Anbang expands US hotel foray with $6.5 bn deal

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Anbang Insurance Group Co.’s $6.5 billion agreement to buy 16 U.S. luxury resorts and hotels from Blackstone Group LP marks a record transaction for Chinese buyers of American real estate, showing the strong appetite for high-profile properties viewed as stable investments.
The pending acquisition of Strategic Hotels & Resorts Inc. will give Anbang ownership of trophy properties across the country, including urban hotels and mountain, desert and ocean resorts.
It tops the Beijing-based insurer’s $1.95 billion purchase last year of New York’s landmark Waldorf Astoria hotel as the biggest U.S. real estate deal by a Chinese buyer, according to data from Real Capital Analytics Inc.
Blackstone, which completed its acquisition of Strategic Hotels just three months ago, had been seeking buyers for individual properties in the portfolio when Anbang offered to purchase the entire company, according to people with knowledge of the matter.
The Chinese firm agreed to pay $450 million more than the roughly $6 billion that Blackstone paid, including debt, said the people, who asked not to be identified because the deal is private.
“It’s a great long-term play for Anbang and a good short-term move by Blackstone,’’ said Sonny Kalsi, a founder and partner of GreenOak Real Estate, a private equity firm that manages more than $6 billion.
“A true win-win.”
Foreign investors have been betting on U.S. real estate as a safe place to park money while earning higher yields than they might in alternative investments with a similar amount of risk.
They are attracted to the steady gains in the U.S. economy when growth in China is slowing, and prestige buildings in major North American markets have been a big draw.
Several Chinese companies were said to be pursuing bids for Starwood Hotels & Resorts Worldwide Inc., which Marriott International Inc. eventually won. Shanghai Jin Jiang International Hotels Group Co. last year bought Groupe du Louvre for 1.3 billion euros ($1.45 billion) to gain hotels in 46 countries.

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