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Phil Pilevsky is only in it for the money. For Donald Trump, it's pure ego. And Peninsula Group considers it a matter of necessity.
Although the driving force in each case is different, the result is the same: Prices for hotel properties in New York are skyrocketing because individuals and corporations are willing to pay top dollar to serve their own agendas.
In the last two years, 13 hotels have been sold at eyebrow-raising prices. But despite the skeptics, there are good, if diverse, reasons behind the sudden transformation in the hotel scene.
For example, Mr. Pilevsky and Arthur Cohen, who already own the soon-to-be-reopened Royalton and the Century Paramount, last month paid $60 million to add the Barbizon Hotel to their stable. "I rarely go in hotels," Mr. Pilevsky says. "I'm looking to buy anything that makes money, and hotels have become unbelievably valuable because of the increase in foreign trade."
Mr. Trump, of course, found the lure of owning the most famous hotel in New York worth $410 million, even though he now boasts in The New York Times that the Plaza's $400,000-per-room price cannot be justified.
And Hong Kong-based Peninsula Group may have shocked the industry by shelling out $127 million, or about $500,000 per room, to purchase the Hotel Maxim's de Paris on Fifth Avenue. But it needed such a hotel as part of its plan to establish a worldwide first-class chain, a feat that can't be accomplished without a property in New York.
Still, many observers say the recent flurry of purchases can't continue much longer because prices have finally become too high even for the...