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DEAL OF THE WEEK
- Pittsburgh Hilton sale slated to close shortly; price undisclosed.
- 50-Year-old hotel saddled with $6 million debt load.
- Miami Dolphins owner Stephen Ross and condo developer Jorge Perez buying the property.
- 25-story, 713-room Downtown hotel is largest in metro Pittsburgh
- Shubh Hotels of Boca Raton bought hotel from Hilton Corp. in 2006 for $28 million.
(PITTSBURGH, PA) -- The debt-laden Pittsburgh Hilton, the largest hotel in metro Pittsburgh, is expected to have new owners shortly.
By size alone, area brokers say it will be the biggest deal of its kind this year in Pennsylvania.
Miami Dolphins owner Stephen Ross, a New York city developer and investor, and his longtime Miami associate, Jorge Perez, the largest condo developer in South Florida, are purchasing the 50-year-old Downtown hotel for an undisclosed price.
Ross and Perez, who heads The Related Group of Miami, also have brought in Kiran Patel, a nationally known philanthropist and Tampa, FL cardiologist, as a partner.
They are buying the 25-story, 713-room hotel from Shubh Hotels of Boca Raton, FL which is headed by CEO Atul Bisaria and run by Harris Mathis, chief operating officer.
Shubh bought the Pittsburgh Hilton in 2006 from Hilton Hotels Corp. for $28 million or about $40,000 per room. Hotel industry analysts and lodging brokers in a position to know speculate the effective sale price will be about $14 million or $20,000 per room.
They made that estimate after Perez previously announced the property will need at least $5 million in renovations and unfinished construction expense.
Perez-Ross-Patel will also be taking on $6 million in Shubh's unpaid bills, according to previously filed lawsuits. The Related Group will operate the hotel.
"The Hilton is an iconic property in Pittsburgh and in need of some dollars to bring it back to the prominence it once had," Perez told The Miami Herald.
"We plan on making the necessary improvements and holding this asset for long-term appreciation."
Shubh chief operating officer Harry Mathis told the Pittsburgh Tribune-Review he expects the sale deal to go through "any day now."
Harris confirmed the hotel's new owners would be responsible for paying numerous subcontractors, contractors, pension and welfare funds money previously owed by Shubh.
The new owners would also need to apply for a new building permit that costs $30,000, according to Pittsburgh's Building Department.
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