The iconic Waldorf Astoria hotel in New York will soon undergo a $1 billion condo conversion, said its new owner, Anbang Insurance of China.
The hotel, which features 1,400 rooms, will be closed for more than a year while it is converted to luxury apartments, CNN Money reported
While many details of the renovation haven't been finalized, about three-quarters of the rooms will to be converted to private apartments, leaving 300 to 500 guest rooms, The Wall Street Journal reported
. The changes will eliminate hundreds of jobs for hotel workers, and the company will pay $100 million or more in severance.
Anbang bought the hotel from Hilton in 2015 for $1.95 billion.
The 85-year-old landmark occupies a full city block on Park Avenue and is known worldwide for its lavish parties and famous guests, including every president since Herbert Hoover.
The renovated tower reportedly will target a very exclusive market of buyers.
"We expect a good return with our Waldorf investment," Anbang CEO Xiaohui Wu reportedly said at Harvard University in 2015. "To achieve the high value-creation, we plan to renovate the two towers into luxury residential apartments with world class amenities and finishes to reflect its culture and social status. A potential buyer needs to have more than money to qualify for our apartments."
The plan makes sense at a time when the company faces regulatory scrutiny over its liquidity and business model and the New York hotel market appears headed for a slowdown, The Real Deal noted
“It would make sense that they are converting a portion of the guest rooms to condos, given their high cost basis,” hospitality consultant Steven Kamali told the real estate publication. “This would be a thoughtful way to… make the investment plausible.”
The Plaza Hotel, another landmark hotel in Manhattan, was converted to condos a decade ago.
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