Re­port says HK’s Gaw Cap eye­ing NY ho­tel

China Daily (Hong Kong) - - BUSINESS - By WIL­LIAM HEN­NELLY williamhen­nelly@ chi­nadai­lyusa.com

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 re­port­edly close to buy­ing the 338-room ho­tel, with floor-to-ceil­ing win­dows, at a dis­count.

The New York 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.

An­dre 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 and bev­er­age op­er­a­tion,” he said.

McCon­nell said the Stan­dard’s food and bev­er­age 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 food and bev­er­age 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 to­tal 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 ac­com­mo­da­tions-shar­ing mar­ket­place.

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 his US prop­erty ac­qui­si­tions, Chinese in­vest­ment in US real es­tate over­all is re­treat­ing, drop­ping 17 per­cent year-on-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 land­mark 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 Chinese main­land com­pa­nies in­vest­ing in overseas real es­tate will re­vive once the au­thor­i­ties re­lax re­stric­tions,” said An­drew Hask­ins, Col­liers In­ter­na­tional ex­ec­u­tive di­rec­tor of Asian re­search, in a re­port.

Hask­ins said that his firm ex­pected 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,” he added.

A sig­nif­i­cant com­po­nent of the value of the (Stan­dard) Ho­tel is the food and bev­er­age op­er­a­tion.” Thomas McCon­nell, head of Global Hos­pi­tal­ity Group, Cush­man and Wake­field, a real es­tate ser­vices firm. ru­mored price for the Stan­dard Ho­tel in New York

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