New york: Lotte Hotel and Resorts, the hospitality division of South Korea's Lotte Group, has announced a significant deal to acquire the land of The New York Palace Hotel for $490 million, thereby consolidating its ownership of both the hotel building and the site.

According to Yonhap News Agency, this strategic acquisition comes after the group purchased the hotel building in 2015 and reopened it as the Lotte New York Palace, initially leasing the land.

The hospitality company recently concluded prolonged negotiations with the Archdiocese of New York, the former owner of the property. Reports indicate that the Archdiocese opted to sell the Manhattan ground lease as a means to fund settlements for victims of clergy sexual abuse. By acquiring the land, Lotte Hotel and Resorts aims to eliminate the financial uncertainty associated with potential rent hikes linked to lease renewals every 25 years.

Lotte has disclosed plans to secure funding for the purchase by leveraging its existing assets and attracting new investment. This transaction aligns with the group's broader portfolio strategy, which includes efforts to enhance financial stability. From a long-term perspective, the company anticipates that the acquisition cost will prove more economical than continuing lease payments.

A company official highlighted that this acquisition represents a pivotal moment in Lotte's global expansion efforts by bolstering its brand value. The deal is seen as a critical step in strengthening the group's presence in the international hospitality market.