With improvements, that works out to be about $200,000 per room. It’s a 42 year-old property and they are not going to be able to charge the rates needed to make it work out.
Could be that the Chinese business simply wants to put the money where the Chinese government can’t get to it.
I had a similar thought. We often finance branded hotel improvements and this sale is way above market, even given the name, location, and improvement potential. They’re going to be in $200 million for a 1,000 room hotel! I’m sure the previous owner saw the price and SPRINTED with the money bags to the bank.
I worked a deal with a Chinese national a few months ago where he had several million dollar properties around LA, all paid with cash. We couldn’t work with him because he wouldn’t let us secure on a piece of real estate since all of his liquid assets (and citizenship) were in China...according to him.
Having worked with Taiwanese imports and foreigners who exported back to their countries (mostly Africa and Middle East), I knew how easily our collateral could end up in a container back to China, so securing on real estate was the only option.
analysis seems correct
the reason could also be insanity
but your hypothesis is more than plausible.
Heh, depends on the type of "tourism". See post 7.
The business channel had a China investments expert on around two weeks ago. He said that Chinese have very few areas to invest their money into....ten percent of the options that you or I would have. So they end up with lots of cash, and throwing traditionally at Chinese investments of a very questionable nature. So, it only makes sense....take the bulk Chinese capital out of China, and invest it (even at stupid pay-offs) in western countries. At least the money is safe and paying something.
Many of these Chinese corporations are owned by the Chinese government. What do we actually know about this company anyways