Picture 123RF/SEAN PAVONE
Picture 123RF/SEAN PAVONE

New York — New York’s shuttered Waldorf Astoria will re-emerge this week as a condo building, testing whether nostalgia for a cherished landmark can spark high-dollar deals in a market glutted with luxury homes.

The Park Avenue property, a high-society hangout that has counted Frank Sinatra and Marilyn Monroe as tenants, has been getting primed for this moment since 2015. That’s when China’s Anbang Insurance Group bought it for a record $1.95bn with plans to convert a portion of the 1,400-room hotel into for-sale apartments.

Five years later, the Waldorf is still a construction zone, Manhattan is awash in ultra-luxury condos and the property’s once high-flying owner has had its wings clipped. Units will not be ready until 2022, but the developer says the time is right to let the condo-buying public have a look. Their chance will come Tuesday, when a sales office with a model apartment opens.

“So many people — from New York, from all over America — have been inquiring and are very interested in owning a piece of something that could never be owned before,” said Dan Tubb, who is overseeing sales at the site for Douglas Elliman Development Marketing. “We know the market is what it is, but we’re seeing a level of passion and interest for the building that no other building really possesses.” 

The data will tell you that this is not the time for another Midtown luxury condo
Donna Olshan, president of Olshan Realty

The developer, now known as Dajia Insurance Group, is pouring more than $1bn into renovations as it tries to recoup a bet made at the top of Manhattan’s luxury condo market, when overseas investors were clamouring to buy second and third homes in new skyscrapers that were rising nearby.

But high-end condos have proliferated since then, and the multimillionaires who can afford them have all but lost interest. In Manhattan’s Midtown alone, 763 new units are expected to become available this year, figures from the brokerage Core show.

“The data will tell you that this is not the time for another Midtown luxury condo,” said Donna Olshan, president of Olshan Realty, a high-end brokerage based in Manhattan. The area “is saturated with inventory that could take a decade to sell.”

Dajia says its strategy is to deliver smaller units, offering a taste of opulence to investors who are not searching for a primary residence. More than two-thirds of the condos being marketed at the Waldorf have two bedrooms or fewer, Tubb said, and the cheapest is a studio listed at $1.7m. Two-bedrooms start at $4.75m for a unit on the 19th floor.

Residents will get all the perks available to hotel guests — from room service to cleaning to concierge bookings. They will have their own 25m lap pool, children’s playroom, screening theatre and a choice of spaces they could use to throw a party. A portion of the hotel’s roof will be re-imagined as a garden.

“I really believe, because of the unit mix, because of the heritage of the building and the personal experiences that people have had with it, that we’re going to be successful injecting buying energy into this market,” Tubb said.

But even Dajia is keeping things flexible. While plans call for 375 condos, only 75 are being marketed to start. The developer did not provide pricing estimates on the other units, including two duplex penthouses in the building’s copper pinnacles, according to the offering plan filed with the state.

Anbang spending spree

Anbang was little known in the US when it bought the Waldorf in a deal that set a price record for a stand-alone hotel. The firm did not remain obscure for long, scooping up billions of dollars worth of other real estate and insurance assets.

That spree ended abruptly in 2018 when Chinese authorities took control of the company and jailed its chair for fundraising fraud. Anbang began paring investments, including a $5.8bn portfolio of US luxury hotels. The Chinese government created Dajia to house many of Anbang’s remaining assets, and released the firm from its custody on February 22.

When the Waldorf hotel re-opens in 2022, it will have 375 rooms, far fewer than the version that made it a household name. The smaller room count makes it easier to deliver the level of service luxury guests expect, said Dino Michael, the global head of the Waldorf brand for Hilton Worldwide Holdings, which has a long-term contract to manage the property.

Common areas such as the hotel’s famed Park Avenue lobby and grand ballroom will remain familiar to past guests — an illustrious group that includes US presidents, celebrities and business executives. Combining modern finishes with the Waldorf’s rich history will make the property “the unquestioned trophy asset of New York hospitality when it re-opens”, said Andrew Miller, CEO of Dajia’s US arm.

Dajia intends to retain ownership of the hotel, Miller said.

Nostalgia could also spur condo sales at the tower, even in this market, said Charlie Attias, a luxury real estate broker who previously found buyers for more than 40 apartments at the Plaza, a Manhattan hotel that re-invented itself as a condo building more than a decade ago.

Attias, now a broker with Compass, got a call last month from a client in Geneva, who used to stay at the Waldorf whenever he would come to New York for business and pleasure. The notion of owning a piece of that personal history appealed to him, Attias said: “People love the memories.” 

Bloomberg