The site it occupies was part of the former Palace of the Duke of Medinaceli, commissioned by the Duke of Lerma in the 17th century, which was popularly known by the people of Madrid as the Palacio del Prado (Prado Palace). King Philip V lived there. The palace was abandoned after the death of the fiftieth Duke of Medinaceli in 1873 and was demolished in 1910 due to its dilapidated state.

The Palace, with its gardens, orchards and outbuildings, occupied the vast block between Carrera de San Jerónimo, Paseo del Prado and the streets of Huertas, Jesús, Cervantes, and Plaza de las Cortes. Several buildings were erected on the site it occupied, including the Palace Hotel, which opened in 1912 as the largest hotel in Europe, and the Palacio de Neptuno (Neptune Palace).

Completely restored, it is known for the elegance of its halls and a spectacular stained glass window, the work of the Madrid artist Manuel Ortega.

© Victor Cid