Retired Major League Baseball star turned businessman Alex Rodriguez is making moves in the hospitality industry with a new $650 million venture to acquire and develop 20 hotels by 2023.
Just months after he and fiancée Jennifer Lopez failed with a bid to buy the New York Mets in August, the Miami Herald reported Tuesday that A-Rod is set to become a platform investor in a hospitality fund with CGI Merchant Group, a Miami-based investment firm.
Coming as part of a joint venture with his business partner Adi Chugh, founder of New York’s Maverick Commercial Properties, the A-Rod-involved fund is aiming to acquire 20 hotels across North America and the Caribbean over the next three years.
The fund will be repositioning its hotel acquisitions under the Hilton brand and will primarily be seeking properties in Miami, New York City and Seattle, according to the Herald.
Just months after he and fiancée Jennifer Lopez failed with a bid to buy the New York Mets, A-Rod is making moves into the hospitality industry with a new $650 million venture to acquire and develop 20 hotels by 2023
The fund has already made is first purchase in the 129-room Gabriel Hotel in Miami (above), the sale of which was sanctioned in June
The move comes as part of a joint venture with his business partner Adi Chugh (above), founder of New York’s Maverick Commercial Properties
As part of the agreement, Rodriguez and Chugh will assist in the acquisition of trophy investments for the hospitality fund as well as promote the firm’s co-investment platform and its flexible and multi-use office portfolio.
Rodriguez has been a real-estate investor for a number of years, a venture which began during the mid-point of his 22 season career in the MLB.
In 2003, a year before he began playing for the New York Yankees, he set up his own investment company, Monument Capital Management.
The company has since made more than $800 million worth of property acquisitions in over a dozen states, the Wall Street Journal reported.
Rodriguez will be investing some of his personal fortune into the hotel fund, and will be helping to source deals too.
In a statement, A-Rod said investing in hotels right now is a way to cash-in on a travel rebound once the coronavirus pandemic is under control.
‘We believe we can acquire assets that are strategically positioned to be in the top-performing percentile once restrictions are eased,’ the 14-time All Star said. ‘Wealth is rarely created overnight.’
The fund will be repositioning its hotel acquisitions under the Hilton brand, with a focus on Miami, Seattle, NYC and the Caribbean (Hilton in Caribbean pictured above)
The hospitality industry has been hard-hit by the on-going coronavirus pandemic, as international tourism and domestic travel has largely ground to a halt since March.
Hilton World Wide holdings, which operates some 6,300 properties across 118 countries, reported a second quarter net loss of $430 million from a net income of $260 million on revenue, according to Marketwatch. That marks a stunning 81 percent drop on the same period in 2019.
Industry wide, as of the first week of December, hotel-room occupancy is down 38 percent from the same week in 2019, STR reported. Hotel executives say they don’t expect the industry to return to last year’s revenue totals until at least 2023.
Despite the troubling prognosis, fewer U.S. hotels have changed hands this year than in almost any other year and the prices of those that have sold have fallen an average of just 3.3 percent, the Journal reported.
However, mounting debts for hotel owners could spell trouble for further distress in the months ahead, creating more opportunities for investors such as A-Rod.
The CGI Merchant fund will look to invest in hotels and resorts across North America and the Caribbean, the company said, with particular emphasis on Miami, New York City and Seattle.
Raoul Thomas, CEO and founder of CGI, voiced excitement over the venture with A-Rod to the Herald.
‘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.
‘There’s a growing demand from consumers who are looking for value beyond the experiences they want to have,’ he said. ‘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 has been a real-estate investor for a number of years, a venture which began back during the mid-point of his 22 season career in the MLB. He set up his own investing firm in 2003, a year before he joined the Yankees (above)
Combined, A-Rod’s and J-Lo’s net-worth is thought to be around $700 million
Thomas said CGI will be avoiding purchasing hotels with open floor plans and large banquet spaces, or those dependent on large group events, such as seminars and conferences, fearing they will recover far slower than those geared primarily at tourists.
The fund has already made is first purchase in Miami’s Gabriel Hotel. The sale of the 129-bedroom property was sanctioned in June.
The company is anticipating announcing more acquisitions in early 2021, CGI said.
In a press release, Rodriguez said: ‘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.’
Rodriguez’s newest business venture comes some four months after he and J-Lo voiced their ‘disappointment’ after they failed in a six-month-long effort to acquire the New York Mets.
The couple first started eyeing up the possibility of acquiring the Queens-franchise at the beginning of the year, retaining JPMorgan to help raise capital for the $2.4 billion bid in April.
However in an August 29 Instagram post, 51-year-old J-Lo wrote: ‘Alex and I are so disappointed!!
‘We worked so hard the past 6 months with the dream of becoming the first minority couple and the first woman owner to buy her father’s favorite Major League Baseball team with her own hard earned money. We still haven’t given up!! #NY4ever,’
So close: ‘We worked so hard the past 6 months with the dream of becoming the first minority couple and the first woman owner to buy her father’s favorite Major League Baseball team with her own hard earned money,’ she wrote
Jennifer and Alex planned to invest $300 million of their own funds into the offer
A statement attached to the post read: ‘The consortium led by Alex Rodriguez and Jennifer Lopez has informed the Mets that they are no longer pursuing acquisition of the team.’
The statement also listed the other individuals working with them to fund the ‘record price for the team.’
‘The consortium said that they are disappointed to not be a part of the revitalization of New York City and provide an exhilarating experience for the fans,’ before wishing the organization well.
Jennifer and Alex planned to invest $300 million of their own funds into the offer, according to the New York Post.
Despite their ‘record offer,’ the Mets have chosen billionaire Steve Cohen to be the new owner, after he provided an even higher offer.
He previously walked away from a stunning $2.5 million bid in February, but the Mets seemed to have lured him back.
Rodriquez is one of the highest earning players in MLB history, amassing a staggering $317 million from his record-breaking contract deals with the Texas Rangers and New York Yankees. Since his retirement he’s also been involved in a number of lucrative endorsements and works as a broadcaster for ESPN and Fox Sports.
Meanwhile Lopez is still enjoying a thriving career as a recording artist and actress.
Combined, the couple’s net-worth is thought to be around $700 million.