Geolo Capital on Friday told HOTELS it has formed a partnership with Wanxiang America, the U.S. subsidiary of Wanxiang Group Corp., China’s largest private automotive components company, to invest in select hotel properties in the U.S.
The partnership’s first two acquisitions are in Northern California, and the two groups have committed to invest US$400 million in hotel properties to date. They are exploring additional joint projects in California, Texas and Illinois to bring their total investment to US$1 billion.
Geolo Capital and Wanxiang formed the joint venture to purchase the iconic 60-room Ventana Inn & Spa in Big Sur, California, from Walton Street Capital and OakTree Capital Management. In addition, Wanxiang purchased a significant interest from Geolo Capital in the 180-room Carmel Valley Ranch, a luxury resort in Carmel Valley, California.
Significant capital from both entities will provide for renovations and programming enhancements for the two properties. Both resorts will continue to be managed by Commune Hotels & Resorts, Geolo Capital’s hotel management company.
No stranger to the U.S. real estate market, Wanxiang has invested in more than 80 projects since 2010 and is on track to become one of the largest Chinese corporate investors in U.S. real estate. In fact, it recently partnered with Geller Investments, Chicago, in the acquisition of the Waldorf Astoria Chicago and development of the Conrad in Chicago.
When asked if Geolo’s deal with Wanxiang is exclusive in the hotel space, Geolo Capital Founding Partner and Director John Pritzker told HOTELS,” I can’t speak for Wanxiang, but my impression is they will continue to seek diverse opportunities in various categories of the real estate markets. Our working relationship with Wanxiang doesn’t preclude either one of us from working with others.”
Pritzker declined to provide financial details on the two California hotel deals with Wanxiang, but added, “Both properties are iconic, so there’s not a compelling need for rebranding at this time. Ventana Inn & Spa and Carmel Valley Ranch have been around for many years, and stand on the strength of their location and history. Carmel Valley Ranch last week completed an expansion and renovation. For Ventana Inn & Spa, we have earmarked substantial funds to upgrade both the physical plant as well as the programming at the property.”
As for the partner’s plans for further developments, Pritzker said, “As for types of targets, there’s no specific model. To paraphrase Justice Potter Stewart, ‘We’ll know it when we see it.’ Currently, as you might imagine, the intent is for Commune to manage the properties.”
Looking down the road and whether the partners will invest beyond the earmarked US$1 billion, Pritzker said, “Time and performance will determine our mutual appetite for the future.”