During our team’s 16+ years in the hospitality business, we have built, owned, and operated over 520 hotels across the country. The current lack of capital, combined with challenging market conditions, has altered the dynamics of the hotel business. We see the current challenges within the hospitality sector as an opportunity to selectively increase our portfolio through the acquisition and development of hotel assets. As with other real estate segments, the hospitality sector is highly cyclical. We believe performance and valuations are now past their lows and continuing improvement in performance over the next few years will allow for values to increase significantly. Our development and construction management teams have remained intact throughout the downturn, allowing us to quickly return to development of new hospitality product. Our development efforts are focused on high-barrier-to-entry and gateway markets. Our new development investments are able to take advantage of cyclically low land and construction pricing, where we can construct new product in these markets at costs that are well below current market values.
The chief sponsors of OTO Development, Wayne Huizenga, George Dean Johnson, Jr. and Dean Buntrock, are world-class entrepreneurs and as such, recognize the opportunity today to create wealth through the development of hospitality assets. With their financial backing and business acumen, we are approaching this new business model with the same commitment that we have demonstrated in our past pursuits. Our investors participate through a series of funds, known as the Palmetto Hospitality Funds. These funds provide the equity to develop and acquire hospitality assets and are the ownership entities.
Our preferred affiliation is with Marriott, Hilton, and Hyatt select-service hotels, who we believe are the strongest in the select service segment. We prefer select service because of the ease of operation, high margin opportunity, and resilience exhibited in the last downturn. Development efforts are concentrated in markets that we believe offer the most opportunity. Those markets include Washington DC, New York (Manhattan), Los Angeles, San Diego, San Francisco, and Seattle. In addition to feasibility underwriting and financial modeling, our platform allows us to manage construction and renovation projects and to provide top-quality property operations allowing our team to thrive through all phases of the lodging cycle.
Our talent and expertise in the hospitality sector include a full compliment of services. We have architects, engineers, lawyers, and financial experts on staff. Additionally, we have construction and development personnel based in most of the major markets where we have previously developed properties. These resources can be leveraged to bring expert underwriting and analysis to bear when reviewing hospitality opportunities.
Our current portfolio includes 35 hotels with all but two being self-managed by our internal management group. Additionally, we have four hotels under construction that will open in the next 12 months. Our operating team has broad and deep experiences and provides valuable input when evaluating opportunities.
Our team’s extensive knowledge of the hotel industry allows us to quickly and effectively underwrite any U.S. market. When combined with our ample capital resources, OTO Development can close transactions rapidly providing increased investment flexibility and a smooth, stress-free process for the seller.
If you are interested in discussing investment possibilities, please contact us to learn more.
Vice President – Real Estate
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