Anbang to convert Waldorf hotel into condo complex

Redevelopment of Chinese-owned site to cost more than US$1 billion

PUBLISHED : Tuesday, 28 June, 2016, 8:04pm
UPDATED : Tuesday, 28 June, 2016, 8:06pm

The Chinese owner of New York’s landmark Waldorf Astoria, Anbang Insurance Group Co, plans to close the hotel next spring to convert around two thirds of its 1,400 rooms into luxury private condominiums.

Still managed by Hilton Worldwide Holdings Inc, the iconic art deco building will reopen with 300 to 500 hotel rooms remaining, according to a well-placed industry source.

Beijing-based Anbang confirmed in an emailed statement, it was “currently developing conceptual plans [for the building] and will share additional details once those are finalised”.

“We are still considering the next-step development for Waldorf,” it said.

Anbang bought the historic Waldorf for US$1.95 billion in 2014, a record price for a US hotel.

The planned spring closing was first reported on Sunday by the Wall Street Journal.

It claimed the vast reduction in hotel rooms would lead to the elimination of many room-service, housekeeping and other hospitality jobs among the Waldorf’s 1,500 staff.

The new owners and Hilton Worldwide Holdings Inc, which will continue to manage the property when it reopens, have reached severance agreements with hundreds of these workers at a cost of US$100 million or more, said the WSJ.

Anbang plans to meet with Waldorf representatives during the next couple of weeks to finalise its proposal for the property, and the redevelopment costs are expected to run to more than US$1 billion, the report added.

Last year, New York City Council passed a law banning hotels with more than 150 rooms from converting over 20 per cent of the property into residences without going through a public review process. But the legislation exempted some recent transactions, including the Waldorf Astoria.

Privately-owned Anbang has expanded quickly in both domestic and overseas markets. It rose to be China’s third-largest insurer by premiums in the first quarter this year.

It has been aggressively buying overseas assets in the past few years and has completed 11 outbound acquisition deals since 2012, worth more than US$4.98 billion.

But the investment spree has slowed this year. It recently withdrew its bid for hotel chain giant Starwood Hotels and Resorts for as much as US$ 14 billion after a three-week bidding war with Marriott International.

Recently it again withdrew an application to acquire US based annuities and life insurer Fidelity & Guaranty Life.

Additional reporting by Xie Yu