M Development acquired Amangani in Jackson , Wyoming , from the Canyon Group for nearly US $ 2 million per key .
INVESTMENT
M DEVELOPMENT marches to its own beat
ACQUIRER OF AMANGANI IS ALSO DEVELOPING IN ASPEN , COLORADO , AND ITS PRESIDENT SAYS THE TIMING IS RIGHT FOR FURTHER LUXURY DEVELOPMENT AND ACQUISITION IN THE U . S . AND EUROPE .
by JEFF WEINSTEIN , EDITOR IN CHIEF
In March , Aspen , Coloradobased high-end developer M Development acquired the 40- room Amangani resort in Jackson , Wyoming , for a reported US $ 2 million per key . The price paid for the first Aman-branded resort developed in the Americas raised some eyebrows . But quite honestly , says M President Brandon Tarpey , the market-driven group didn ’ t bat an eyelash . In fact , Tarpey says the price per key method of valuing hotels is antiquated and should go the way of the dinosaur .
As hotel buyers , Tarpey says M Development is much more focused on yields and traditional real estate metrics such as price per foot as opposed to price per key . “ I think that ’ s a useless metric and within 10 years no one will even be discussing that metric ,” he predicts . “ With the growth of micro-hotels , what does price per key even mean anymore ?”. To back up his premise , Tarpey cites another theoretical example – an all-suite hotel in a luxury market that can be converted to residential . “ Does it really matter what I paid per key , or is price per square foot more relevant ? Most hotel brokers can ’ t even tell you what net saleable or net rentable per square feet is ,” says Tarpey , who has been with the firm for two years after spending about seven years with the ownership group behind Gurney ’ s resorts in New York ’ s Hamptons and Newport , Rhode Island . “ We ’ re traditional real estate investors and buy with fundamentals , and we ’ re going to continue to do that across asset classes . The arbitrage we see is looking at hotels differently , and if the market thinks we pay too much well that ’ s okay . We really don ’ t care . We buy on yield , we buy on replacement costs , and we ’ re going to continue to buy hotels with that model .”
With another two luxury hotels under development in its hometown of Aspen and taking a cautiously
44 hotelsmag . com September 2022