Hong Kong-based Gaw Capital continues to make the West Coast a very important and strategic investment geography in its portfolio. The company, which has also been active through its Los Angeles-based Downtown Properties entity in a variety of acquisitions in Southern and Northern California, as well as the Pacific Northwest, will be paying $143 million, or $280,474 per room, to acquire the 494-room Marriott Oakland City Center hotel in Oakland. This sale comes on the heels of a March 2017 acquisition of the roughly 260,000-square-foot 555 Montgomery Street office building in San Francisco for which Gaw paid $120.6 million, or roughly $463 per square foot.
Both transactions were reported by Mingtiandi, an Asia Real Estate Intelligence publication. The Oakland sale has not closed yet, and the 555 Montgomery sale has already been recorded and public documents confirm the acquisition.
The Oakland acquisition was made through the company’s $315 million US Fund II. Gaw had made the investment into Oakland as a recognition of the city’s increasing prominence within the region as an important part of its urban core, according to the Mingtiandi report. The seller was a partnership between San Jose-based DiNapoli Capital Partners and New York-based Apollo, which paid $84 million, or $171,000 per room, to Los Angeles-based CIM Group for the hotel in early 2015.
The Marriott Oakland City Center hotel also sits across the street of another Gaw property that the Hong Kong investor purchased in February of 2016. This is the 162-room Marriott Courtyard hotel located at 988 Broadway for which the company paid $43 million, or $265,432 per room. The seller for this property was also the CIM Group. With the two hotels in its portfolio, the investor now controls 656 rooms in Oakland’s downtown core.
555 Montgomery in San Francisco is home to the East West Bancorp, which sold the building to Gaw. According to Mingtiandi, Gaw’s Downtown properties already owns 300 Montgomery, 550 Montgomery and a Davis Street retail asset Embarcadero Square. Gaw has been strategic about its San Francisco ownership, and has also disposed of properties at the opportune time. Earlier this week, we reported that it sold the approximately 65,000 square foot office building in San Francisco at 1161 Mission Street for $42 million, or $640 per square foot, to another Hong Kong-based investor, Sino-Ocean Land. Gaw had paid $19.3 million for the building in August of 2012 and invested in improvements to the complex in order to re-tenant the building. Today, it is home WeWork, whose lease runs through 2030, as well as Forerunner Ventures, an all-women led venture capital firm, and Augmedix, a technology company.