The Art & Science of Brokering Hotel Deals
The US CRE Hotel space is the most attractive in the world, it is huge, liquid and very profitable. Of the $500 billion a year in CRE transactions, 8%-10% are hospitality related, and another $30 billion in new hotel constructions means around 50% of the worldwide supply is in the US, 68% of it upscale and midscale.
And 70% or so of transactions are for “single assets”, an area my group, The Poler Team, has specialized. We analyzed some 400 hotel management/operating companies, REITs, and Private Equity real Estate Investment Funds, involved in some 10.000 hotels to understand how to maximize the dealmaking process.-
Our experience and relationship with hotels goes back decades, it is in our DNA, from family ownership of several properties in Latin America, working for Sheraton and IHG in management positions, and today’s Real Estate expertise as marketmakers.
Buying and selling hotels is part art part science. Trust and confidentiality are key to maximize results and avoid the disruption publicly listing a property generates.
Matching an interested buyer with the right property is a dance that can happen very quickly or over a period of months if not years.
We have spent years developing relationships and building trust with investors, family offices, world leading hotel companies, management and development companies, and compiled a criteria list to help us identify the right opportunity for the right investor. From location, to size, to risk profile, some investors are looking for efficiently run operations, others want challenges that fit their turn-around expertise.
We prepare a list of suitable properties for their review combing through various sources and databases, narrow the list to the most promising ones, and only once the investor vets it we approach the property owner.
To keep track of these interactions and opportunities, and help identify a good match we use a combination of third-party technologies, self-developed algorithms, and we are just getting into ML-AI (and by clicking and reading this article you are helping us here!), creating our own secret sauce.
In this approach what you don’t do is as important as what you do. And we do not try to tell the buyer or the seller what is good for them, where they should invest or what to do with their or their investors’ money. They are the experts there and we are not. We focus in creating a market and helping both parties identify themselves and build trust to reach a deal.
And so far we have been very successful in paring and closing many opportunities, privately and confidentially.