Luxury Real Estate made headlines as Hilton Worldwide Holdings Inc. agreed to sell the Waldorf Astoria hotel in Manhattan. The landmark is being sold to Anbang Insurance Group Co. in China for $1.95 billion.
Paying $1.38 million per room, this deal will result in one of the highest prices per room ever paid for a hotel in the U.S.
The building itself if 83-years-old and takes up one whole block on Park Avenue. The purchase ends more than 40 years of ownership by Hilton.
Hilton confirmed that it will continue to manage the luxury hotel, and the deal states that they will do so for the next 100 years. It plans to renovate as well as use the proceeds from the sale to buy other properties in the United States.
Evercore Partners analyst Smedes Rose says, “The sale allows [Hilton] to unlock a lot of capital and redeploy to grow the company’s presence in other markets.”
The hotel was approached by two other buyers as well as Anbang before the Waldorf was officially up for sale.
Senior vice president at Lodging Econometrics, Bruce Ford, tells us, “There really are no other sales to compare it to. It is he most unique asset with the most unique location in the world.”
The Hotel
The Waldorf has 1,413 rooms with 181 of them located in The Towers on floors 27 through 42. 121 of those 181 rooms are classified as historical suites. That number is high considering most hotels have maybe 10 suites.
Each of those 121 suites is different. Luxury suite specialist Jackie Collens says, “The Towers is really a hotel within a hotel.”
The Hotel: Fun Facts
- The largest suite is the Cole Porter with its five bedrooms 4,300 square feet of space. Cole Porter’s piano is also still in the suite, making it more popular.
- There is a job for a window opener at the hotel. That is his only job because the windows are heavy and hard to open. Another unusual job is ‘chandelier cleaner’.
- The most requested suite, The Presidential Suite, has had every president stay in it since the hotel opened in 1931.
- The Elizabeth Taylor suite has the largest bathtub, spaciously fitting at least three people.
- Extending from Grand Central Terminal is an underground rail that goes to the 4th floor of the hotel’s basement. This is how Franklin Delano Roosevelt was transported to the hotel to hide his use of a wheelchair.
Why Sell?
Deciding it was better to sell than take on the cost of renovations, Hilton made the decision to sell in favor of plans to buy other hotel assets with higher cash flow.
Who is Buying?
Manhattan real estate values have risen due to investors around the world seeking safe investments.
Anbang provides insurance and financial services to over 10 million customers in over 3000 outlets in China.
They currently manage around $114 billion worth of assets. It is also reported to recover its investment in about 10 years based on the hotel having full occupancy at a room rate of $329.