A discussion of Chinese real estate investment in the US should include two of the most significant, groundbreaking transactions in the hotel sector: Anbang Insurance’s purchase of the Waldorf Astoria, and Sunshine Group Insurance’s purchase of the Baccarat Hotel.
As reported, the Anbang transaction involved the highest price ever paid for a hotel property in US history. In Sunshine Group’s purchase, we saw the highest price per room ever paid for a hotel in the US. The author’s law firm was involved in both of these landmark deals.
Beyond historic, the Anbang deal was so high-profile because it also touched on issues relating to national security. The Committee on Foreign Investment in the US (CFIUS) stepped in to review the transaction because the residence of the US Ambassador to the United Nations has always been located in the hotel. US presidents have also stayed there on visits to New York since the hotel’s completion in the 1930s.
CFIUS reviews, investigates, and can block any transaction that would result in the control of a US business or asset by a foreign purchaser that raises serious national security risks. The closing of the deal was delayed for several months due to the CFIUS review. The transaction was ultimately approved and the sale closed only after the CFIUS review was completed.
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Robert J. Ivanhoe is a shareholder in the New York office of Greenberg Traurig and the firm’s global real estate practice chair. He can be contacted on +1 212 801 9333 or by email at firstname.lastname@example.org