A deal by China’s Anbang Insurance Group Co. to purchase a landmark Southern California hotel near a major naval base from Blackstone Group LP was called off following opposition from U.S. national-security officials, according to people with knowledge of the decision.

Blackstone ended the sale of the Hotel del Coronado near San Diego, estimated to be worth about $1 billion, after concerns were raised by the Committee on Foreign Investment in the United States, according to the people, who asked not to be identified because the sale process is private. The interagency body, led by the Treasury Department, reviews acquisitions of American businesses by non-U.S. entities for national-security risks.

The hotel, where the 1959 Billy Wilder comedy “Some Like It Hot” was filmed, is one of the most valuable of the 16 luxury properties that were part of Strategic Hotels & Resorts, a real estate investment trust that Blackstone acquired last December for about $6 billion. The firm agreed in March to sell Strategic to Anbang for $6.5 billion, and the Beijing-based company completed the purchase of 15 hotels last month, according to people with knowledge of the transaction.

The remaining hotel is located on a peninsula that’s also home to the Naval Base Coronado. The base comprises eight installations that lie on either side of the hotel, including an air station, amphibious base, landing fields, radio receiving facility and warfare training center. It’s one of the main training grounds for the special-operations Navy SEALs.

Cash Out

The sale’s termination delays Blackstone’s ability to cash out of its Strategic purchase at a profit. The Hotel del Coronado has an assessed value of $588 million, though its market price is far higher. The property is likely worth about $1 billion, according to Green Street Advisors LLC, a Newport Beach, California-based real estate research firm.

Representatives for Blackstone and Anbang declined to comment on the deal. Whitney Smith, a spokeswoman for the Treasury Department, also declined to comment. CFIUS reviews are confidential.

China’s growth into the world’s second-largest economy has spurred massive overseas investment and sparked tensions and concerns over cyber-espionage. Royal Philips NV in January canceled the $2.8 billion sale of its lighting-components unit to a group led by GO Scale Capital of China because of opposition from CFIUS.

Anbang has been on a two-year spree for foreign assets. The insurer’s aggressive style of dealmaking and opaque ownership structure have raised concerns among regulators and investors. Days after reaching the agreement to buy Strategic, the company launched a bidding war for Starwood Hotels & Resorts Worldwide Inc. before walking away three weeks later, leaving Starwood to be acquired by Marriott International Inc. last month. Completing the purchase of most of the Strategic portfolio helped to restore Anbang’s dealmaking credibility.

Chicago, Washington

With the Strategic purchase, Anbang owns properties including New York’s JW Marriott Essex House, the Westin St. Francis in San Francisco, InterContinental Chicago, Loews Santa Monica Beach Hotel, Fairmont Chicago, Four Seasons in Washington and Ritz-Carlton resorts in Laguna Niguel and Half Moon Bay, California.

Anbang set a record for a single U.S. hotel acquisition with its February 2015 purchase of New York’s Waldorf Astoria for $1.95 billion, a deal that CFIUS cleared. President Barack Obama bypassed the Waldorf when he visited New York the following September amid concern over cyber-spying, breaking a tradition of presidential stays going back to the 1930s.

CFIUS objections are seen as de facto outcomes and reviews rarely reach the point of the president stepping in to block a deal. One exception was when Obama, in 2012, stopped a Chinese-owned company from building wind farms near a U.S. Navy base in Oregon. He ordered Ralls Corp. to remove all property and installations from its sites and divest all of its interest in the wind-farm project, which was near a facility where the Navy conducts training for bombing and electronic combat maneuvers and develops drones.

Before 2012, the last transaction blocked on national-security grounds was in 1990, when President George H.W. Bush rejected the proposed acquisition of MAMCO Manufacturing Inc., a maker of motors and generators based in Washington state, by China National Aero-Technology and Export Corp.

©2016 Bloomberg L.P. This article was written by Hui-yong Yu and David McLaughlin from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: Because of its proximity to a U.S. military base, the Hotel del Coronado won't be sold to Chinese insurance group Anbang as part of its $6.5 billion acquisition of Strategic Hotels & Resorts from Blackstone. Hotel del Coronado