Equity Opportunities in the Economic Dislocation of Hospitality Assets Today

By Joseph W. DeMatteo Sr. – Founder and President at JDM Capital Hospitality Management Group

Within today’s economic disruption, opportunities are emerging to develop, redevelop, and repurpose Hospitality projects utilizing ready/rescue capital, new strategies and new visions. Devastating occupancy percentages and revenue decreasing ADR and REVPAR have been hit with higher costs of operation and a need for an expertise and capital combined solution for an industry wide problem.

Current operational demands requiring asset repositioning is a reality. Increases in the costs driven by demands of clients, workforce and mandated municipal procedures have brought a demand for compliance that has never been underwritten for. This has caused a major impairment to the entire hospitality and travel industry. This expansive economic dislocation has brought all previous investment strategies within Hospitality projects to a massive unknown. The need for operational expertise, with a finesse of experience and new safety standards are the new pathway for value extraction. These require new capital commitments, time lines dictating a more critical path for the success of each investment decision. We now have a greater time line with a larger cash requirement to the path of stabilization. It is a moment in Hospitality where dollars that are more needed to solve problems and create ways of unlocking efficiencies. The near term value dislocation as underwriting and costs catch up will be an opportunity for the greatest multiple for investment in the medium to longer term. Because this is not for the simple, the faint of heart or those without know how, it will be a narrow field demanding the most for its returns. It’s unprecedented, it’s important to life safety factors of this asset class and one that requires a fortitude of being solution focused.

This is the opportunity to bring the combination of capital and capability to the hospitality industry and be a market leader of choice on selected assets in selected markets with the best of class properties having near term needs and longer term outperforming metrics for investment.

Discussion Points:

  • Why a hybrid private equity structure that utilizes debt and equity is the optimal structure for hospitality deals?
  • How does a unique asset with a strong or standout location aid in value extraction?
  • Optimizing hospitality investments via major operational control for General Partners via day to day management rights?
  • How to build an optimal portfolio of hospitality assets that includes opportunistic, redevelopment, construction, project completion and rescue capital?
  • What are the target returns at a portfolio level for hospitality investing post COVID-19

Joseph W. DeMatteo Sr. – Founder & President

For almost three decades, Joseph has been a leading industry expert in the fields of hospitality and real estate management. His expertise in all facets of hospitality allows him to create one of a kind experiences that drive consumer demand and consistent returns for investors. An industry thought-leader and dedicated teacher, Joseph has spearheaded the asset management and hospitality programs as a faculty member and lecturer at NYU Masters Program at the Real Estate Institute, and Northeastern University’s D’Amore McKim School of Business.

His educational accomplishments include a B.S. in Finance from the State University of New York, the completion of an Executive Management Program from Harvard Law School, a Degree in Building and Construction Management, Certificates in International Business and Finance & Hotel Operations all from New York University.

 

Gregory Bernhart – Senior Director of Investments

With his successful track record on the New York Stock Exchange, Gregory rose to partner in a family-owned firm which became part of a multi-billion dollar acquisition by Goldman Sachs. Gregory spearheaded market presentations for investment banking opportunities with new institutional clients in China and Brazil. From market making in IPO’s to secondary’s in REITS and infrastructure companies, Gregory’s financial expertise is a driving force in the selection and success of JDM properties and investments. Gregory holds a B.A. in History from College of the Holy Cross and a Masters in Finance-Portfolio Management from Pace University-Lubin School of Business.

JDM Capital Hospitality Management Group ; provides operating and financial support for the day to day management and asset oversight for direct acquisitions, joint venture partnerships and control decision participation in co-general partnership opportunities for hospitality properties worldwide. We buy, brand and build to bring the solutions most needed to fix a complicated asset class.