Chinese corporation Anbang Insurance Group is reportedly preparing to extensively overhaul New York’s world-famous Waldorf Astoria Hotel, in order to convert two-thirds of its guest rooms into private condos.

According to several US news sources, the hotel will close in Q1 2017 and could remain shut for as long as three years. The decision to create luxurious new private residences would be likely to boost short-term returns for Anbang, which bought the hotel from Hilton in 2014 at a cost of S$2bn (€1.8bn, £1.5bn).

Anbang is reportedly ready to retain between 300 and 500 hotel rooms and upgrade them to create a focused and more compact luxury hotel for international travellers. The project could cost as much as US$1bn (€904m, £747.5m). Hilton, which still manages the property as part of the ownership deal, would continue its operating role.

Millionaire William Waldorf Astor opened the first Waldorf Hotel in 1893 on the site of his Park Avenue mansion, and it soon became known as the most glamorous hotel in the world. Following a raft of technological advancements in construction, the building was demolished in 1929 and rebuilt two years later in its current guise – a 47-storey Art Deco landmark designed by architects Schultze and Weaver.

US President Herbert Hoover hailed the hotel, then the tallest in the world, as evidence of “the measure of the nation's growth in power, in comfort and in artistry...and an exhibition of courage and confidence to the whole nation.” It is better known in popular culture for its lavish parties and celebrity guests.

The Waldorf Astoria includes a 19th floor Guerlain Spa, with views over Midtown Manhattan.

Earlier this year Anbang came close to buying hotel brand Starwood, before being pipped to the post by Marriott International.