Hilton has agreed to sell Manhattan’s Waldorf Astoria for $1.95 billion to a Chinese insurance company.
According to The Wall Street Journal, the sale price is one of the highest ever for a luxury hotel, and the price tag of $1.3 million per room is also among the highest paid in the United States on a per room basis.
Hilton had been deciding between an outright sale of the property or converting it into condos, but Beijing-based Anbang Insurance Group’s nearly $2 billion offer, which beat out two other bids, sealed the deal.
Under the new deal, Hilton will continue to manage the hotel for the next 100 years. Hilton plans to use the money from the sale to acquire new international properties, which will also help offset some of the tax on the transaction.
Anbang Insurance Group has confirmed that it will upgrade the property, but it’s not clear if that includes converting some of the hotel’s 1,232 rooms into private residences.
The deal is one more piece of good news for Hilton, as the company had raised its yearly forecast after higher-than-estimated second quarter revenues. Since debuting in December with an opening price of $21.30, the company’s stock has risen 9.3 percent so far this year.
According to Bloomberg and The Financial Times, this deal comes on the heels of a New York City hotel buying frenzy. Including the Waldorf Astoria deal, there have been at least 12 major luxury hotel deals in Manhattan since 2006, including Hyatt Hotel’s $390 million purchase of the Park Hyatt New York in August and the sale of The Carlyle hotel to Hong Kong billionaire Cheng Yu-tung in 2011.
The Waldorf Astoria is Anbang Insurance Group’s first major US deal and is one of many major Chinese investments in New York City this year. Other major real estate deals include billionaire Zhang Xin’s purchase of a stake in the General Motors Building, Fosun International’s purchase of 1 Chase Manhattan Plaza from JP Morgan Chase, and Greenland Holding Group’s 70 percent acquisition of Brooklyn’s Atlantic Yards project.
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