Public, non-traded real estate investment trust (REIT) CPA®:18 – Global has agreed to fund the completion of a lifestyle hotel in Munich, Germany with an $85 million commitment.
“This transaction offered the opportunity for CPA®:18 – Global to secure a high-quality hotel property in Germany’s wealthiest city at attractive pricing and demonstrates our ability to provide long-term development financing for the hospitality sector,” commented Arvi Luoma, Executive Director of W. P. Carey.
The new, upscale full-service hotel will offer 290 rooms for both leisure and business travelers. Amenities will include conference facilities, fitness center, spa, underground parking, bar, and modern restaurant concept.
Co-founder and major shareholder of Grand City Hotels Liran Wizman will lead the hotel’s completion efforts. His company, Europe Hotels | Private Collection, will manage the property under a 20 year net lease agreement with annual escalations that begins once the development is complete.
The REIT will provide $45 million at closing and disburse the remaining funds throughout the successful completion and opening of the hotel. Wizman has guaranteed to be on-budget and on-schedule for an early 2016 opening.
“The deal structure is particularly noteworthy as it highlights our ability to complete complex transactions. We are delighted to add to the global diversity of CPA®:18 – Global’s portfolio with this project—our first hotel investment in Europe,” said Luoma.
Wizman added, “W. P. Carey’s global investing perspective and experience was invaluable in enabling us to agree this deal. Their ability to deliver on the required structure, along with their long-term investment philosophy, made them the ideal partner for us. We look forward to opening this exciting European flagship hotel.”