German Investor to Buy $120M DC Hotel

Union Investment GmbH has inked an agreement to acquire Thompson D.C., a 225-key project in the Navy Yards district, from a joint venture involving Geolo Capital and JW Capital Partners. The purchase will increase the company’s growing U.S. lodging portfolio to five properties.

Thompson DC, Washington, D.C.
Rendering of Thompson DC, Washington, D.C.

Hamburg, Germany-based Union Investment GmbH continues to bolster its U.S. lodging portfolio with the planned acquisition of Thompson D.C., a 225-key luxury hotel project that will rise in a blossoming neighborhood of Washington, D.C. The Thompson Hotels-branded property is being developed by Gone Yard Hotel Owner LLC, a joint venture of Geolo Capital and JW Capital Partners, and upon completion, will be purchased by Union Investment in a $120 million transaction.

Thompson D.C. will sprout up 11 stories in the burgeoning 48-acre Navy Yards mixed-use district along the Washington, D.C.’s Anacostia Waterfront. The property ticks the all-important location box. “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 GmbH, said in a prepared statement.

Geolo Capital Thompson DC
Rendering of Thompson DC

Designed by Studios Architecture, Thompson D.C. will be a five-star hotel destination, featuring such amenities as a state-of-the-art fitness facility, meeting space, a rooftop bar and ground-level retail space that will house a premier restaurant. Thompson D.C., which will ultimately be placed in the portfolio of Union Investment’s UniImmo open-ended real estate fund, will be the first hotel to open at the Navy Yard. The project is on track to reach completion in 2020.

Catnip for foreign investors

Union Investment has quite a penchant for U.S. lodging assets, which dovetails with a current trend among foreign investors. “As the U.S. continues to garner substantial amounts of foreign capital, the global buyer landscape for hotels is evolving. We’ve seen a slight pullback in outbound capital from China and a noticeable increase in investment from Europe,” Gilda Perez-Alvarado, a managing director with JLL’s Hotels & Hospitality Group, wrote in a recent publication by the commercial real estate services firm.

Upon closing of the Thompson D.C. transaction, Union Investment will have a collection of five U.S. hotel properties. The group includes The Godfrey Hotel Boston, which the company acquired in 2015; LondonHouse in Chicago; Hilton Garden Inn Seattle Downtown; and Courtyard by Marriott New York Downtown Manhattan/World Trade Center. And there’s more to come.

“With strong demand for modern hotels, the US hotel markets remain attractive for further investment,” Martin Brühl, chief investment officer with Union Investment Real Estate GmbH, said in prepared remarks.

Images courtesy of Studios Architecture