Ian Schrager's trendy Paramount hotel in New York will be redeveloped as a Hard Rock hotel next year.
The hip hotelier has sold the Paramount to US venture capitalists Becker Ventures for $126.5m (£68.4m). UK-based Rank Group and Spanish hotel company Sol Meli will develop and manage the property jointly.
Rank said the property will undergo a major refurbishment at the beginning of next year, after which it will be renamed as a Hard Rock hotel. In the meantime it will continue to operate as the Paramount hotel.
It will be the third Hard Rock hotel to join Rank and Sol Meli ‘s joint venture since its formation in 2003. There is one in Chicago, which opened last year, and one in San Diego, California, scheduled to open in 2006.
This is the second sale agreed for Schrager's company, now called Morgans Hotel Group, in recent months. In June the group announced that it had entered into a $71m (£38.4m) sale-and-leaseback deal on its Clift hotel in San Francisco with property company Divco West. Morgans will retain a 99-year leasehold on the property.
Schrager, who filed for bankruptcy protection on the San Francisco hotel last year, said he anticipated making "a number of other positive announcements over the next several weeks".