A one-bedroom suite at the Park Lane in New York . |
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Highgate Hotels was founded in 1989 by brothers Mahmood and Mehdi Khimji . ( Azarbarzin likens Sternlicht to Mahmood — someone who is as laser focused and energized on design and people as he is on investment returns .) It rapidly grew as a premier owner and operator of hospitality assets and today is one of the largest operators of real estate in New York . Azarbarzin joined Highgate in 2021 , going from a company in SH that managed just over 12 hotels to one that has some 87,000 rooms under its management belt , with a huge concentration in the select-service segment — more than 300 , to be exact . Those are led by Robb Dann , COO of Highgate Select , and that helps take a lot of pressure off of Azarbarzin ( there are also four EVPs with oversight over specific regions ), who is freed |
up to be more of a people CEO . “ I ’ m fortunate to be able to touch more people and more assets and have more resources available because we ’ re such a bigger company ,” he said .
BUSINESS MODEL The hotel industry over the years has become more and more professionalized , a playground for institutional investors and mammoth management companies . Over time , companies have become more specialized and circumscribed in their business focus . Brand companies turned asset light , alighting from real estate ownership , while thirdparty management companies stepped in to fill an operational void .
Highgate has bucked that trend — one of only a handful of large firms that own and manage assets . Azarbarzin said
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it gives them a perspective that others don ’ t have . “ We put our money where our mouth is ,” he said . “ When we do reports and marketing plans , different things that we put together for a hotel , we always look at it from an owner ’ s eye and our owners appreciate that .”
Owning things is not going away for Highgate . Azarbarzin said that the company would likely grow asset to asset rather than by acquiring other management companies , but it did make a large splash on the brand front when it announced it was acquiring Viceroy Hotels & Resorts in December . The deal is likely to close in the next 30 days and , though not in name , it ’ s effectively Highgate buying Viceroy ’ s 10 current management contracts , with the aim to grow the brand in urban gateway markets and resort destinations .
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Azarbarzin indirectly has ties to Viceroy . For 10 months , he was president of Proper Hospitality , a company founded by Brad Korzen , who founded Viceroy in 2000 and was CEO before it was sold in 2012 . Because of that , Azarbarzin said , he ’ s been following that company for some time .
“ We didn ’ t wake up one morning and say , ‘ Let ’ s go find a brand to buy .’ We saw an opportunity where we can add value to a brand that has not seen the growth that it should have for many reasons ,” he said .
It ’ s early , but expectations are that current Highgate assets could be converted to the Viceroy brand . “ Our hope is to add value and , most importantly , scale it ,” Azarbarzin said . “ With our resources and capital partners , we clearly have a path to grow the platform .”
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May 2023 hotelsmag . com 29 |