Canadian Reichmann Family has sold the Jerusalem Waldorf Astoria Hotel to French-Jewish businessperson Michel Ohayon, for $130 million.
After six months of negotiations, an agreement was signed last Wednesday. The five children of the hotel‘s founder, Jewish-American magnate Paul Reichman, sold the property to Michel Ohayon, who owns hotel properties in Europe, including the Waldorf-Astoria Hotel in Versailles, France.
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Completion of the transaction and the transfer of ownership of the hotel will be done in the first quarter of 2018, subject to preconditions.
The hotel, located on the corner of Agron and King David Streets in Jerusalem, was first built as Arab Palace Hotel, which was closed in 1935.
Reichmann bought the old building and the nearby customs house in 2005 for $20 million. Construction began two years later while preserving and restoring parts of the original hotel at an investment of tens of millions of dollars.
The hotel features 227 rooms and suites, restaurants and a banquet hall. In April 2014 it opened to visitors at the end of seven years of construction and about half a year after the Reichmann’s father died.
The customs house was converted into a project of 30 luxury residential wing, the most expensive apartments in Jerusalem. In 2014, Russian oligarch Leonid Nevzlin bought a 500-square meter apartment there for NIS 40 million. The last three apartments, which had not yet been sold, were transferred to Michel Ohayon as part of the deal.
Jerusalem real estate agent Eli Pollak, whose father Moshe brokered the sale of the Palace Hotel and the current deal until his death a month ago, told Calcalist that Reichmann’s heirs did not see the hotel as part of their core business. Last year they were looking for a buyer: “They have no other business in Israel, This is not their area of expertise.”
According to sources in the city, the hotel has limited business success, and although it does not lose its profitability is not high.
Ohayon plans to complete the construction of the spa complex, which is considered a significant source of profit and to establish a luxury restaurant in the commercial areas of the property that is not in use.
In the Haredi media, which has been following the deal in recent weeks, fears have been raised that transferring ownership of the hotel would damage its strict religious character, which was intended to appeal to a wealthy Haredi population, mainly from the United States.
According to Pollack, Ohayon is being an observant Jew makes the fear unjustified. Market sources believe that the character of the hotel will not change.
The Hilton Hotel chain manages the Jerusalem Waldorf Astoria. The agreement extends for another 15 years.
Attorney Deuel Palai, who represents the Reichmann family, told Calcalist that “from the standpoint of the Reichmann family, the agreement, for now, is conditional, and they are waiting to receive the buyer’s announcement in the coming days that his financing agreement is closed.”
Mishel Ohayon said following the signing of the deal: “Jerusalem is an exceptional destination for tourism from the US, Europe, and the Far East. I am proud to bring the hotel to my choice of hotels in Europe. “