Chinese money isn't the only capital making waves in the U.S. hotel market. South Korea has joined the party—and then some.
Reports have surfaced that South Korea's Lotte Group is positioned to acquire the New York Palace Hotel, in midtown Manhattan's, for $805 million, or around $885,000 per key, but well off the record $2 million per key Sunshine Insurance paid for the Baccarat Hotel earlier this year.
The seller of the New York Palace is New York-based real estate investment firm Northwood Investors, which recently pumped in millions to renovate the hotel, via an assortment of star-studded designers. It has owned the hotel since 2011, having acquired it from the Sultan of Brunei when it was run under the Dorchester Collection.
Lotte Group has certainly been a player of late. In March, it announced it was developing a $140-million hotel in St. Petersburg, Russia.
"Hotel Lotte is a company that has been actively entering markets abroad," a spokeman for Lotte told Reuters. "We have continuously been looking for fitting M&A opportunities and we have found one in New York with symbolic significance."
Lotte has been expanding outside South Korea since 2010. Based in Seoul, it has a portfolio of 15 hotels, according to its website, spread across the U.S. (Guam), Russia, Vietnam and Korea.
According to CP Executivem, Lotte is currently building three hotels in China and one in Myanmar. Lotte operates two brands: Lotte Hotels & Resorts and Lotte City Hotels. The company is aiming to have 40 hotels in operation by 2018.
The potential Lotte acquisition is one in a string of U.S. gateway-city hotels being bought by foreign capital. In addition to the aforementioned Baccarat, the most newsy was the recent acquisition of the Waldorf Astoria in New York by Chinese insurance group Anbang.
It's also another deal involving capital inflows from Korean shores. South Korea's Hanjin Group, a conglomerate with $36 billion in assets among its 23 subsidiaries, including Korean Air Lines Co., is making a big bet on downtown Los Angeles, as his group is heading the development of what is reported to be the tallest building west of the Mississippi, a $1-billion downtown hotel complex, which will include the the 73-story, 900-story Wilshire Grand Hotel.