The recent purchase of the historic Waldorf-Astoria hotel by a Chinese insurer for $1.95 billion illustrates Chinese investors turning to real assets in the U.S and Europe as a safe haven – including hotels.
The acquisition by China’s Anbang Insurance Group set a record for the largest acquisition of a U.S. real estate asset by a Chinese buyer, as well as being the most expensive purchase ever of a U.S. hotel. The price paid for the 1,413 room hotel means Anbang committed approximately $1.4 million per room for the art deco landmark.
NEW YORK (TheStreet) — Macroeconomic turmoil is once again putting the U.S. real estate market in the spotlight, but this time it’s part of the solution, not the problem.
American real estate is becoming a refuge for Chinese investors, particularly insurance companies that may amass $3.32 trillion in premiums by 2020, who are seeking reliable returns as the world’s second-largest economy slows and its stock markets decline, according to both advisers and industry executives.
Developers, financial institutions and high net-worth individuals are seeking “safe investments in income-producing commercial and residential investments rather than luxurious real estate purchases for personal use,” said international real estate attorney Edward Mermelstein, who has spent 20 years advising clients on such transactions.
It’s a strategy not unlike the one players use to get ahead in Hasbro’s (HAS – Get Report) Monopoly, buying real estate and adding revenue-generating houses and hotels.