Waldorf-Astoria to Be Sold in a $1.95 Billion Deal

The Waldorf-Astoria was unofficially known as New York’s regal palace shortly after its opening in 1931, becoming home to many of the city’s important social functions and visiting dignitaries from countries whose flags fluttered from the parapets.

Eighty-three years later, the Waldorf-Astoria retains its cachet with the pending sale of the landmark hotel to a Chinese insurance company for $1.95 billion, among the highest prices ever paid for a hotel.

The buyer, Anbang Insurance Group, plans a renovation of the hotel on Park Avenue, to restore the 47-story tower to its Art Deco grandeur.

The hotel’s rare marble, gold doorknobs, lavish rooms, artwork, furniture and chandeliers with a cascade of silver and crystal pendants prompted President Herbert Hoover to describe the opening of the Waldorf-Astoria as “an event in the advancement of hotels, even in New York City.”

The seller, Hilton Worldwide Holdings, which owns, controls or franchises more than 4,200 hotels and time-share properties, will continue to operate the 1,413-room hotel under a 100-year management contract with Anbang.

“The Chinese have money to spend and the inclination to do so,” said Sean Hennessey, chief executive of Lodging Advisors, a consulting company that was not involved in the deal. “The property will continue to be an iconic hotel even if it’s owned by a foreign entity.”

The Waldorf-Astoria, on a block bound by Park and Lexington Avenues, between 49th and 50th Streets, is the flagship for a luxury chain — Waldorf-Astoria Hotels and Resorts — created in 2007, with properties in Amsterdam, Beijing, Dubai, Jerusalem, Ras Al Khaimah and Shanghai.

By selling the Waldorf-Astoria New York, Hilton Worldwide accumulates a war chest that it can use to buy other hotels.

But in order to make money, hotel analysts speculate that Anbang may consider selling condominiums in the tower portion of the hotel, which is known as Waldorf Towers.

The apartments in Waldorf Towers feature high ceilings, large marble bathrooms and generous-sized rooms that could prove attractive.

“This relationship represents a unique opportunity for our organizations to work together to finally maximize the full value of this iconic asset on a full city block in Midtown Manhattan,” Christopher J. Nassetta, the president and chief executive of Hilton Worldwide, said in a statement.

Earlier this year, Hilton had indicated it was considering a sale of the property. Two other groups quickly offered to buy it for around $2 billion, but Anbang ultimately signed the contract.

Five-star hotels in cities like London, Paris and New York are a coveted commodity for international buyers. The current owner of the Plaza on Central Park West is the Sahara Group of India, but it has passed through the hands of Israelis and Saudi Arabians along the way.

Another Indian company, Taj Hotel Resorts, owns the Pierre Hotel on Fifth Avenue, at 61st Street. And the Carlyle Hotel, at Madison Avenue and 76th Street, is owned by New World Development of Hong Kong. Constellation Hotels, an investment group based in Qatar and Luxembourg, bought 80 percent of the InterContinental Hotel on 48th Street.

But Chinese companies, in particular, have made a splash of late by buying New York real estate. Fosun International bought One Chase Manhattan Plaza, the downtown office building, for $725 million last year. SOHO China and a Brazilian billionaire bought a 40 percent stake in the General Motors Building. And in Brooklyn, Greenland Holding Group bought a 70 percent stake in the 22-acre development now called Pacific Park that had been known as Atlantic Yards.

The original Waldorf-Astoria Hotel was on a parcel now occupied by the Empire State Building. It started with the 13-story Waldorf Hotel at the corner of Fifth Avenue and 33rd Street in 1893. Four years later, John Jacob Astor IV opened the 17-story Astoria hotel next door. The corridor between the two hotels became known as the Waldorf-Astoria. By the 1920s, the Astoria was dated and out of favor. The Astor family sold it to the developers of the Empire State Building.

A second Waldorf-Astoria, the first to offer room service, was built farther north, over the tracks leading to Grand Central Terminal. For many years it was the tallest and largest hotel in the world.

The Waldorf-Astoria was an object of desire for Conrad Hilton from the day it opened in 1931, when he scrawled “The Greatest of Them All” across a newspaper photograph of the hotel. Fifteen years later, in October 1949, he bought the hotel and made it one of his own.

Source: http://www.nytimes.com/2014/10/07/nyregion/waldorf-astoria-hotel-to-be-sold-for-195-billion.html?_r=0

A version of this article appears in print on October 7, 2014, on page A25 of the New York edition with the headline: Waldorf-Astoria to Be Sold for Sky-High $1.95 Billion. 

 

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