With the temporary takeover of Anbang Insurance Group Co. by China’s government, real estate buyers are eyeing marquee properties from New York to California acquired in a global shopping spree.
The insurer, like its fellow Chinese investor HNA Group Co., went on a multibillion-dollar buying binge over the past few years, grabbing properties including Manhattan’s Waldorf Astoria hotel, which it acquired three years ago for a record $1.95 billion, and Strategic Hotels & Resorts, a luxury-lodgings owner with locations in San Francisco, Chicago and New York. Other purchases included 717 Fifth Ave. in New York, a 26-story office building that’s home to Anbang’s U.S. headquarters.
“As you think about the Strategic assets, there would be plenty of very interested and well-capitalized buyers -- some looking at individual assets or markets, some potentially interested in the entire portfolio,” said Michael Bellisario, senior research analyst at Robert W. Baird & Co. “When you pair a motivated seller and well-capitalized buyers searching to put money to work, that’s a good combo to see assets clear.”
The Chinese government said Friday that it took temporary control of Anbang and will prosecute founder Wu Xiaohui for alleged fraud, cementing the downfall of a dealmaker whose aggressive global expansion came to symbolize the overreach of the country’s debt-laden conglomerates. The government said it would consider “all or partial” sales of Anbang’s assets, without providing more details.
One company that benefited from Anbang’s fast expansion was Blackstone Group LP -- the world’s biggest private equity investor in real estate and a major seller of property to Anbang, including the Strategic properties and 717 Fifth -- and it could benefit again should the insurer unwind its holdings. Blackstone has held initial discussions about bidding for Anbang assets, including Strategic and the Waldorf, people with knowledge of the matter said earlier this month.
A Blackstone representative on Friday had no immediate comment.
Here’s a rundown of Anbang’s assets in North America -- properties that may soon be on the market and ready to be scooped up by Blackstone or other buyers:
The Waldorf Astoria
In early 2015, Anbang completed the purchase of the 1,232-room Park Avenue tower, an Art Deco landmark and one of Manhattan’s signature properties, for $1.95 billion, the highest price ever paid for a single hotel in the U.S. and the most paid by a Chinese buyer for a building in the country. The seller was Hilton Worldwide Holdings Inc., taken public by Blackstone in late 2013.
Anbang has told Hilton, which manages the property on behalf of the insurer, that it’s moving forward with plans to convert hotel rooms into high-end condos. The interior of the Midtown property is under “heavy demolition,” Hilton Chief Executive Officer Christopher Nassetta said on the company’s earnings call last week. While Anbang is believed to be selling assets around the world, “at the moment, the Waldorf is not one of those,” he said.
Should the Waldorf be put on the market, the property “is a different animal” from the Strategic hotels because of “its size and ongoing redevelopment,” Bellisario said. “This limits the buyer pool.”