INVESTMENT
local musician to play in the alley for a few hours or yoga classes ,” Stambules says . “ But it ’ s something for the community and gets the word out .”
Stambules adds that Sage is well prepared to take advantage of many mixeduse platform trends that were already emerging and have accelerated as a result of the pandemic . “ Thinking creatively and about where hospitality can operate next is an opportunity that excites me the most ,” he says .
INDEPENDENT STREAK Even in the more traditional hotel development sense , Sage is looking to deploy capital in the urban lifestyle segment and is gearing up for the next wave of opportunity , which Stambules expects to open up in about six months when more owners may decide to cash-out versus reinvest in their assets , especially considering the increasing cost of capital .
Lobby and kitchen sitting area at Catbird , an independent extended-stay hotel in the Denver area
“ We ’ ll be playing on the investment side more and more in the independent space where we can leverage our IP and creativity ,” Stambules adds .
Sage is still shifting from just 17 independent , soft-branded , luxury or lifestyle concepts in largely suburban areas in 2017 , to today ’ s 43 lifestyle hotels in major urban areas such as The Crawford Hotel at Denver ’ s Union Station ; The Blackstone in Chicago ; the AC Hotel in downtown Portland , Oregon , and more .
Sage remains a net buyer with about 12 total deals in the pipeline in mid-August , according to Stambules . They include a mix of acquisition and transition opportunities , as well as a handful of development deals . In most cases , Sage is taking a minority equity position . “ The majority of those pipeline deals on the acquisition side are really transitions and third-party management opportunities – a lot with publicly traded companies that are making strategic decisions across their portfolio or might be acquiring with a lower cost of capital ,” Stambules adds .
Sage has already completed one investment deal this year in downtown Los Angeles , partnering with HN Capital Partners to convert the former Nomad Hotel to a lifestyle property called Hotel Per La . Sage came in with some fresh capital and rebranded the property with more of a community focus through its Sage Studio branding team and by using Sage Restaurants to create a new F & B concept .
Moving forward , Stambules says Sage will continue to look for urban lifestyle projects , especially as they start to see some pullback in the drive-to resort markets . He does see growth opportunities in those markets in the Southeast or the West Coast in places like Savannah , Georgia , or Napa Valley , California , but again more urban and not necessarily destinations with beach and sand . “ We think drive-to is going to pull back and there ’ s going to be this natural shift back [ to urban destinations ],” he says . “ We ’ re long-term believers in urban . While office might still have question marks , frankly , I think the rise of leisure , the change in length of stay patterns , and this rise of meeting and local events will backfill in different ways .”
He points to Chicago as having been very strong over the summer of 2022 at its properties like the Blackstone and Ritz-Carlton – big assets with more than 300 rooms . “ We ’ re seeing corporate start to return … Even with talk of a recession , hospitality feels like it might be a little bit insulated from some of those bigger macro headwinds .” Stambules adds .
Nonetheless , for some owners refinancing is no longer a great option and should lead to more transactions . “ There were pretty high valuations and numbers that , frankly , in these drive-to leisure markets we were questioning and did not deploy that much capital early on ,” Stambules says . “ We believe that the best
36 hotelsmag . com October 2022