If you often pay attention to current political news in Vancouver, everyone will be familiar with this name: Cheng Muyang. He is a "Canadian real estate tycoon" who owns real estate in many places and calls for wind and rain, but the "red notice" issued by China's Ministry of Public Security in 2014 revealed his true colors.
According to official Chinese information, Cheng Muyang took advantage of his position to embezzle, steal, or illegally occupy state-owned assets by other means, constituting a crime of embezzlement. Concealing, transferring, acquiring, or acting as an agent for the sale of property that is known to have been obtained through crime.
Cheng Muyang helped his father Cheng Weigao, Li Zhen, the secretary of the Hebei Provincial Party Committee, transfer stolen money and colluded with others to embezzle state assets of ¥5.35 million. On September 4, 2000, Cheng Muyang left Hong Kong and fled to Canada, and the information shows that he was naturalized in Canada in 2020. Because of his citizenship and other reasons, Cheng Muyang has not been repatriated to China.
However, the "sharing of corrupt officials' illegal assets" agreement signed between China and Canada made Cheng Muyang's large assets in Greater Vancouver no longer in his own hands, thus making the fate of the "real estate tycoon" take a sharp turn.
A hotel worth nearly 100 million yuan was recently auctioned
A few days ago, a piece of news once again aroused everyone's attention to this former red notice criminal: the Versante Hotel in Richmond, owned by Cheng Muyang, was auctioned and reported by major media.
Located right on Bridgeport Rd in Richmond to YVR Airport, the Versante Hotel is a 100-room hotel with a foreclosure price of $98 million. Without a doubt, this is one of the most expensive foreclosure homes in Metro Vancouver history.
Court documents point out that after the "liquidation" of the property, Cheng owed nearly $80 million in debt to the Versante Hotel. The Versante Hotel, which was only completed in 2021, is part of Cheng's International Trade Centre, an international trade centre in Richmond.
In addition to the hotel, the International Trade Center has two office buildings, and the news did not mention the current condition of the two office buildings or whether they were also subject to auction.
It is worth mentioning that the Versante Hotel is not an "illegal property" mentioned in the Red Notice, but a new property invested and built by Cheng Muyang through his business operation in Vancouver.
In January 2023, Cheng Muyang also accepted an exclusive interview with Vancouver media, saying frankly, "After experiencing the most difficult period in my life, I still invested in the construction of the International Trade Center and the Versante Hotel, because I want to overcome difficulties." ”
During this period, Cheng Muyang also confessed to the media that he had submitted a refugee claim, but it was rejected by Canada. In addition to its own lack of funds, the hotel's opening coincided with the peak of the epidemic, and Canadian lenders considered Cheng Muyang to be "politically sensitive" and were reluctant to get too much involved in the project, making it difficult for the hotel to continue.
Cheng Muyang finally got a total loan of $35.8 million through multiple institutions in June 2021, and revised the loan agreement three times in one year, extending the repayment period twice, but in the end, Cheng Muyang was still unable to repay the loan on time, and finally the hotel was auctioned off because of default.
In 2024, after investigating and collecting evidence, the court found that Cheng Muyang's total loan arrears were far more than $35.8 million, and the total amount of the loan reached $79.6 million!
The hotel declares that it will not be closed and will not be temporarily closed
Through booking websites such as Expedia, it was found that the Versante Hotel is still open for business, for example, rooms can be booked in a few days, and the price is more than $350 per night, which is a high-end hotel.
As you can tell from the booking page, the Versante Hotel is a new 4-star boutique hotel with high-end interiors and large rooms – 355 square feet in the standard rooms.
Versante also issued a statement: "We are following the shareholder dispute and we are going through a sale, but this will not affect the daily operations of the hotel and will not be temporarily closed." ”
However, the Versante Hotel did not talk about more details, let alone Cheng Muyang's past experience, but tried to downplay the auction. At the same time, the Versante Hotel is still on the market because "this is a very scarce high-end boutique business hotel in Metro Vancouver." ”
Laura Baxter, director of hotel analytics at CoStar Group, agrees that the foreclosure event will not have much of an impact on Versante's hotel operations, as "they just achieved record revenue in 2023 and are one of the best hotels near the airport." ”
Can it be successfully sold? There are not many recent cases
Laura Baxter, director of hotel analytics at CoStar Group, said: "It's hard to say because there have been so few examples of luxury hotels for sale in Vancouver in recent years, and they were mostly before the pandemic. ”
For example, in 2017, the Rosewood Hotel Georgia, a landmark hotel in downtown Vancouver, was sold for $145 million, and in 2016, the InnVest Hotel purchased a lease interest in Fairmont for $90 million.
The only post-pandemic transaction record was the 2021 Ramada Vancouver Airport: sold for $17.75 million. It should be noted that the average room sale price at the Ramada Hotel is only $233,000, and even the Rosewood Hotel is only $930,000 per room.
The average price per room at the Versante Hotel is $980,000. Inflation, rising home prices, and large guest rooms are important, but if they are more expensive than Rosewood, will buyers find them less cost-effective?
And, on the aforementioned "politically sensitive" issue, will potential buyers be suspicious of the hotel's operational prospects because of Cheng Muyang's status as a red notice?
But let's not forget the good news: B.C.'s crackdown on short-term rentals has led to a significant reduction in the number of short-term rental options on the market, leading to higher hotel costs. If the buyer sees the right time to acquire the Versante Hotel, there may be a good rate of return.
Of course, for the average traveler, the Versaante Hotel will still be a good choice for accommodation near the airport, as long as the rate of room does not rise rapidly as a result.