Apparent opposition by U.S. security officials has scuttled an important piece of Blackstone’s US$6.5 billion sale of Strategic Hotels & Resorts to China’s Anbang Insurance Group Co. – the sale of the Hotel del Coronado near San Diego and the major U.S. Naval Base Coronado.
Multiple reports have suggested that people with knowledge of the deal said concerns were raised by the Committee on Foreign Investment and caused the sale of the property worth about US$1 billion (assessed value of US$588 million) to be stopped, which reportedly delays Blackstone’s ability to cash out of its Strategic purchase at a profit.
Blackstone acquired Strategic last December for about US$6 billion and in March agreed to quickly flip the assets to Anbang, which reportedly closed on 15 of the 16 assets last month, for US$6.5 billion.
The Naval Base Coronado has eight installations that lie on either side of the hotel, including an air station, amphibious base, landing fields, radio receiving facility and warfare training center. It’s one of the main training grounds for the special-operations Navy SEALs.
Anbang, which famously stepped away from the Starwood bidding war earlier this year, set a record for a single U.S. hotel acquisition with its February 2015 purchase of New York’s Waldorf Astoria for US$1.95 billion, a deal that cleared governmental security reviews.