Oxford Capital Group and Angelo Gordon Announce the $315 Million Sale and 25 Year Lease-Management Back Agreement of Iconic Londonhouse Chicago Hotel with Union Investment

Friday, April 22, 2016 - 10:11

Sheppard Mullin represented Oxford Capital in the $315 million sale and 25 year lease-management back of LondonHouse Chicago to Germany’s Union Investment Real Estate. The deal team included Managing Partner Larry Eppley, Mike Roth, Jeff Gardner, Terry Budny, Paul Metzger and John Sample. 

An Oxford Capital Group, LLC ("Oxford Capital") led venture with Angelo, Gordon today announce the $315 Million sale and 25 year lease-management back of LondonHouse Chicago, at the corner of North Michigan Avenue and Wacker Drive, to Germany's Union Investment Real Estate ("Union Investment").

 

Scheduled to open Spring 2016, LondonHouse Chicago is Oxford Capital's latest luxury lifestyle hotel development. The hotel features 452-rooms located on Floors 3 - 22 of the Alfred S. Alschuler-designed London Guarantee & Accident Building, and the entire new 22-story architecturally synchronized 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 Avenue Bridge, along with the Wrigley Building, Tribune Tower, and 333 North Michigan Avenue. The Oxford - Angelo, Gordon venture retains ownership of the separate 28,000SF retail parcel on floors 1 and 2 of the 360 North Michigan Avenue building.

 

Commenting on the transaction, 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 their second foray into the United States' hotel market. We've had a wonderful experience to date with them around our recent similar Godfrey Boston transaction."

 

Rutledge continues, "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 square feet based on an annual Fixed Rent. An additional Profit Share component documents the spirit of aligned interests between Oxford Capital, Angelo, Gordon, and Union Investment. With the LondonHouse Chicago agreement, Union Investment strategically expands its UniImmo: Europa open-ended real estate fund in the United States.

 

"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 US," 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.