Baccarat Hotel New York has yet to see a single host but is about to become the most popular in the US hotel after a Chinese insurer agreed to buy more than $ 230 million.
Sunshine Insurance Group Co. is paying mogul real estate firm Barry Sternlicht's and more than $ 2 million outside the Midtown Manhattan property, according to people familiar with the matter partner.
One person said that the valuation exceeds the previous record set by the Plaza Hotel, the symbol of New York which was sold in 2012 to Sahara India group $ 2.04 million of a room, according to the monitoring data Hotel STR Analytics.
Baccarat is the last trophy property end up in the hands of Chinese investors in recent months as buyers take advantage of the new rules that allow them to invest more easily abroad. The real estate brokers and analysts said that Chinese companies see luxury hotels, especially in major world capitals, such as long-term investments that can provide stable income in a period of low interest rates. Moreover, some say that the properties confer prestige to their owners.
"The Chinese are buying insurance for 50 or 100 years, and are not concerned about the value goes down on markets such as New York," said Ryan Meliker, hotel analyst for the investment bank MLV & Co. "It's a great place to park money in the long term. "
China Anbang Insurance Group Co. in October agreed to pay $ 1.95 billion for Hilton Worldwide Holdings Inc. by the famous Waldorf-Astoria on Park Avenue in New York. China, property investor Dalian Wanda Group Co. last year put $ 900 million into a skyscraper in Chicago with a luxury hotel. Chinese investors also bought hotels in Sydney, Washington and Los Angeles, in the last year.
Broker JLL believes Chinese companies will spend more than $ 5 million in hotel investments abroad this year, up from $ 920 million last year and $ 130 million in 2012.
The recent liberalization of the Chinese government rules that had limited corporate investment abroad is helping to boost sales said Gilda Perez-Alvarado, director of the Americas for the global hotel group JLL.
Under the new rules, Chinese companies can invest up to $ 1 billion without seeking government approval, compared with $ 100 million before changes last year.
Mr. Sternlicht Starwood Capital Group LLC built luxury hotel and condominium project with high-end Tribeca Associates, a developer of real estate in New York. The two have not revealed how much they spent on the project. Starwood, which acquired the French crystal manufacturer Baccarat in 2005, will continue to manage the hotel of the same name.
Starwood Mr. Sternlicht founded in 1991 and has become one of the largest investment companies in the world. He was also CEO of Starwood Hotels & Resorts Worldwide Inc. before leaving the company in 2005.
The property offers 114 opulent rooms 15,000 pieces of crystal glasses and 17 Baccarat chandeliers factory in France. Minibars are full of gifts of Parisian gourmet store Fauchon, and the establishment has a spa that offers six types of facials. Suites are expected to cost up to $ 18,000 per night.
Baccarat is scheduled to open its doors next month. It is unusual for a buyer to agree to a deluxe property has no history and no guarantee can get the $ 900 to $ 1,000 per night Starwood plans to charge for standard rooms.
That makes it a more speculative investment the Plaza Hotel, which has been operating for over a century.
"This only occurs under conditions of very strong market," said Sean Hennessey, CEO of accommodation Advisors, a consulting firm hotel. Because hotels are not preleased as office buildings, the risk of filling rooms now the new owner, rather than the developer, said.
Some brokers said that if the Baccarat can charge what they expected, the hotel could be worth more than what the sun is paying. The hotels are also the most resistant type of property inflation and room rates can be reset at any time.
A luxury hotel like Baccarat must produce the annual adjusted operating profit of around 3% to 4% of the purchase price, or approximately twice the performance of 10-year notes US Treasury said Mr. Meliker analyst MLV.
There are also strategic reasons for closely held Sol to buy before the opening, Hennessey said. The company gets a new asset at a crucial market without having to wait years to develop a similar property.
This is not the first wave of foreign purchases of US commercial real trophy. Japanese conglomerates were big buyers during the 1980s, and there has been a steady stream in recent years of petrodollars in the Middle East and Asian government funds.
Chinese insurers have been particularly active hotels and other real estate purchase abroad. Only about 1% of the assets of these insurers are in real estate, JLL said Ms. Perez-Alvarado, who expects that number to climb closer to 4% who say it is more common among Western insurers.
Sol was established in 2005 as an insurance company property and casualty, and then add a unit of life insurance and asset management arm. Their website says the company has more than 130 million customers. In November, Sun agreed to pay $ 380 million for a Sheraton hotel in Sydney.
Baccarat The sale would a record year for the hospitality industry. US hotels had their highest average daily rate for every $ 115 per night and revenue per available room of $ 74, according to STR. Leisure travel remained strong, while group travel rebounded 4.4% in 2014 after a decline of 0.7% in the previous year.
Scott Berman, head of the Entertainment Group at PricewaterhouseCoopers LLC, said that 2015 is just as strong. He points to an improvement in the US economy with the help of falling oil prices, the strength in new business and continued limited supply in most cities.
In 2013, foreign buyers invested $ 229 million in hotels in Manhattan, just 12% of total investment for that year. Last year, foreign investors accounted for $ 1.9 billion, or 58% of total hotel investment of Manhattan, according to JLL.
The sale Waldorf Astoria only match all foreign hotel investment last year in Manhattan. Anbang is expected to close its deal to acquire the property milestone sometime during the first quarter, according to people familiar with the matter. The price tag of $ 1.95 billion, or about $ 1,400,000 a room, would be the highest overall price paid for a US hotel. Broker Eastdil Secured advised the sellers in sales of Baccarat and Waldorf.