Inside the Super-Fast, 100-Year Deal for the Waldorf

The $1.95 billion sale of New York’s Waldorf Astoria hotel, announced on Oct. 6, is mostly framed as the 2014 analogue to Japan’s Mitsubishi Estate Co. buying Rockefeller Center—the moment that removes any doubt that China, and Chinese investors, are for real. Yet it’s remarkable for two less noted reasons, too: the incredible speed with which the deal got done, and the way it increases Blackstone Group’s already record-breaking paper profit on its 2007 purchase of Waldorf Astoria owner Hilton Worldwide Holdings.

Only a month ago, real estate investment bankers at Eastdil Secured were putting together a selling memorandum about the Waldorf for Hilton and Blackstone’s head of real estate, Jonathan Gray. Anbang Insurance Group, a 10-year-old Chinese insurance company, meanwhile, had been looking for a major real estate investment in New York, and caught wind that the Waldorf might go on the market. Anbang approached Blackstone on a preemptive basis and Gray decided to give the Chinese insurer the pole position on the sale not only because it was willing to pay a full price, but also because it was amenable to renovating the hotel and hiring Hilton to manage it.