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October 1, 2016

Waldorf Astoria Sale Breaks Record

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Waldorf Astoria Sale Breaks Record

The Waldorf Astoria, known as one of America's most famous hotels, was reportedly sold to Chinese insurer Anbang Insurance Group for $1.95 billion. That makes the sale the largest acquisition of a U.S. real estate asset by a Chinese buyer, as well as the most expensive purchase ever of a U.S. hotel, Forbes.com reports.

Working With Foreign Buyers

Forbes.com says the price for the 1,413-room art deco landmark hotel equated to about $1.4 million per room. Hilton Worldwide has owned the hotel — which covers an entire city block on New York's Park Avenue — since 1949. The hotel has housed numerous world leaders and celebrities over its 83-year history.

It marks the latest "trophy asset" that Chinese buyers have snatched up in the U.S. Private Chinese companies have quickly emerged as leading foreign property buyers in the U.S. Insurance investment firms in particular have been looking for safe assets to park their money; they began their buying surge in the U.S. shortly after China began loosening restrictions on overseas investments in 2012.

As of 2011, Anbang was ranked as China's second-largest insurer. 

"As these insurers move into the U.S., they are likely to follow the lead of Chinese private companies and wealthy individuals by focusing first on America's high profile gateway cities, and by targeting name brand assets," Forbes.com reports.

There have been some notable purchases in the past year by the Chinese. Last October, Fosun International, a Chinese conglomerate run by billionaire Guo Guangchang, acquired One Chase Manhattan Plaza in New York for $725 million. Soho China CEO Zhang Xin purchased a 40 percent stake in the $3.4 billion GM building in Manhattan in March last year.

So far, New York has been the preferred market for many of these commercial acquisitions by Chinese firms in 2014. A Reuters poll of New York City real estate agents in April confirmed that, and it also found that the Chinese had displaced Russians as the largest private buyers of Manhattan real estate.

Source: “Chinese Insurer Buys Waldorf Astoria for a Record $1.95B,” Forbes.com (Oct. 6, 2014)