- The Washington Times - Sunday, June 4, 2006

DUBAI, United Arab Emirates (Agence France-Presse) — A Dubai government-owned firm said yesterday it bought the Knickerbocker Hotel in New York’s Times Square for $300 million.

Istithmar Hotels, which has investments at home and abroad, said the classic Beaux Arts-style hotel, which was converted into an office property in the 1950s, would be converted back into a five-star hotel.

“Knickerbocker is a premier property in one of the world’s most recognized locations,” said Muneef Tarmoom, chief executive officer of parent company Istithmar, which means “investment” in Arabic.

“The most fascinating thing about this property is not its design, but its history,” he said .

The hotel, built in the early 1900s, is located the heart of Manhattan on the southeast corner of Broadway and 42nd Street. The Knickerbocker was one of Midtown’s premier hotels and one of the tallest buildings on Times Square.

Istithmar announced May 20 that it had acquired Loeh-mann’s, a 60-store chain specializing in designer clothing at discount prices, for $300 million from Arcapita, an Atlanta private-equity firm. Loehmann’s, founded in 1921, was forced into bankruptcy in 1999 after over-expanding.

Istithmar’s purchase of U.S. interests comes on the heels of the controversy that surrounded the acquisition of British shipping giant Peninsular and Oriental Steam Navigation Co. earlier this year by DP World, another government-controlled company.

A portion of the deal would have given DP World the right to operate six major U.S. ports, but Congress opposed the deal on security grounds, forcing the Dubai government to agree in March to cede control of the U.S. operations to a U.S. entity in order to avert a standoff with a major ally.

However, Dubai International Capital, another government-controlled entity, last month sealed a $1.27 billion deal to take over British engineering company Doncasters Group, which owns a U.S. company that supplies parts to the U.S. military.

Dubai Investment Group, part of state-owned Dubai Holding, purchased the Essex House Hotel in Manhattan in September. The hotel is now operated by Dubai Holding’s hotel arm, the Jumeirah Group.

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