The Real Deal New York

Anbang has Hilton “over a barrel” with $2 billion Waldorf conversion: report

Sources say hospitality company was blindsided by plans to leave just a few hotel rooms
October 30, 2017 10:18AM

Anbang’s Wu Xiaohui and the Waldorf Astoria

A demolition crew has been hired to begin work on the $2 billion renovation of the Waldorf Astoria next month, the New York Post reported.

One source close to the Chinese giant Anbang Insurance Group said the three-year renovation plan is “on schedule” with AECOM Tishman ready to begin demolition next month, the Post reported.

But relations between Anbang and Hilton Hotels, which operates the Waldorf and owns the naming rights, have been strained. Anbang has been mostly silent about its plans since boarding up the 86-year-old landmark in March, partly because company chairman Wu Xiaohui has been detained by Chinese authorities. In August, it was reported that Anbang’s head of real estate Theo Cheng, left the company.

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Anbang reportedly may be forced to sell off its U.S. assets as Beijing restricts capital leaving the country.

Sources told the Post that Hilton was blindsided by Anbang’s plans to convert most of the 1,413 hotel rooms to condos at the Waldorf, which it bought in 2014 for a record price of $1.95 billion.

The insurance giant last fall said it planned to convert just 321 rooms, leaving 840 hotel rooms. But insiders say the company pulled a 180 and decided to leave just 350 to 400 hotel rooms.

“There was never a hint they would shut the Waldorf down and condo it,” a source close to Hilton told the newspaper. “Hilton wants a lot more hotel rooms. This was the grandest hotel in the world.”

One source said Anbang “has Hilton over a barrel,” and the hotelier’s only real choice would be to revoke the license for the flagship property, which would gut the brand. [NYP]Rich Bockmann