RCA in the commercial property press:

Istithmar World Seeking Recovery for Mandarin

Wall Street Journal reports: Istithmar World has no shortage of issues: It lost a Times Square office building to foreclosure and is trying to regain the foreclosed W Union Square hotel. Its embattled chief executive departed in January. And its parent, Dubai investment arm Dubai World, is trying to restructure $22 billion of debt.

Amid that upheaval, there's one trophy property that Istithmar refuses to part with despite the hefty costs of keeping it: the ritzy, 248-room Mandarin Oriental hotel in Manhattan's Time Warner Center.

The Mandarin, a favored venue for wealthy international vacationers, is among the most expensive hotels in the city, with nightly room rates that range between $600 for a standard room and $2,500 for some of the larger suites. But after occupancy sank last year, the revenue from paying guests wasn't enough to fully cover the cost of running the hotel, including payments on the hotel's $238 million mortgage.

Such factors contributed to Istithmar targeting the Mandarin in 2007 as part of its strategy to buy luxury hotels in major cities. The deal is among the most expensive on a cost-per-room basis for a large, New York City hotel in recent years. "I'm pretty sure it was the high-water mark," said Dan Fasulo, managing director of Real Capital Analytics, a global commercial real estate research firm.

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Posted by: Nina Turner

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