EXAMPLES OF OUR WORK
Our work each year varies with market conditions. Acquisitions and development when capital is plentiful and optimism abounds. Workouts, Operations Consulting, and Dispute Resolution when the industry is in a slump. Few engagements are routine, many are very challenging. A handful are good examples of the value we add when owners, developers, brands and operators need our objectivity and experience.
Over the years, David & Debbi Berins have helped underwrite scores of hotel and resort acquisitions as both consultants and senior officers of two ownership groups, Cypress Equities and Strategic Hotels & Resorts. Our clients and partners have included many institutional investors and advisors such as Apollo Capital Management, AIG Real Estate, Equitable Real Estate, Goldman Sachs, LaSalle Partners, Prudential Real Estate, TPG Real Estate and USAA Real Estate. Our focus has been on upscale-to-luxury class full-service hotels and resorts such as the W Hotel – Austin, Essex House – New York, Riverside Hotel – Ft. Lauderdale, Rock House Bahamas and Aloft –Atlanta.
For The Biltmore Company in Asheville, we started with the fabulous canvas of the 8,000-acre Estate to assess multiple lodging opportunities. Our market research and programming led to the four-star Inn at Biltmore Estate that opened the destination to overnight visitors for the first time. Other examples of our development consulting include The Inn of the Anasazi in Santa Fe, the Dream Hotel Nashville, The Lanesborough on Hyde Park Corner in London, the Hilton Anatole in Dallas, the Hyatt Regency Scottsdale Resort, the Lancaster Houston and the Hotel Bel Air in Los Angeles.
Examples of Dispute Resolution include a pioneering inverse condemnation case in which a state DOT built a high speed interstate ramp within 19’ of a hotel without taking any of the hotel’s property. Our help and testimony persuaded a jury that that hotel’s value had been severely impacted. Recently David served as one of three neutral arbitrators on a case alleging wrongful termination of a hotel management agreement. While two of the arbitrators were appointed by the parties, the AAA rules required all three to be neutral, and a unanimous award was issued.
Workouts & Restructurings
Over the past four decades, David & Debbi Berins have experienced multiple downturns in the economy that have materially impacted the hotel industry. Our workout & restructuring engagements have included hotel loan portfolios of failed banks, CMBS securities and individual properties. During one downturn, we were engaged on a recently-opened 300-room full service hotel and championship golf course operated by a branded international company. We negotiated termination of that contract and asset managed the hotel as an independent for two years until it could be sold for a substantial recovery. On this and others, we started with market studies and valuations based on our forecasts of future cash flows as well as detailed area-by-area reviews of deferred CapEx. This often results in requiring workout plan to restore the collateral to be competitive.
Our experience as Asset Managers includes engagements for the owners of the Four Seasons Hotel – New York, The JW Marriott Resort – Las Vegas, The Four Seasons Newport Beach, The Century Plaza and St. Regis hotels – Los Angeles, The Warwick Hotel – Houston, the Radisson Richardson, TX, and The Hastings Conference Center in Hartford. Our experience in the luxury segment bolsters our effectiveness in overseeing management of these hotels.
For a family-owned historic independent resort in the northeast, we were retained to perform a detailed investigation of operations, marketing, cost controls and opportunities for improved results. We interviewed managers and associates, examined processes and standards, and observed operations in all departments. Unfortunately, we found an organization riven by disputes between owner-partners, a culture lacking accountability and leadership, an anachronistic system of cost controls, and competing silos of associates eager to disparage others. Our reports to the partners and senior management led to a wholesale re-thinking of the asset and an agreement of the owners to sell the property to a large professionally-managed hotel company that has implemented the changes we recommended.
As part of a proposed ground lease extension on a luxury hotel we assisted the Lessor by identifying in great detail all the areas of deferred CapEx leading to a failure of the Tenant to meet the quality standard in the lease. We helped the client and counsel craft and negotiate key lease amendments requiring the Tenant to invest sufficient capital to completely renovate the hotel before any extension would take effect. A major part of our work involved negotiation of the detailed renovation scope and Design Briefs, Conceptual and Schematic designs. In addition, the re-working of the lease provided Landlord with greatly improved approval rights not only on this renovation but requirements for specific future renovations on a scheduled basis over the next five decades.