Union Investment makes first foray into US hotel sector
Union Investment is investing $180m (€164m) in its first US hotel deal.
The German fund manager bought the Godfrey Boston hotel for its UniImmo: Europa open-ended real estate fund.
The transaction is structured as a 25-year lease covering 100% of the total rentable area of 135,000 sqft based on an annual fixed rent.
The deal takes the Hamburg-based investor’s overall hotel portfolio to €2.5bn.
Andreas Löcher, head of investment management hotels at Union Investment Real Estate, said: “The international growth of our hotel investment activities is based on a clear strategy of expanding our hotel portfolio and diversifying even further across all asset classes.
“Our long-standing presence in the US office market and our strong commitment, both in metropolitan areas and in gateway cities, is successfully opening doors and enabling us to tap into attractive hotel markets in North America.”
A joint venture between Oxford Capital Group and Walton Street Capital sold the 242-room hotel, due to open in January next year.
John Rutledge, founder, president and chief executive at Oxford Capital Group, said: “After thoroughly vetting a large number of interested investors and suitors, we chose Union Investment for a variety of reasons, including its commitment to a highly professional transaction process, the scale and quality of its organisation and people, and its competitive pricing.
“And, as always, we’re looking for win-win relationships with our investors.”