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NYC Top Market for Global Investors

Oct 16, 2014

The sale of the Waldorf Astoria to a Chinese Investor is another indication that New York City is a top investment market for global investors.
Gateway cities remain attractive buying opportunities for foreign investors looking for a safe haven to invest. If the geopolitical climate continues to remain unstable, I would expect to see this trend continuing. Specifically as it relates to the Chinese investor, the growing Chinese economy combined with a greater access to credit should continue to support increased investment in gateway cities across the U.S. (including Los Angeles, San Francisco, Chicago) and worldwide. The increase in wealth in the global community including Russia, China, and the Middle East and the desire to invest in “safe” investments will continue to support trophy asset purchases throughout the U.S.
With respect to the hospitality sector, the sale of the Waldorf for approximately $1.4 million per key creates a benchmark for the industry, slightly below the purchase of the Setai Fifth Avenue for $1.5 million per key. The Waldorf will reportedly undergo a significant renovation so the all-in cost per key of the Waldorf might very well be the highest price paid per room.
Starwood Capital Group is rumored to be in the market to sell the hotel portion of the newly developed Baccarat Hotel & Residences for $2 million a key. Perhaps not such a stretch after all given that Hyatt Hotels Corporation paid $390 million for a 100% stake in the Park Hyatt Hotel component of Extell Development’s One57 tower project, equating to approximately $1.8 million a key.
I expect to see continued interest from foreign investors in the hotel sector as what once was considered an 'alternative' real estate sector is being accepted as more mainstream, since it offers attractive returns and increasing security for the investor.

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Deborah S. Friedland

Deborah Friedland specializes in in operational strategy analysis, asset management, valuation, internal control review and assessments, market studies, and transactional due diligence for investors and lenders.

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