Washington developer Monument Realty LLC said it expects to close a deal today to buy the 251-room Watergate Hotel from Blackstone Real Estate Advisors LP and proceed with its plan to convert the hotel into luxury cooperative apartments.
The two sides would not reveal the price. Brokers and real estate experts estimated it to be about $55 million. Blackstone, a New York investment group, paid $39 million for the hotel, which it bought from Japan's Nikko Securities in 1998.
Michael J. Darby, principal at Monument, said Blackstone will continue to operate the hotel over the next year while he works out final details for the conversion. The 133 co-op units are expected to open in early 2006 and will range in price from $700,000 for a one-bedroom unit to more than $3 million for a three-bedroom penthouse, Darby said.
The Watergate complex consists of the hotel, three residential buildings with 644 co-op units and two office buildings.
The hotel sale was opposed by some residents of the Watergate East complex, a co-op building next to the hotel. They said they were worried about increased traffic, decreased property values and the loss of the hotel restaurant and bar.
They tried to stop the hotel sale by attempting to block the sale of 46,000 square feet of underground space that the Watergate East co-op owns. Darby wanted to use that space for parking and offered the Watergate East $4.25 million for it. There have been numerous co-op votes and lawsuits over the sale of that space.
Darby said yesterday that he will proceed without a resolution of the parking-space deal. He said he has a purchase contract with the Watergate East co-op board to buy the space and is planning to build the garage unless a judge "says it can't happen."
Darby said he wants to move on. He is planning a party in a Watergate ballroom on Wednesday to which he has invited 1,000 people, including supporters and opponents of his project, to celebrate his purchase of the hotel.
"I think they understand the deal is done now," Darby said of those who fought his project. "We're hoping we can become good neighbors and friends."