German Investor Bets Big On Portland Hotel Market
The giant German investor Union Investment acquired the 294-room The Porter hotel in Portland, a recently completed property developed and operated by Widewaters Hotels. The hotel, which is part of the Curio Collection by Hilton brand, traded for about $147.8M.
The Porter is at SW Second Avenue and SW Columbia Street in Downtown Portland, and represents the investor's sixth hotel acquisition in the United States, its second on the West Coast — and its first in Portland.
The German real estate investment manager acquired the Hilton Garden Inn Seattle in 2017 for $90M.
The Porter features an upmarket restaurant on the ground floor, a coffee bar and a grab-and-go market, plus a rooftop restaurant with additional lounge. Other amenities include an indoor pool and a fitness center that offers individual meditation and yoga rooms. The hotel also offiers about 13K SF of conference space.
"The Porter is an ideal addition to our U.S. portfolio, which is set to grow at a similar pace going forward as in recent years," Union Investment Real Estate GmbH Head of Investment Management Hospitality Andreas Löcher said.
The Curio Collection by Hilton brand has been represented in Union Investment’s holdings since 2016, when a related fund, Unilmmo: Europa, acquired the 452-room LondonHouse in Chicago for $315M.
The Portland hotel market is in a growth mode. Most notably, the 600-room Hyatt Regency Portland next to the Oregon Convention Center, which will open in 2019, will bring in a new wave of conventioneers and their dollars, and presumably stimulate demand for rooms in other properties in the city.
Local hotel fundamentals have already been doing well, according to Travel Portland. Revenue per available room totaled $147.08 last year, up 14% compared with 2014, even as occupancies remained about the same over that period (80.3% in 2014 and 80% in 2017).
Travel to Portland is growing as well. About 13.9 million domestic passengers came to the Portland International Airport in 2012, while 18.2 million did in 2017, representing 32% growth in five years.
International arrivals grew even more robustly, up from 444,000 to 747,000 between 2012 and 2017, or 68%. In 2010, international flights arrived from only three major cities, Tokyo, Amsterdam and Vancouver, British Columbia. By 2017, that number had expanded to 10 cities.
The Porter acquisition was made on behalf of open-ended real estate fund Unilmmo: Global, further strengthening its hotel portfolio. Recently, the fund acquired the planned Thompson-brand boutique hotel in Washington, D.C.
Union Investment (Union Asset Management Holding AG) is the investment arm of the DZ Bank Group and headquartered in Frankfurt, Germany. Widewaters Hotels has developed and acquired 38 hotels and operates 18 hotels in the United States.
