Carey Watermark Investors 2 Buys San Jose Marriott for $154 Million
Carey Watermark Investors 2 Incorporated, a publicly registered non-traded real estate investment trust sponsored by W.P. Carey (NYSE: WPC), purchased the San Jose Marriott for $154 million. The acquisition was financed with $88 million of senior debt.
The 27-story hotel includes 510 guestrooms and is located in downtown San Jose, one of Silicon Valley’s strongest lodging markets. Built in 2004 and recently renovated, the property includes 23,000 square feet of meeting and event space, three food and beverage outlets, a concierge lounge, business center, fitness center, and outdoor swimming pool.
“Given the limited supply of institutional quality assets in the Silicon Valley market, the San Jose Marriott represented a unique investment opportunity. The property is the newest hotel in downtown San Jose and the acquisition adds a top performing, well-located asset in a high growth market with high barriers to entry to CWI 2’s portfolio,” said Michael Medzigian, chief executive officer of CWI 2. “With a strong current yield and expected solid risk-adjusted returns, the property’s central location and superior access within Silicon Valley should allow it to continue to outperform within its competitive set.”
The hotel will continue to be managed by Marriott International.
Carey Watermark Investors 2 is a publicly registered REIT that was formed to make investments primarily in the lodging and lodging-related sectors. The REIT went effective in February 2015 and has raised $449.3 million in investor equity since inception. As of March 31, 2016, the company held ownership interests in five hotels, with a total of 1,948 rooms.
