Hip ho­tel in New York could get scooped up by HK buyer: re­port

China Daily (Canada) - - ACROSS AMERICA -

The Stan­dard Ho­tel, a sym­bol of chic in Man­hat­tan’s Meat­pack­ing District, could be go­ing to a Chi­nese buyer.

Hong Kong-based Gaw Cap­i­tal Part­ners is close to buy­ing the 338-room ho­tel with floor-to-ceil­ing win­dows at a dis­count, ac­cord­ing to the New York Post.

The Post cited sources say­ing that a fund con­trolled by Good­win Gaw, 48, and his brother and sis­ter — will pay $340 mil­lion for the prop­erty that over­looks the High Line, a pop­u­lar city park and tourist at­trac­tion.

The ru­mored price for The Stan­dard is $60 mil­lion less than what it was re­port­edly go­ing for in 2014. That year, the ho­tel’s par­ent Stan­dard In­ter­na­tional con­tracted to buy the ho­tel from Dune Cap­i­tal Man­age­ment and Green­field Part­ners, but the deal was not con­sum­mated.

An­dré Balazs, the noted hote­lier who founded the Stan­dard brand, still owns 20 per­cent of Stan­dard In­ter­na­tional.

“Gen­er­ally speaking, the re­ported price is about what I would have ex­pected for the prop­erty – based on other ho­tel sales over the past few years, re­place­ment costs and the sig­nif­i­cance of the prop­erty in the Meat­pack­ing District sub-mar­ket,” Thomas McCon­nell, head of real es­tate ser­vices firm Cush­man and Wake­field’s Global Hospi­tal­ity Group, told China Daily via email.

“One ob­ser­va­tion is that a sig­nif­i­cant com­po­nent of the value of the ho­tel is the food & Wil­liam Hennelly bev­er­age op­er­a­tion. The Stan­dard’s f&b out­lets do very well and are a cen­tral com­po­nent of the prop­erty’s suc­cess as a life­style prop­erty. Many sim­i­lar ho­tels in NYC have dif­fi­culty squeez­ing much profit out of their f&b op­er­a­tions, but the Stan­dard seems to have found the for­mula.”

Gaw’s in­ter­est comes as a mar­ket­ing sur­vey by ho­tel data firm STR shows that nearly 16,000 new ho­tel rooms will join the in­ven­tory in New York, which al­ready is at an all-time high of more than 115,000 rooms. Ho­tels in New York face greater com­pe­ti­tion from that new sup­ply and the om­nipres­ence of Airbnb, the on­line ac­com­mo­da­tion­sshar­ing mar­ket­place.

The Stan­dard’s web­site says the ho­tel of­fers “sweeping views of Man­hat­tan and/ or the mighty Hudson River. The ho­tel’s invit­ing and scin­til­lat­ing pub­lic spa­ces in­clude a bustling Ger­man beer gar­den at ground level, the rooftop dis­cothèque Le Bain, the leg­endary Top of The Stan­dard, and an out­door pub­lic plaza with ro­tat­ing art in­stal­la­tions and a win­ter ice rink.”

The Stan­dard made news of a bawdy kind in 2009, when guests were spot­ted by park go­ers (through those floor-to­ceil­ing win­dows) hav­ing sex.

Gaw Cap­i­tal Part­ners USA has more than $2.7 bil­lion in as­sets un­der man­age­ment — in­clud­ing Los An­ge­les’ Hollywood Roo­sevelt Ho­tel, and one of Gaw’s in­vest­ment funds re­cently bought the Mar­riott City Cen­ter in Oak­land, Cal­i­for­nia.

Gaw once had stakes in New York at 123 Wil­liam Street, 218 18th Street and 285 Madi­son Av­enue, which it has since sold, ac­cord­ing to The Real Deal web­site.

In March, UK-based For­eign Di­rect In­vest­ment Awards picked Gaw for FDI Deal of the Year, not­ing that “their com­mit­ment to trans­form­ing 123 & 151 Buck­ing­ham Palace Road is an out­stand­ing ex­am­ple of adding strate­gic value”.

While Gaw con­tin­ues US prop­erty ac­qui­si­tions, Chi­nese in­vest­ment in US real es­tate over­all is ebbing, drop­ping 17 per­cent year over year to $4.7 bil­lion in the first half of 2017, ac­cord­ing to Real Cap­i­tal An­a­lyt­ics.

An­bang In­surance Group, which bought the famed Wal­dorf As­to­ria New York ho­tel in 2014 for $1.95 bil­lion, has closed the land­marked build­ing for ren­o­va­tions that will turn it into a con­do­minium/ ho­tel.

But An­bang has since scaled back its FDI for­ays, as have giants Dalian Wanda Group, Fo­sun In­ter­na­tional and HNA Group Co Ltd, as they face scru­tiny in China.

Chi­nese reg­u­la­tors want to de­ter­mine how much debt the main­land com­pa­nies have used to fund their buy­ing sprees and whether they are over­lever­aged and pose a sys­temic fi­nan­cial risk.

Still, Chi­nese in­vestors are ex­pected to main­tain an in­ter­est in the US real es­tate mar­ket.

“Over­all, we be­lieve that the long-term trend of main­land Chi­nese com­pa­nies in­vest­ing in over­seas real es­tate will re­vive once the au­thor­i­ties re­lax re­stric­tions,” wrote An­drew Hask­ins, Col­liers ex­ec­u­tive di­rec­tor of Asian re­search, in a re­port ti­tled Fact or Fan­tasy: 2017 — The Year In Which Asian Prop­erty Cap­i­tal Flows Re­verse.

“Af­ter all, in­ter­na­tion­al­iza­tion of the ren­minbi and ex­pand­ing China’s global in­flu­ence are two of the pri­or­i­ties of the cur­rent ad­min­is­tra­tion.”

Hask­ins said that “we ex­pect the pace of Chi­nese in­vest­ment in the US to mod­er­ate … but do not an­tic­i­pate a sharp fall. Care­fully con­sid­ered in­vest­ment in US prop­erty can of­fer Chi­nese en­ter­prises both rea­son­able re­turns and di­ver­si­fi­ca­tion of risk.”

Con­tact the writer at williamhen­nelly@chi­nadai­lyusa.com

WIKI­ME­DIA COM­MONS

The Stan­dard Ho­tel sits above the High Line park in Man­hat­tan’s Meat­pack­ing District.

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