Hilton Worldwide announced Tuesday that it closed its sale of the Waldorf Astoria New York to Anbang Insurance Group Co. for US$1.95 billion. At the same time, it also signed agreements to use the proceeds of the sale to acquire five landmark properties.
The hotels acquired by Hilton for US$1.76 billion: Hilton Orlando Bonnet Creek in Florida; Waldorf Astoria Orlando; The Ranch – A Waldorf Astoria Resort in Key West, Florida; Casa Marina – A Waldorf Astoria Resort in Key West; and Park 55 in San Francisco.
The 1,024-room Parc 55 will be a new addition to the Hilton Hotels & Resorts brand that will be managed by Hilton. The other acquired hotels are currently managed by Hilton. Additionally, Hilton will continue to operate the Waldorf Astoria New York under a 100-year management agreement.
“These transactions will enable us to unlock the embedded value of the Waldorf Astoria New York and acquire great institutional quality assets that we expect will drive significant incremental value for the company,” said Christopher Nassetta, president and CEO of Hilton Worldwide. “Our relationship with Anbang will ensure the Waldorf Astoria New York will continue to be a marquee hotel for the Waldorf brand long into the future, and will enable Hilton Worldwide and Anbang to build on the hotel’s rich legacy and traditions.”
Commenting on the news, David Loeb, senior research analyst at Robert W. Baird, said, “We have a positive view given that the five identified properties will be acquired at an attractive forward valuation and should provide a signficant earnings boost to the company once the transactions close later this month.”