Baseball superstar-turned real estate investor Alex
Rodriguez and New York finance veteran Adi Chugh are joining a $650 million
fund targeting hotel opportunities in the US and Caribbean markets.
CGI Merchant Group announced Rodriguez and Chugh, founder of
Maverick CP, among the starting lineup of investors backing the firm’s $
Hospitality Opportunity Fund (H-Fund).
The H-Fund will focus on acquiring and developing hotel
properties throughout North American and Caribbean markets and target more than
20 hotels over the next three years. H-Fund assets will be repositioned to form
a “first-of-its-kind” hospitality portfolio.
The assets will be housed within the Hilton portfolio of brands, adding to the hospitality industry leader’s portfolio, consisting of more than 6,300 properties in 118 countries and territories worldwide. Hilton will not be a financial partner in any of the deals.
“Continuing to earn the trust and partnership from
sophisticated investors, such as Alex Rodriguez and Adi Chugh, is a testimony
to our track record and contrarian approach. Their support will be crucial as
we execute on key strategic initiatives for the firm,” said CGI Founder
and CEO, Raoul Thomas.
“Alex and Adi
will not only increase the depth of our business relationships but also broaden
the social impact of our investments, which we hope will spur a more conscious
approach to investing across the entire commercial real estate industry.”
A-Rod Corp and Maverick CP joined forces earlier this year
to expand their portfolios and build a large commercial real estate platform
across various asset classes.
As part of this new agreement, Rodriguez and Chugh will
support CGI’s investment strategies, expanding the firm’s debt capital markets
capabilities, and assisting in the acquisition of upcoming trophy investments
for the H-Fund.
The New York pair will also take an active role in advancing the firm’s co-investment platform and expanding its flexible and multi-use office portfolio.
“CGI’s visionary and conscious approach to business has
the potential to transform the commercial real estate industry, bringing in
untapped voices that can inject new energy and ideas to ignite vast opportunities,”
said Rodriguez. “I’m proud to be involved with a company that is as
focused on advancing the communities it calls home, as it is on financial
Founded in 2006, CGI Merchant Group currently holds assets
across multiple alternative investment strategies, including value-add and
” CGI is an industry disrupter,” said Chugh. “As other commercial real estate funds are shedding assets, CGI is gaining ground, all while changing the definition of thoughtful investing. I am looking forward to working alongside CGI to blaze a new path of innovation in real estate investing.”
The hospitality sector has been battered by the coronavirus
pandemic and distress in the sector has pushed sales up two percent on last
year, according to Real Capital Analytics. The lodging delinquency rate for
September came in at 22.94 percent, while the lodging special servicing rate
came in at its all-time high, 26.04 percent, according to Trepp, which believe
the numbers illustrate a sector that is rife with distress and has yet to find
a real source of respite.
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