Commercial Magazine

International Investments: United Kingdom

By Victor Whitman

The United Kingdom has remained a relatively big player in U.S. commercial real estate in recent months. According to Real Capital Analytics (RCA), U.K. investors were partial or full investors in 50 U.S. properties during the 12-month period ending in first-quarter 2021. These deals totaled $1.7 billion in sales volume and represented 4.9% of all cross-border investment during this time frame. 

The U.K. was hit hard last year by the first wave of the COVID-19 virus. RCA analysts reported, however, that the pandemic hasn’t affected foreign investment that much as many deals have involved companies with offices in the U.S. At the end of Q1 2021, the U.K.’s ranking among world players slipped one spot to No. 6. The $1.7 billion sales transaction figure was down 10% compared to the 12-month period ending in first-quarter 2020. The U.K. ranked No. 5 among world players in calendar year 2020, up from No. 11 in 2019, RCA reported. 

U.K. investment companies were buyers in several notable U.S. deals in recent months and they have bucked a trend by pursuing hotel assets. According to RCA, U.K. money was involved in some of the top cross-border hotel acquisitions during this time frame. London-based Cain International, London & Regional Properties and Global Mutual were involved in these deals.  

This past February, London & Regional bought the Sheraton Lake Buena Vista Resort in Orlando for $49.9 million. The company also purchased a portfolio of hotels in Texas and Florida last year from the Omni Hotels chain, adding to its global holdings of 17,000 rooms. RCA reported that 1,729 rooms were involved in the transaction and Bloomberg reported a sales price of roughly $150 million.

This past November, Cain International purchased the 878-key Hudson Hotel in midtown Manhattan near Central Park. It also bought one of Miami’s top luxury hotels, Delano South Beach, a 191-key property built in 1947 and located in the Art Deco Historic District. No sales prices were reported.

In August of last year, Global Mutual bought The Georgian Hotel — a boutique property constructed in 1933 in Santa Monica, California ­— for $62.5 million. In February 2020, London-based Cedar Capital Partners teamed with American and Canadian partners to buy the 275-room Shelbourne South Beach Hotel in Miami Beach for $120 million.

U.K. investors also were active in the U.S. multifamily sector. In a deal first reported this past January, U.K.-based GSA Group entered the U.S. market with the purchase of an 8,000-bed student-housing portfolio, a joint venture with University Communities and the California State Teachers Retirement Fund. According to RCA, the purchase price was $693.1 million.

In a deal reported this past March, global investment company Round Hill Capital bought the 445-unit Cortland Allen Station apartments in a suburb of Dallas. The same month, London-based M&G Investments partnered with a Miami-based investor on the purchase of a 260-unit apartment complex in Houston, with plans to update the 1970s-era facility with new interiors and amenities. Lastly, London-based jeweler Graff bought Madison Avenue retail space in Manhattan in January 2021 for $43 million. ●


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