The Waldorf Astoria has provided memorable moments in the past, but its path towards a condo conversion is shaping up to be a chapter it would like to forget.
The latest blow to the struggling project came when Dajia US CEO Andrew Miller, the top U.S. executive overseeing the project, abruptly left the company last week, the Wall Street Journal reported. Miller was reportedly at odds with executives at the Chinese parent company over cost overruns and left without a successor in place.
The departure is the most recent in a long line of obstacles the storied property has encountered in its journey towards a future with both 375 hotel rooms and 375 condo residences.
In addition to supply chain and material issues that have plagued construction in the wake of the pandemic, the landmarked property includes a bevy of challenges in the redevelopment of its historic rooms that have driven up costs and lengthened timelines.
Donna Olshan, the founder of an eponymous boutique brokerage and author of a weekly report on Manhattan’s top luxury contracts, said she hasn’t tracked any sales at the property as factors like war, inflation and rising rates could be deterring international buyers.
“When you put that cocktail together, that can be daunting for a developer,” Olshan told the outlet.
The costs are soaring past $2 billion for a project that was supposed to be completed in 2021, but people familiar with the matter said it is now aiming to finish by the end of next year — at the earliest.
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Dajia US came about to manage the assets of the original developer for the project, China’s Anbang Insurance Group. Anbang purchased the building in 2015 for a record $1.95 billion and dumped $1 billion into renovations, shutting down the hotel and beginning the conversion process in 2017.
The Chinese government seized Anbang in February 2018 as part of a crackdown on companies spending big on foreign assets. Months later, company CEO Wu Xiaohui was sentenced to 18 years in prison for defrauding investors.
The company was under government control for two years, but the Waldorf Astoria managed to avoid the chopping block as the government looked to unwind the company and sell assets. Sales for the building’s residential condos finally launched in March 2020, days before the coronavirus pandemic rankled the global market.
The project’s sales gallery was shut down on March 16, two weeks after opening. At the time, Miller defended the timing of the sales launch, saying that “market and buyer enthusiasm for the project is incredibly high.”
Douglas Elliman is marketing the condos, a process being overseen by Dan Tubb. Tubb told the Journal that sales were picking up and April was arguably the busiest month yet, but didn’t provide specifics.
[WSJ] — Holden Walter-Warner