IF YOU HAD TO PICK ONE ASSET CLASS THAT WAS IN MOST DISFAVOR AND WHERE THERE ARE MORE OPPORTUNITIES , URBAN , FULL- SERVICE BOUTIQUE HOTELS ARE THE ONES THAT ARE SLOWER TO COME BACK , OR THE DOWNTOWN KIMPTON-TYPE PROPERTIES , WHICH OUTPERFORMED PRIOR TO THE PANDEMIC . SO THOSE ARE THE OPPORTUNITIES WE ’ RE LOOKING AT AND ARE UNDER CONSIDERATION RIGHT NOW .
GROWTH STRATEGY The strategy to grow GenPro includes looking for lifestyle / boutique projects and properties all over the United States and maybe even in Europe where a value-add opportunity presents itself . Alibhai says it could include redevelopment deals . “ We really like partnerships that enhance an asset and then , obviously , with Benchmark Pyramid being a very seasoned and specialized operator in this segment , that gives us an operator that we can continue to bring in tow ,” Alibhai says .
Alibhai adds , “ If you had to pick one asset class that was in most disfavor and where there are more opportunities , urban , full-service boutique hotels are the ones that are slower to come back , or the downtown Kimpton-type properties , which outperformed prior to the pandemic . So those are the opportunities we ’ re looking at and are under consideration right now .”
Deals could come from existing owners who want a little help and may still want to even continue to own their assets , where GenPro could come in and buy a 50 % stake , for example , turn management around with Benchmark Pyramid and still leave the owner with upside once the market recovers . “ The good news about this venture is both Karim and I comprise the investment committee ,” Sondland says . “ And we can be very flexible in how we structure these deals .”
On the new development side , GenPro has one deal in the works in the U . S ., which it cannot yet announce . “ It would be a very exciting ground up development in an absolute barrier to entry , waterfront locations ,” Sondland says . “ It ’ s a great market , but it ’ s going to be a three- to four-year development cycle . The existing assets that require repositioning or require capex are clearly the low-hanging fruit both in Europe and in the U . S .”
Clearly , domestic markets are the priority for growth , although Benchmark Pyramid has a wholly owned subsidiary based in
– KARIM ALIBHAI
London called Hamilton Partners and they manage a big portfolio similar to what GenPro is pursuing .
“ During my time and service in Europe , I met a lot of people made a lot of friends ,” says Sondland , who served as U . S . Ambassador to the European Union during the Trump administration . “ I ’ ve been invited several times by folks that I ’ ve met along the way to come over and explore opportunities . So , I think that ’ ll be an interesting additive venture .”
At the same time , Sondland was a key witness in Trump ’ s impeachment inquiry and revealed that he told a top Ukrainian official that hundreds of millions of dollars in military aid would “ likely ” be held up unless the country ’ s government announced investigations into President Donald Trump ’ s political rivals — a major reversal from his previous closed-door testimony .
As for the negative connotations tied to Sondland ’ s ambassadorship , he says , “ As this has shaken out , after all of the initial media frenzy , I ’ m very happy that as I move around the world , literally in the United States and elsewhere , I ’ m frequently recognized . And someone , to me , that ’ s clearly a Democrat , says , ‘ thank you for telling the truth .’ And someone else will walk up to me as a Republican and say , ‘ thank you for your service .’ So , I really had few of any negative comments in the preceding two years since all the frenzy .”
Alibhai concludes by saying the deal enables GenPro to do deals where it can say , “ one plus one equals three ,” which brings both real estate ownership and management expertise together because it is going to spend “ a fair bit of money ” on the portfolio to renovate and reposition . “ Having a relationship with our management company that we believe is best in class , we have a very strong upside potential here ,” he says .
28 hotelsmag . com June 2022