The Germans are coming!
Hamburg-based Union Investment Real Estate, whose concentration up to now has been primarily in its native country, is branching much farther out and has now made its fourth acquisition in the United States since 2015.
It has acquired the Hilton Garden Inn Seattle Downtown for approximately $90 million, which puts the deal at around $395,000 per key. The hotel, which opened in 2015, is Union Investment's first deal on the West Coast, following acquisitions of the Courtyard World Trade Center, LondonHouse Chicago and the Godfrey Hotel in Boston.
The move by Union Investment shows continued capital outflows from Europe and Asia filtering into U.S. hotels chasing yield, especially in gateway markets with high demand generators.
“This acquisition clearly shows that our hotel investment radar also includes attractive locations on the West Coast of the U.S.,” said Andreas Löcher, head of investment management hospitality at Union Investment, whom we profiled ahead of IHIF Berlin. “Successful tech companies such as Amazon, Microsoft and innovation leaders in the field of biomedicine promise a prosperous future for the city. Increasing demand for office space also opens up excellent outlook for hotel investments.”
Seattle is expected to record around 20 million hotel nights per year in the near future, Union Investment said.
The hotel in Seattle has 222 rooms, including six exclusive suites, and 153,000 square feet usable space. The building is let on a 30-year lease and is a further addition to Union Investments open-ended real estate fund Unilmmo: Europa, which has been invested in Seattle since 2003 and keeps two office properties in the city.
This new acquisition in Seattle sees Union Investment’s hotel portfolio increase to 61 hotels with a total of just under 17,000 rooms. The value of the company’s hotel holdings has risen rapidly in recent years and they are now worth approximately €3.5 billion.