year's holiday season could be key for the department store brand. Another target could be the Queen Elizabeth 2, the luxury liner which is supposed to become a floating hotel. Istithmar also owns shares in Yacht Haven Grande, a mega-marina and resort complex in the U.S. Virgin Islands.

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Tags: dubai, istithmar, istithmar world, IstithmarWorld, new york city, NewYorkCity, union square, UnionSquare, w hotel, WHotel

Barneys For Sale

by Deidre Woollard (RSS feed) —

Luxury department store Barneys may be the next big brand seeking a buyer. The Dubai-based investment fund Istithmar World which bought the retailer less than two years ago is looking to sell. Bloomberg reports that Istithmar wants to sell for the same $942.3 million it paid in September of 2007. Of course things were a little different then and some say that it's ludicrous to expect the same price now. Luxury department stores have been suffering in recent months with both Saks Fifth Avenue and Neiman Marcus reporting major sales declines and laying off workers.

Some say that Istithmar World is looking to raise ready cash and the state-owned fund is willing to sell its entire stake. Dubai's rapid real estate expansion and declining oil prices have put the country in deep debt.

Barneys has had a history of ups and downs. The store was founded by Barney Pressman in 1923. The Pressman family lost control in 1998 and the company flirted with bankruptcy.Jones Apparel Group Inc. for $294.3 million in 2004, a number that seems small considering what they were able to sell it for a few years later. Istithmar would have to hold on to the brand for a long time to get a similar return on its investment. The news comes just as Barneys has been in the news for creating window displays celebrating designer Isabel Toledo, the designer of Michelle Obama's inauguration outfit.

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Tags: barneys, barneys new york, BarneysNewYork, Istithmar World, IstithmarWorld