CHICAGO—An Oxford Capital Group, LLC-led venture with Angelo, Gordon has sold the LondonHouse Chicago, at the corner of North Michigan Ave. and Wacker Dr., to Germany’s Union Investment Real Estate for $315 million.
Scheduled to open this spring, LondonHouse Chicago features 452 rooms located on floors 3 through 22 of the Alfred S. Alschuler-designed London Guarantee & Accident Building, and a new 22-story Modernist glass tower designed by Chicago’s Goettsch Partners. Built on the site of historic Fort Dearborn in 1923, the London Accident & Guarantee Building is a both a local and national landmark, and one of the four iconic 1920s flanks of the North Michigan Ave. Bridge, along with the Wrigley Building, Tribune Tower, and 333 North Michigan Ave., according to Oxford Capital. The Oxford-Angelo, Gordon venture retains ownership of the separate 28,000-sq.-ft. retail parcel on floors 1 and 2 of the 360 North Michigan Ave. building.
John W. Rutledge, founder, president and CEO of Oxford Capital and Oxford Hotels & Resorts, LLC, said, “We are delighted to announce an agreement with Union Investment for its second foray into the United States’ hotel market. We’ve had a wonderful experience to date with [the company]around our recent similar Godfrey Boston transaction.”
He continued, “This transaction outcome is a true win-win-win for Oxford, its institutional investment partner Angelo, Gordon and Union Investment. Specifically Oxford and Angelo, Gordon are able to receive an attractive return on their original investment. Oxford Capital and Oxford Hotels and Resorts secured a long-term lease, management, and brand licensing agreement for LondonHouse, which is part of its growing national collection of lifestyle hotels and brands. Finally, this transaction allows for Union Investment to acquire one of the most prominent, well-located properties in the United States at an attractive return for its investors.”
The LondonHouse Chicago transaction is structured as a 25-year lease covering 100% of the total rentable area of 361,467 sq. ft. based on an annual fixed rent. With the LondonHouse Chicago agreement, Union Investment strategically expands its UniImmo: Europa open-ended real estate fund in the U.S.
“This second investment underscores our reputation as a reliable and attractive partner to the hotel industry at international level. It also opens up the prospect of further off-market transactions in the U.S.,” said Andreas Löcher, head of Investment Management Hotels at Union Investment Real Estate GmbH. “Following our joint deals in London and Boston, we are delighted to be expanding our partnership with Oxford Capital in the Chicago metropolitan region with the acquisition of this exceptional property.”
“Working closely with Oxford in overseeing the transformation of and breathing new life into this iconic Chicago landmark has been an extremely rewarding process. We are pleased to have been able to recapitalize this historic asset with an investor well-suited to partner with Oxford as LondonHouse’s long-term stewards,” said Ryan Klenovich, director at Angelo, Gordon.