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Anbang Finds Potential Buyer For $5.5B Hotel Portfolio

The Westin St. Francis hotel, San Francisco

A frontrunner has emerged in the race to buy Anbang Insurance Group's multibillion-dollar portfolio of luxury hotels.

South Korea-based Mirae Asset Financial Group has emerged as the leading bidder for the 15-hotel portfolio Anbang is attempting to sell, Bloomberg reports. The Chinese investment giant purchased the portfolio, including the Westin St. Francis in San Francisco and Essex House in New York, from Blackstone Group for $5.5B in 2016.

Mirae Asset is negotiating a price slightly above what Anbang paid in 2016 and lining up the financials to pay it, but has not secured exclusivity and is still facing pressure from at least one competitor, Bloomberg reports. Brookfield Asset Management, Singaporean sovereign wealth fund GIC and SoftBank's Fortress Investment Group were among the rumored suitors as of May.

Even Blackstone has expressed interest in buying back into the portfolio. The multinational investment giant had only owned the hotels, which it acquired when it bought Strategic Hotels & Resorts, for three months before Anbang offered a deal reportedly too good to turn down.

Anbang was perhaps foremost among a group of China-based investors that spent lavishly on U.S. and European real estate in the years leading up to a crackdown from the Chinese government in early 2018. The state seized control of Anbang and sentenced its former chairman, Wu Xiaohui, to 18 months in jail for fraud and embezzlement.

Since China's stance on foreign investment changed, investors from the country have been net sellers of property in the U.S., and the ongoing trade war between the two governments makes a reversal of that trend anytime soon unlikely.

The Waldorf Astoria Hotel in Midtown Manhattan, which Anbang purchased for nearly $2B in 2015 as part of its spree, has not been included in any sale discussions, Bloomberg reports. Anbang is converting hundreds of those hotel rooms to luxury condominiums, and sales are expected to launch this fall.