YOU NEED TO THINK OF IT FROM A HOTEL PERSPECTIVE – WHAT IS SUCCESSFUL IN THIS LOCATION AND WHAT NEEDS TO BE DONE TO THE ASSET TO MAKE IT SUCCESSFUL FOR THE OPERATOR . THEN IT WILL WORK AS A SUCCESSFUL PIECE OF REAL ESTATE .
– DR . VOLKER KRAFT
Kókai , principal and head of hotels , will challenge to match the first asset in Venice but will pursue deals in growing and attractive European cities that tend to attract both business and leisure traffic with longer seasons – think Florence and Paris .
With a long history in retail ( ECE is the largest shopping center developer and operator in Europe with more than US $ 5 billion in assets under management and privately owned by the Otto family ), Kraft said the company has learned it can be a great retail real estate investor if they have successful retailers in their assets . “ This is very true for hotels , as well . You need to find places with happy , successful operators , and then you can make money on the real estate ,” he said . “ You need to think of it from a hotel perspective – what is successful in this location and what needs to be done to the asset to make it successful for the operator . Then it will work as a successful piece of real estate .”
First in Venice , the group is planning a lifestyle-focused renovation as well as the selection of a global management company for its new property acquired when a deal broke down for the selling family .
Kókai said there is already a lot of competition for the management contract with a hybrid lease , adding that a niche player might be a good fit . ECE will be methodical in its renovation and expects to have the repositioning completed in early 2023 .
There are two back-to-back hotels on the site and ECE plans to connect the 115- and 70-room spaces through the ground floor and spend about € 150,000 ( US $ 177,836 ) per room all in . An underutilized terrace and restaurant are expected to become the new focal point to make it an all-day destination .
In the meantime , the new fund will start to source deals and Kraft said all the ingredients are in place – an investment track record , development expertise and now operational expertise after it took a majority position in German lean luxury operator , Ruby Hotels & Resorts , Munich . Now they have perfect market timing with COVID and the ability to take advantage of the crisis .
While acquiring at a discount would be nice , and those discounts may escalate after banks start to lose their patience , for ECE the strategy is to buy quality at a decent price . “ We have a value-add strategy but we are not a vulture fund nor do we have a steep discount strategy ,” Kraft said , adding that new deals
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