Chinese Firm Pays Record Price for Waldorf Astoria
Hilton Worldwide is selling the Waldorf Astoria hotel in New York City to a Chinese company for $1.95 billion. The buyer -- Anbang Insurance Group -- will pay one of highest prices ever for a U.S. hotel. Hilton Worldwide says it will use the money from the sale to buy other hotels in the United States. As part of the deal, Hilton will continue to operate the Waldorf Astoria for the next 100 years.
The Chinese buyer has said it will invest in remodeling the famous property on Park Avenue to bring it back to its "historical grandeur."
Reports say the deal is the largest for a Chinese company buying a U.S. building. Chinese investors increasingly have become interested in U.S. properties. Homes -- especially costly ones -- are considered a good investment. The National Association of Realtors says China's spending on homes in the U.S. has increased sharply. The trade group estimates that Chinese buyers spent $22 billion on real estate properties in the twelve-month period ending in March 2014. That is an increase of 72 percent over the 12-month period before.
Chinese companies also increasingly are seeking businesses outside of the energy and raw materials industries. Last year, a Chinese company bought Smithfield Foods, the largest pork producer in the U.S., for nearly $5 billion.
For many years, Japan has had a large trade surplus with the U.S. In the 1980s, Japanese companies bought important U.S. properties. These included a controlling share of Rockefeller Center, also in New York, in 1989. However, not all of these investments made a profit.China holds about $1.2 trillion dollars in United States treasury securities. While these investments are safe, they do not give high returns, or yields. China has increasingly looked for other ways to invest its huge trade surplus with the U.S.
The Waldorf Astoria hotel opened in 1931. It has been a symbol of the wealth and culture of New York City since that time. World leaders and other very famous people have stayed at the hotel. Recently, many delegates to the United Nations General Assembly stayed at the hotel.
The Waldorf Astoria was named a New York City landmark in 1993. Other landmarks are the Empire State Building and the Brooklyn Bridge.
I'm Christopher Cruise.