BPG secures funding for D.C. Marriott project
WILMINGTON – The Buccini/Pollin Group (BPG) recently closed an open investment round for its Marriott-affiliated hotel project in Washington, D.C.
BPG raised $6.2 million from 145 individual investors via the online platform CrowdStreet for its 235-room, 13-story Washington Marriott Capitol Hill/NoMa project, which is currently under construction. The future hotel will include a two-story lobby, large ballroom, outdoor terrace, chef-driven restaurant with indoor and outdoor dining, rooftop bar and event space, fitness facility and Marriott’s M club. It’s part of a massive mixed-use project known as the NoMa CNTR backed by BPG and Beltway developers Perseus TDC and Four Points LLC, along with investor Sunwater Capital.
The project is estimated to cost about $105.1 million in total and is located just north of Union Station and Capitol Hill. The remaining funding is covered by $17.25 million in sponsor and partner equity, a $56.1 senior loan, and a $25.5 mezzanine loan, according to Connect CRE.
It will add to BPG’s growing portfolio of Marriott-affiliated hotels around the nation despite the pressures of the COVID-19 pandemic. Last summer, BPG acquired the 622-room Renaissance Baltimore Harborplace Hotel for $80 million, adding to its 17 Marriott-affiliated hotels, including the recently renovated and rebranded Renaissance Philadelphia Downtown in Old City.
Like the Baltimore acquisition, BPG does not plan to hold the Washington hotel for the long term. In its CrowdStreet listing, BPG told investors to expect to hold the asset for about four and a half years, seeking a return on investment of about 230%.
The Wilmington-based developer has used CrowdStreet four times in the last three years to raise nearly $30 million in investment capital. The platform allows smaller individual investors to participate in large developments, which in the past would have primarily been limited to investment funds.
The hotel industry has been devastated by the COVID-19 pandemic, as travel restrictions, event cancellations, and decreased corporate travel kept rooms empty even after hotels were allowed to reopen. The tide may be turning, however, as flight and hotel bookings ramp back up with the increasing availability of vaccinations.
As of the week of April 17, about 57% of hotel rooms were booked in the United States on average, according to hotel data analyst firm STR. In early April, the nationwide industry hit its highest average occupancy rate since the pandemic began, suggesting that a surge of bookings could be on the horizon as travelers flush with savings look to finally get out of town again.