Retired baseball superstar Alex Rodriguez found his latest real estate investment.
Rodriguez’s A-Rod Corp and joint venture partner Adi Chugh of Maverick Commercial Properties are investing in CGI Merchant Group’s $650 million Hospitality Opportunity Fund. The two partners will help CGI with its investment strategy, expand its debt capital market capabilities and aid in acquiring trophy properties, according to a press release.
The hotel market has been hit especially hard during the pandemic, with some properties closing permanently and lenders taking over from overleveraged borrowers.
“Citywise, we’re looking at the major markets where we expect the resurgence of the local and international traveler,” Chugh told The Real Deal, referring to assets that have struggled during Covid. The fund could hold onto properties for three to five years, or longer.
Miami-based CGI previously launched the fund to acquire distressed and value-add hotels in North America and the Caribbean over the next three years. The properties will be branded as Hilton hotels.
The Hospitality Opportunity Fund, also called the H-Fund, will purchase hotels in the U.S., Canada and the Caribbean at discounted prices to what they would have sold for prior to the pandemic. It already acquired the Gabriel Hotel at 1100 Biscayne Boulevard in downtown Miami, CGI CEO Raoul Thomas told the Wall Street Journal, which first reported Rodriguez’s involvement in the fund. CGI previously owned the Gabriel.
Chugh said the fund is also looking to acquire additional properties in Miami.
Rodriguez acquired a stake in New York-based Maverick CP, a real estate private equity and debt advisory firm, earlier this year. Chugh and Rodriguez met about a year and a half ago through a mutual friend, Chugh said. He plans to move to South Florida within the next year, working closely with A-Rod Corp and CGI.
Rodriguez said in a statement that he is proud to be involved with CGI, which “is as focused on advancing the communities it calls home, as it is on financial returns.”
Rodriguez has been investing in commercial real estate for years, dating back to 2003. His Miami-based A-Rod Corp also houses Monument Capital Management, a multifamily real estate investment firm.