South Korea’s Mirae Asset Global Investments continues its aggressive global real estate expansion play with news breaking on Wednesday that it is acquiring a 15-property, 6,912-room luxury hotel portfolio from troubled Chinese investor Anbang Insurance Group for more than US$5.8 billion. While Anbang is selling off many overseas assets after being taken over by the Chinese government last year, this deal did not include the sale of the Waldorf Astoria in New York City, which it acquired in 2015 for US$1.95 billion.
The deal would be the biggest cross-border real estate investment by a South Korean company and solidify Mirae’s presence in the U.S. real estate market. It has previously invested in U.S. hotels, buying the Fairmont San Francisco Hotel in 2015 and the Fairmont Orchid hotel on the big island of Hawaii in 2016. More recently in July 2019, Mirae bought a skyscraper office tower in Paris.
Mirae prevailed in a process that began early this year and attracted widespread interest from private-equity and government-run funds. Interested parties reportedly included Brookfield Asset Management Inc. a consortium fronted by a former lieutenant to the U.K.’s billionaire Barclay twins.
“This project is the result of Mirae Asset’s continued effort in the overseas real estate market since 2003,” Choi Chang-hoon, head of the real estate unit at Mirae Asset, said in a statement released by its consultant on the deal, JLL. “We will continue to strive to provide investors with the opportunity to diversify their portfolio with core real estate assets located in key, global markets.”
Anbang bought the assets sold to Mirae today in 2016, which were formerly part of the Strategic Hotels & Resorts portfolio, from Blackstone Group for about US$5.5 billion. It has since invested more than US$400 million in the portfolio, according to JLL. Among the trophy assets in this deal are several California hotels such as Ritz-Carltons in Half Moon Bay and in Laguna Niguel, San Francisco’s Westin St. Francis, the Loews Santa Monica and the Four Seasons Silicon Valley in East Palo Alto. The portfolio also includes the Essex House overlooking Manhattan’s Central Park and the InterContinental hotels in Chicago and Miami.
The Wall Street Journal report that Anbang, while performing a routine title search, had to overcome the unusual stumbling block of having discovered a series of fake deeds to transfer ownership for up to six of the hotels. For example, one deed showed a transfer of ownership for Anbang’s Montage Laguna Beach hotel in California to a company known as Andy Bang LLC, according to California property records.
This deal marks Anbang’s further retrenchment in China after acquiring more than US$30 billion in international assets in recent years. Anbang’s former chairman, Wu Xiaohu, was later sentenced to 18 years in prison for fraud and embezzlement.