Alex Rodriguez Becomes “Platform Investor” In $650 Million Hotel Fund
Fri, 12/18/2020 – 08:31
Just when we thought hospitality finally had a chance of recovering, former Yankees slugger and steroid aficionado Alex Rodriguez has decided it’s time for him to get into the industry.
Rodriguez, who lives in Miami, is teaming up with Adi Chugh, founder of the New York-based Maverick Commercial Properties real estate and equity firm, to become a “platform investor” in a $650 million hospitality fund, the Sun Sentinel reports. The fund is run by CGI Merchant Group, a Miami-based investment firm focusing on real estate and private equity, the report notes.
The fund is looking to acquire 20 hotels across North America and the Caribbean over the next three years and place them under the Hilton brand.
Despite us playfully chiding Rodriguez, the timing to get into hospitality may not actually be too bad. Covid has decimated the industry, with names like Hilton seeing an 81% drop in net income in the second quarter of 2020. But one problem is that despite the industry not recovering yet, many travel and leisure related stocks already have, thanks to the Fed’s relentless money printing.
Raoul Thomas, CEO and founder of CGI, said: “We’re excited about this venture not only from a financial aspect, where hotels will be sold at a discount due to COVID, but the way in which we operate those hotels,” which we translate to mean “We are happy to have found a mark with a recognizable public face to help lead other investors to our fund, which we will happily take fees from.”
Thomas said, trying to make his fund sound as much like a “woke” ESG fund as possible: “There’s a growing demand from consumers who are looking for value beyond the experiences they want to have. They want to know where their dollars go, are they making an impact in the communities around the hotels and if the hotel is being a responsible steward of the community and giving back.”
Rodriguez concluded: “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. 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 returns.”