Waldorf Astoria New York for sale: WSJ

NEW YORK CITY – The Chinese state-run Dajia Insurance Group is preparing to sell the Waldorf Astoria New York after sinking nearly $4 billion into the property, including Anbang Insurance Group’s $1.95 billion purchase in 2014 and a reported $2 billion lengthy eight-year and overbudget renovation.

The Wall Street Journal broke the story on Wednesday, citing a broader trend of Chinese firms divesting from major U.S. real estate assets due to policy pressures from Beijing to streamline overseas holdings. Others have suggested the sale is a result of balance‑sheet realities at Dajia Insurance Group and market timing. Investment bank Eastdil Secured is expected to market the property for what is expected to be in excess of $1 billion.

Waldorf's adjoining restaurants, shops and other amenities would be included in a sale, but the condos would continue to be sold separately, the Journal reported, citing people with knowledge of the plans.

“In addition to being way over budget in executing the renovation, the property was originally acquired in 2014 for an amount that many perceived at the time was significantly above market,” Daniel Lesser of LW Hospitality Advisors in New York told Hotel Investment Today. “Also factoring in a decade of carry costs it is highly unlikely that the seller will realize sales proceeds that come close to their basis in the deal. With this said I would not be surprised if the trophy property once again trades for a record amount for a non-gaming U.S. hotel asset.”

Lesser added, “Interesting that the property is being offered for sale with no proven cash flow shortly after reopening, and therefore will most likely be priced on a forward look only.”

The venerable Waldorf, which closed with some 1,400 rooms, today has 375 hotel rooms and 372 private residences with Hilton holding a 100-year management contract.

The Waldorf has re-opened to great fanfare over the last few months with Hilton using the tagline “The Greatest of Them All.”

When Waldorf Astoria New York opened its doors in 1931, the hotel set a record as the highest and largest hotel in the world, emerging as an Art Deco icon and a symbol of New York culture. The hotel encompasses 62,000 square feet of landmark-protected spaces that required special care during the restoration, which has been led by Skidmore, Owings & Merrill.