Liquid Realty Invests in $286M Hotel Portfolio

SAN FRANCISCO-Liquid Realty Partners, a specialist in secondary investing, has acquired an interest in a $286-million lodging portfolio in the Midwest, the South and the East that the company describes as seven full-service hotels located in strong markets. Jeff Giller, managing principal and chief investment officer of Liquid Realty, tells GlobeSt.com that the deal differs from many if not most secondary investments in that Liquid Realty's position in the portfolio affords it greater control than is typically the case in secondary investments.

Giller explains that this particular deal provides Liquid Realty with a position that is more akin to that of a joint venture partner than is usually the case in a secondary investment. One reason that Liquid Realty can engineer such deals, Giller tells GlobeSt.com, is that the company has a depth of expertise in hotels and other commercial real estate property types that enables it to look deeper into the real estate side of deals in evaluating investments.

Liquid Realty's co-investment was sponsored by Eagle Realty Group, a real estate investment management firm based in Cincinnati, which assembled the portfolio and is managing the co-investment. Eagle Realty Group is a member of Western & Southern Financial Group, which is also a participant in the co-investment portfolio.

Tom Stapleton, senior vice president of Eagle Realty Group, comments that Liquid Realty's knowledge of the hotel sector was one of the reasons that Eagle chose Liquid Realty to participate in the portfolio. He also cites the San Francisco firm's expertise in capital markets and in structuring investments.

Giller tells GlobeSt.com that Liquid Realty, as opposed to seeking investments in specific product types or geographic markets, focuses more on determining whether a prospective investment meets its requirements for return on investment. As a result, the company's portfolio consists of a diversity of property types in a geographically broad range of US and international markets including North America, Europe, Asia and emerging markets. Its investments range from small, single-fund interests to large, multiple-fund portfolios.

Liquid Realty works with real estate private equity funds, partnerships and trusts, foundations, pension plans and investment managers to identify deals that meet its investment goals and theirs. In the case of the $286-million hotel portfolio, for example, Giller comments that Liquid Realty's investment allows Western & Southern to simultaneously realize a portion of its value and to manage its portfolio.

Year to date, Liquid Realty has completed a wide range of real estate secondary investments, including traditional LP sales of US and international real estate fund interests, primary fund investments, co-investments and joint venture secondary transactions. In total, the firm has invested $225 million in the past five months.