China’s Anbang Agrees to Sell U.S. Hotel Portfolio for $5.8B

by Kristin Harlow

BEIJING — China-based Anbang Insurance Group Co. has agreed to sell a luxury U.S. hotel portfolio for more than $5.8 billion, according to several media outlets. Mirae Asset Global Investments, part of a South Korean financial services company, has agreed to acquire the 15 properties.

The portfolio includes high-end hotels such as Essex House in Manhattan, Westin St. Francis in San Francisco and InterContinental hotels in Chicago and Miami. Anbang acquired the hotels in 2016 by purchasing then-owner Strategic Hotels & Resorts Inc. from Blackstone Group for approximately $6.5 billion.

Anbang was making major waves that year, during which it also severely complicated Marriott International’s attempt to acquire Starwood Hotels & Resorts Worldwide. Anbang started a bidding war that increased the final offer by nearly $2 billion before Anbang backed out.

At the time, Chinese insurers and other investors were scooping up U.S. real estate, taking advantage of new rules enabling them to invest more easily abroad, according to the Wall Street Journal. That era ended when Chinese authorities seized control of Anbang and later sentenced Chairman Wu Xiaohui to 18 years in prison. He was convicted by a Chinese court for orchestrating a $12 billion fraud.

In readying the portfolio for sale to Mirae, Anbang discovered that six of the properties’ deeds were fraudulently transferred to limited liability companies, according to the Wall Street Journal. The fraudulent transfers, discovered during a routine search, delayed the deal. It has not yet been discovered who made the transfers or how they expected to profit from the move.

Anbang will retain ownership of the Waldorf Astoria in Manhattan, which it acquired in a $1.95 billion deal in late 2014. The noteworthy property is currently closed for renovations.

Beijing-based Anbang is a holding company whose subsidiaries mainly deal with insurance, banking and financial services. Mirae provides comprehensive financial services, including asset management, wealth management, investment banking and life insurance.

— Kristin Hiller

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