Frankfurt, Germany-based Union Investment is set to acquire a Thompson-branded lifestyle hotel development in Washington D.C.'s Navy Yard for approximately $120 million.
The vendor, developer and future operator of the property is Gone Yard Hotel Owner, a joint venture between Geolo Capital, the San Francisco-based private equity investment arm of the John A. Pritzker Family Office; and JW Capital Partners, a Boston-based real estate investment group. Transfer of the asset will take place upon opening of the 225-guestroom hotel, which is scheduled for the beginning of 2020. Upon completion, the project will be added to the portfolio of the open-ended real estate fund UniImmo: Global. The lease has a term of 30 years.
Union Investment has already acquired hotels in Boston, Chicago, New York and Seattle. The new property will be the company's fifth hotel investment location.
“Washington’s Navy Yard is already being seen as a magnet for trendsetters, with strong appeal for residential, office, retail and restaurant uses,” Andreas Löcher, head of investment management hospitality at Union Investment Real Estate, said in a statement. “The Thompson lifestyle brand is an excellent fit with this location and also with our existing hotel portfolio.”
To date, some ten hotels in the U.S. and Mexico operate under the Thompson brand. “We carefully monitor the emergence of young hotel brands and innovative accommodation trends globally. We are happy to invest in such concepts if we are convinced of their long-term viability,” Löcher said.
Union Investment currently holds 66 hotel properties across nine national markets in its actively managed funds. The hotel portfolio is worth a total of €3.9 billion, with further expansion of the U.S. segment of the portfolio being a strategic priority for the company, Löcher said.