Goodwin Gaw has brought a pair of Chinese investors into a Chicago hotel deal
A room for a night at Soho House Chicago will set you back about $365. Membership in the posh private club at the same address will cost you at least $2,100 per year. Or you can buy the whole building for $95 million.
Hong Kong private equity shop Gaw Capital Partners teamed up with Chinese developer Sino-Ocean Land to buy the boutique hotel and members’ club in Chicago’s booming Fulton Market neighbourhood last month. Huarong International Financial Holdings, a unit of China’s largest distressed debt manager China Huarong Asset Management, also joined the deal for the six-storey building at 113 North Green Street.
The partners are buying the chic, 40-room hotel from local developers Shapack Partners and AJ Capital for $95 million, according to records cited by multiple media outlets. Gaw Capital had previously owned an undisclosed stake in the building.
The move comes nearly a year after Sino-Ocean made its first reported investment in the US by buying a San Francisco office building from Gaw affiliate Downtown Properties.
Gaw Brings More Chinese Players into Hotel Deal
Gaw Capital partnered with local real estate developers Shapack Partners and AJ Capital to buy the century-old former warehouse for $6.5 million in 2012. The partners are believed to have invested more than $66 million to refurbish the 115,000 square foot industrial facility for British private member’s club Soho House & Co. Local affiliate Soho House Chicago signed a 20-year lease to occupy the building in 2014.
The posh, 40-room Soho House Chicago has changed hands for $95 million
The project helped to kick off the rapid transformation of the Fulton Market industrial and meatpacking district in Chicago’s West Loop area, into a hub for swanky restaurants, hotels and condos and a base for corporate giants including Google and McDonald’s.
In 2016 JLL was reportedly hired to sell the building, which was expected to fetch bids in the range of $125 million, according to Crain’s Chicago Business. Shapack Partners and AJ Capital exited their investment in the property through last month’s sale, which was first reported by Commercial Real Estate Direct.
Gaw Capital is a longtime enthusiast for boutique hotels as well as value-add hotel plays. Co-founder Goodwin Gaw struck his maiden US deal by buying and renovating the landmark Hollywood Roosevelt Hotel in Los Angles over two decades ago.
Gaw also teamed up with Shapack Partners to buy the Public Chicago Hotel, a 285-room restored historic hotel for $60 million in 2016, and last year scooped up the Standard Hotel in Manhattan’s meatpacking district for $323 million. The company did not immediately reply to a request for comment from Mingtiandi.
Sino-Ocean Takes on Another US Property
Sino-Ocean Group, which is owned by Chinese food conglomerate COFCO, owns over 100 residential and commercial real estate projects across China as well as a land bank of about 34 million square metres. The developer reportedly bought 1161 Mission Street, a 65,000 square foot (6,039 square metre) office property in San Francisco’s SOMA district from Gaw’s Downtown Properties in May of last year.
Sino-Ocean is also an investor in US properties through its Hong Kong-based private equity wing Gemini Investments, which manages cross-border deals for the state-run giant and its partners. Gemini Rosemont, a venture between Gemini Investments and Albuquerque’s Rosemont Realty, has a portfolio of 13 million square feet of commercial real estate space across the US.
Sino-Ocean was a cornerstone investor in China Huarong’s initial public offering on the Hong Kong exchange in 2015, pledging to buy $684 million of shares. Huarong Asset Management suspended trading in Hong Kong last week following news that the firm’s chairman, Lai Xiaomin, had been placed under investigation for suspected graft.
Sino-Ocean Group Holding Limited (“Sino-Ocean Group”) was found in 1993 and has been listed on the Main Board of the Stock Exchange of Hong Kong ( HKSE the “ Stock Exchange”) on 28 September 2007 (stock code: 03377.HK). As at June 2017, Sino-Ocean Group had a total issued number of Shares of approx. 7.5 billion, whose major shareholders include China Life Insurance (29.98%) and Anbang Insurance Group (29.97%).