- Associated Press - Tuesday, January 4, 2011

LOS ANGELES (AP) — The Sheraton hotel that looms over Universal City’s studios and theme park is being purchased by Chinese real estate firm Shenzhen New World Group Co., a company official said Monday.

The Sheraton Universal Hotel’s purchase by Shenzhen New World Group Co. is set to close on Wednesday, said Daniel Teng, an executive with the company’s U.S. operation.

He would not discuss the sale price. The 20-story hotel and its surrounding property was last assessed at $123.3 million, according to county records.

Teng said his company, which in March purchased a 469-room Marriott hotel in downtown Los Angeles, plans to spend about $5 million to renovate the Sheraton’s pool area, meeting rooms and other public spaces.

The hotel’s previous owner, Lowe Enterprises, spent $25 million on guest room renovations and other updates after buying the property in 2007. The hotel fell into receivership early last year due to financial troubles suffered by Lowe as the recession put a dent in occupancy rates.

Teng said his company pounced on the hotel because of its location near the popular Universal Studios Hollywood theme park, which he predicted would draw more visitors as the U.S. economy rebounds.

“We think the U.S. economy is going to be improving in a very short time,” he said. “We would like to be at the right place at the right time.”

He said the company is considering other acquisitions in U.S. cities over the next couple years.

A message left with Newport Beach-based Rim Hospitality, which has been managing and marketing the hotel while in receivership, was not returned.

The hotel tower is a familiar site to drivers taking U.S. 101 between Hollywood and the San Fernando Valley and is a popular destination for Southern California vacationers.

Baizhu Chen, a finance and business economics professor at the University of Southern California, said Shenzhen New World appears to be leveraging the United States‘ depressed property values to cash in on business from the flood of tourists expected from an increasingly affluent China.

Some 100 million Chinese residents are expected to travel overseas by 2020, according to Chinese government figures cited by Chen, many of whom will likely make their way to the United States.

“If people want to invest in the real estate market in Southern California, the best entry is getting a hotel because Chinese tourism in the next few years will be humongous,” he said.

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