Iconic Waldorf Astoria hotel is part of China's US property fire sale - but don't expect a bargain
Spooked by Beijing’s tightened grip, Chinese firms are exiting the American market, but some are still seeing a profit
When Wu Xiaohui, Anbang Insurance Group’s billionaire founder, bought Manhattan’s landmark Waldorf Astoria in 2015, he said he planned to hold onto the hotel gem for 100 years.
Only two years later, however, the Chinese auto-insurance-salesman-turned-business-tycoon was arrested. Anbang was officially taken over by the Chinese government in February, and Wu pleaded guilty in March to fraud and embezzlement, facing a potential life sentence. The company’s US assets – including the famed hotel – are back on the block.
Anbang is among a list of Chinese conglomerates that went from buying up billions of dollars of hotel and office buildings in the US to collectively selling them off in just a couple of years.
From HNA Group to Dalian Wanda Group, Beijing’s tighter grip on capital outflow has brought down once high-flying deal makers and prompted Chinese companies to reverse course and to exit their briskly obtained overseas assets.
“Few could have predicted Chinese buyers’ fast entry” a few years ago, said Richard Hightower, a real estate analyst at the New York-based investment bank Evercore ISI. “And few could have predicted their quick exit either.”
At the height of the buying spree, Chinese companies invested a total of US$37 billion in US real estate from 2014 to 2016, according to Real Capital Analytics, a New York-based commercial property data provider.