INSIGHTS FROM THE HEAD OF ONE OF THE WORLD’S LARGEST REAL ESTATE PRIVATE EQUITY FUNDS

to kick-start this morning's program we're interviewing one of the most dynamic global real estate entrepreneurs to host the conversation we are pleased to have with us J henyk global chairman chief executive officer and the largest shareholder of Colliers International Group Colliers is a leading global real estate services company with 12,000 professionals operating in 69 countries J is also the founder chairman and largest shareholder of first service Corporation a North American leader in the essential property services business in 1998 he received the Canadian entrepreneur of the Year award and was also named Canada's CEO of the year in 2001 by Canadian business magazine please welcome J henyk who will introduce our distinguished guests good morning everyone I think many of you know who my guests to my left is your right welcome Barry it's an honor to have you here and we all look forward to your your insights many people in the room know Barry Stern look is the chairman and CEO of Starwood Capital private investment company he founded in 1991 Starwood is focused on global real estate hotels multifamily office retail and single family rentals among many other things so we're just unfocused including myself your people sent me this I'm doing the best I can Barry also serves as the chairman of a very interesting real estate property trust called Starwood which is the largest commercial mortgage REIT in the u.s. today his firm manages more than 60 billion in assets on behalf of high net worth individuals and of course institutional investors from 1995 to 2005 Barry was the chairman and CEO of Starwood Hotels and Resorts he found it he built it into one of the leading hotel companies in the world but importantly he also created the W Hotel brand and built the st. Regis from a single hotel into a global brand that everybody's aware of 2008 he found that SH group his current management hotel management company which owns the baccarat hotel and resort chain as well as the new one hotel brand which we're gonna ask you a little bit about in a minute so please join me in a huge round of applause very sternly okay let's jump in Barry you've participated in a Toronto real estate forum two or three times in the past and the first question we always ask is what do you think about the real estate market in North America I'll use North America as opposed to Canada over the next 12 to 18 months what do you what are you seeing well first thanks for having me back it's always fun to come up here even though I'm living in warm Miami these days and it's not warm up here I've caught a little cold but it wasn't a Canadian cold it it had predated my arrival here so I think the world is fascinating it's interesting your poll 60/40 negative or and the US economy was catching up to world global economies that were moving further ahead than it was and now that's reversed the US economy is kind of dragging along global economies the Chairman gee he was negative Japanese GDP last quarter was negative and people are kind of worried about China China obviously engulfed in some conversations with our POTUS which are gonna impact its future growth but you know when we raise capital in the sector we have three green lights we talk about the real estate cycle and and the first one can you still buy assets with positive leverage and you can still do that you still buy it yield an ants inside of that and and that if you're picking decent markets that you get paid to wait to buy it is six finance at a four and you get an eight or nine whatever your leverage is and you wait if you get the growth right you get a reasonable return that spread between cap rates and and interest rates is highest in Europe today and it's a focus of ours right now we are very tilting ourselves towards Europe because the risk of rising rates in Europe is a lot less than it was before Powell spoke yesterday in the United States but the spread is especially things like multifamily has closed significantly of us you just have to own the only place in the world you could get the spreads of five four or five cap rates and finance that one was Japan but now you can do that all over the world particular that's one positive leverage to supply are they building a ton and that has some pockets of problems there's definitely I was driving by some gigantic hole on the way here this morning and I'm wondering what could possibly be going in that it looks like as big as Canary Wharf it's gigantic hole oh I don't know what direction I was coming Bobby the well it was huge and then it's funny for a market that that globally is really disciplined in the bank sector I I I'm marveling at the amount construction guys and there's a lot of construction and and and I get because we we run the largest property trust the mortgage lender in the United States not a bank we see a lot of submissions for construction loans and one was submitted to me recently a hedge fund manager in New York has gonna build an apartment building and the two buildings behind it are currently selling for like four dollars a foot he's building directly in front of it he's gonna get $1,000 a foot NOLA the loan is only six hundred dollars a foot my I don't even want the debt never less the equity so the markets have you've seen irrational exuberance people's desire to build in certain markets certain property types certain hotel markets obviously some multi markets in the u.s. so supplies it's not as green as it was in general like office is not really over built in the US and we're seeing some really good rent growth and various markets really good and you don't really have a massive supply issue in Europe although there's surprising construction but most of it is pre let so Europe looks better on the supply side again and the third one for us is are you paying are you can you still buy assets below replacement cost because if you're paying a big premium that only induce more supply and the stuff you bought in the first case of a positive leverage well the rents will go down if there's too much why so there you have to be honest with yourself if you're buying a thirty-year-old multi paying ninety thousand in a new it caused two hundred thousand to build not actually yeah you're buying blow placement cause but it may be an obsolete asset you know it should be significantly cheaper than new construction on the other hand it attacks the market from a position of in charge less rent and so in the u.s. we were the second largest multi owner in the country we had a hundred and twenty thousand units at peak today word seventy seven thousand units but I think that makes us the third largest property multi market market rate apartments states and you know people ask where we think we are in that cycle and we just sort of we're buying and selling we're doing both although the you know it's not as easy pickings as it was before so all three green lights are still there one of them is I'm beginning to turn lime green or lilliput yellow which I'd say is supply I do think we have you're at an interesting point I'm very cognizant of economic cycle and I think the US will slow down in 2020 and maybe materially and you can't think about Merkel or all the other situations in the world that could upset all this what you do know is on top of a for something on rate when Trump took took off as he passed a 300 billion dollar stimulus package that nobody saw coming and he made them spend it in the two years to the midterms but we spent 170 billion last year we'll spend a hundred and thirty billion this year and then we run out of gas then there's no more money up to spend in 2020 so just that alone on top of a labor market that's so tight now that you're creating major distortions in the labor market I think we will I don't think will go negative but I heard this morning to a pundits on CNBC say 2.8 and 2.5 GDP I think you're talking single digits like a 1 a 1 handle and it's probably because also I don't see Congress doing anything and with a split Congress I don't see them getting another package through Trump would just he loves this he isn't on adult he's the biggest checkbook ever and he's just write more checks they're not they're not charging me for all this overdraft I have the permanent overdraft I'm running at I'll run a trillion dollar deficit this is the man who ran on these covers which were so big and we're running we ran a hundred billion dollar budget deficit last month in a raging economy unprecedented that's the biggest risk I see you know in a world of floating in liquidity and we went printing like 12 trillion dollars globally in the financial crisis there's so much money out there it's staggering it's weighing on global rates you know it's everyone's searching for yield and we all would have expected the US 10-year to be three and a half for some guys had it at six smart people and it's 304 last night I don't know where it was this morning and III the big worry is people say enough of I'm not going to buy your bonds we're gonna be issuing bonds as far as the eye can see and and he's you know the economy from a fiscal discipline standpoint is a complete shambles and the Japanese and the Chinese who bought half of all the paper that the government issued in the recovery aren't buying anything anymore so the only one who's going to buy it or probably domestic players the governor isn't buying either they bought another 40% of it so who's gonna buy all the debt if it's Oz individuals or institutions we're gonna take the money out of the equity markets so so so let's let me let me help distill this a little bit I probably need a drink there's a drink right there I think my salesmen so so actually fairly sanguine but go ahead a lot of great insight a lot of great insight but let's distill it down 2019 is it gonna be this much of the same is it gonna be a little up a little down you said I think the 2020 in your mind will start to fall a bit is that your general yes 19 won't be as good as 18 and 20 won't be as good as night so and I think you have momentum use economy strong the labor pressures on construction costs and are really heavy we are seeing massive increases in production cost innervates both in land development and materials the labor of construction jobs the average worker construction guy in the United States like 55 there just aren't enough construction guys and we so you're having all kinds of problems a housing market trades in New York City building a hotel they are very busy the construction workers and there aren't that we thought they went to frack when they look I didn't offend Oh 708 all the homebuilding guys they became frakkers and then the oil market crashed and then they didn't come back we don't know where they are so we don't have the construction background that we had but this all leads to why I'm still relatively bullish on real estate because everything you own is gonna be worth more is it cost more to build so and there's two scenarios right that we think about one OK rates rise in the u.s. they resume on the strength of a very robust economy if that happens I think we're in good shape in those statements but I'll stick to the US for a second because you'll see demand increases with wage increases we owned badly some retail properties the retail sales are picking up because the average guy has some little more money in his pocket got 15 bucks an hour not $11 an hour and he's spending that money and they didn't buy the new iPhone so that thousand bucks he can go spend on boxing hats and clothing and things we sell in the malls though there's one scenario that rates rise demand rises faster rents continue to rise offices absorb business cycles good hotels are full that's a really nice cycle modest inflation 2 to 3% 3% three and a half percent ten-year that's probably great because you're gonna have rising construction costs and the gap if you own we just bought a tower in downtown Portland the Wells Fargo headquarters in tallest building in the state maybe two states and we bought it for like 280 dollars a foot you couldn't you couldn't build this but the steel in for two hundred dollars a foot and we're retrofitting it will clean it up we leased the base to one of those shared office companies but we think that's great invest in great risk reward investing on the other hand if rates rise because it's a global strike on credit that people hate us they don't buy our debt and there's nobody to buy our debt and we're issuing a hundred billion then 120 billion that 140 billion were kind of in a death spiral on our deficit and the entitlement wave the Aster hasn't hit us yet and we are the reserve currency of the world so we get away with it at some point the Chinese if we really pick a fight they're already buying all the world's infrastructure and they control I had I was with the head of OPEC the other day the overseas Private Investment Corporation which is a private funding arm of the US government they used strategically to create development around the world he said five of the six ports the Panama Canal are owned by the Chinese terminals for the containers and they were asking or actually begging an American to buy the remaining port so we would have at least a terminal the Chinese decided to close the Panama Canal they're they're buying port in Cartagena outside Carter Hammond Columbia the Chinese and it's a strategic military base for the United States that region I mean they're not while they're Trump is screaming at them doing everything else he does they're not they have a plan B and they run the country like a company with a very good CEO and they have a hundred year plan not a quarterly plan so they are definitely on the move globally Latin America I was with the president Macri of Argentina for lunch every tender for every infrastructure project has been bought by one by the Chinese and they are busy busy busy and we are not that big a portion of their exports anymore we were not anymore so there they're preparing themselves to gird for battle and and with with our ego and it's it's an interesting issue as particularly has it rate it interesting as it so we're gonna go slower because in CEOs of which I'm one are nervous like we don't exactly know what to do with our capital spending so capital spending the United States is slowing down it used to be on the board of a multinational we used to you know what we're vesting in China we have a fast-growing business in China is estee lauder it's a cosmetic company but on the margin now do we build that plant in China or do we build it what is gonna happen a repatriation of capital well the Chinese confiscate our assets will they have a national embargo against American goods and the growth market in the world for most American companies was the Chinese middle class the expansion of the Chinese markets even if there were to our standard the market so it's a fascinating world in the scenario that a boycott our debt that's really bad and it's bad for the economy obviously craters real estate noon today provides yield we're not gonna be a bad place to hang out I mean it's gonna be at the end of the day if you if if they can't if rates skyrocket they would then fall right because they push the economy into recession globally Canadian everyone's and so rates go down and now you're yielding properties look ok getting from here to there is gonna be a challenge but don't have debt that's expiring so so if rates go up sort of modestly there's job inflation tens can pay higher rent that's all good if it if they if they start to rise as a result of some bad things some of the things you've just talked about not so but zeroing in on the CEO comment that you made what are you doing with your portfolios are you long is short interest rates are you somewhere in between well as it is it different in different geographic regions as an example peri so I think we have our last fun that we just lay it raised early last year is seven and a half billion the last the one before there was five six where that was for two these are the opportunity funds we do other stuff and they invest in globe real estate globally personally the only risk I see our funds look really good our ninth fund tenth under both twenty I are ours and fairly solid so didn't say that like that I have to go now but you know they're the they both have returned all their capital and then some so they're fairly well baked but the big risk is exit yields right we were all worried that rates would rise and we're getting a bit of a of a timeout now with rates actually falling in the US because there was a perception the economy was slowing and so personally what I did is I shorted interest rates I have a massive personal hedge and my against my real estate book by shorting at us ten-year and I'm I caught an insurance rate because the only risk in our portfolio is I'm selling my Maltese not at a four and three-quarter five and a quarter five and a half but it is six and a half and I can't directly hedge my funds my institutions would be pissed if I lost money in a big hedge but I'm not gonna sit back and watch this happen which was pretty obvious this could happen so they had your real estate exposure and heads yourself with rates because it is the cap rate on exit that's gonna you know the rising rates are big and we just sold a couple of billion dollars in multis who has something got before three and a four six cap both to offshore capital way inside our expectations frankly but the markets are even thinning there you know that that because the buyer that was simply like I had friends just buying Maltese banan Singh him off LIBOR and pocketing eight nine ten 12% cash-on-cash yields that trade is over right now so they're out you have poor guys back in and look at the global flow of capital the Chinese have left the market right they're gone we've had two different Chinese groups walk on deals we had with them they're not even allowed to buy hotels in the US right now or gaming or entertainment they're gone the Canadians have kind of pulled back we don't see you the way we saw you a couple years ago cities like the Orkin other big places you show up occasionally but your cherry pickers now sadly we like the wave of indiscipline investors where did you go you've gotten way too smart the which is true actually your institutions are good and they're solid and get good team place and they do stuff themselves Europeans are dabbling in the u.s. oh the Koreans were really big and pulled back because what interesting thing happened which is nothing to do with real estate but the changing yield curve in the United States made them actually lose money or gain nothing swapping into dollars whereas European investors to us like if we invest in Europe right now because the European curve in our curve we're picking up new 300 basis points in the IRR so we have a much better play to there than and and they have a and so the money from Korea is drying up now we've seen Southeast Asian money and the Middle Eastern money you know depending on what your he was on the Saudis the the piff the big fun that was supposed to be funded by Aramco's IPO it never happened so they have $50 oil again this morning and they're not gonna be yeah well I I don't know if they'll be able to fulfill or expand dramatically their commitments and property so who is gonna buy where's the big tower buy are gonna come from right now it's not obvious to me and we're actually looking at some major office deals and some markets and though there's there are big opportunity funds and there are we all have money from dozens of sovereign wealth funds quality's gonna work in this cycle so the best stuff will trade with long-term holds but the tangential stuff in marginal said it's not obvious today where the money the big where's the big money and everyone prices off that marginal guy he was the Chinese like they bought that deal everybody thought they were rich because they bought its recap and that's gone so you know we you you're finding some outlier bids but there aren't as many people as there were before so I would say pricing is holding but that's a little down but it's not it's not down as much as I would have thought it should be down and there's a lot of dry powder in funds but the big institutional buyers don't seem to be around the way they were so I'm curious at you as to your view on this some people have said that that the real estate market now has matured to such an extent that the volatility that we once saw in real estate is going to be muted more sophisticated investors more access to capital more disciplines what are your thoughts on that should I use this Sam Zell word it's tribute that's the Sam I didn't say that I'm much more polite person I I don't think we're gonna get the Sam I think that's wishful thinking I mean real estate guys are like locusts you just give us money we'll build right they come out of the ground you think they're dead and they just come rise out of the ground and they build in their backyard we can't help it so no I used to you still see things like absolutely I mean like look at the hotel marking United States Marriott and Hilton some extent high it bought Thompson hotels in two roads they are actually worried about their fleets I think they'll they'll never admit this they have a product and merit and Sheridan that's kind of like Kellogg post cereal it's old it doesn't appeal to Millennials it's like it's kind of like boring and people want more they want something more the Millennials they want experiences than want authenticity so they're busy now trying to diversify their fleets they've got true and I'm edition and whatever else they're doing a home to sweet home sweet home to sweet sweet sweet they have a thousand new brands and they're building a thousand of them as long as they can find someone to build them they'll either support the development or they'll cut their fees going in but you're seeing a lot of companies panic to actually provide new product to this powerful millennial generation which is 94 million people strong in the US and largest cohort of our entire demography so I think that and look at the shared office space you know that is a full-grown frenzy in the United States and there's about I think that somebody told me there were 65 shared office companies operating in Manhattan I mean anyone can be in shared office you get a beer tap and four desks and are in business and so a pool table may be a small one because you got to get density but you know these businesses they're interesting businesses they're changing the way we work funny work we work and and it's it's the products are changing and technology is is helping I was talking about this yesterday it doesn't help you to have great data I was on a panel with my former partner Bobby faith who runs great store which is the largest multifamily operator we're talking about data how it influences our business having great data which we have and we know turnover different in Atlanta for apartments than it is in Dallas than it is in Denver than it is in Phoenix we can use that data to perfectly underwrite the assets so we know it's 17 percent turnover the apartments in Atlanta and 45 in Dallas that will affect your capital cause it doesn't help you against the stupid buyer it also doesn't help you against a buyer that has a lower cost of capital than you do you can have all the data you want it won't matter where it will help you is you could run your property's keeper theoretically out sourcing energy buying better you would better purchasing sourcing modular construction whatever it might be technology's gonna change probably lower the cost of entry I mean if modular really takes off people are talking about construction costs for apartments 30% lessen earning cost if you can do that then you better be careful with your existing stock because all that pressure on rising construction cost is went the other way they're falling and now you have obsolete properties at a premium to replacement cost you have to really watch these things the good news in real estate is it doesn't hit you overnight they're big waves right you can just see the waves coming and going just ride the wave don't stand in front of it watching a crash on your head though and that's what we try to do because we're moving big capital and we try to anticipate flows and and wait for the most part we've been reasonably successful over what's now a legal career I started in 91 yeah so just talking about that let's go back to let's go back to some of the early years after after after business school you you join J&B Realty a company led by Neil Blum many people here in this audience will remember that J and B bought Cadillac Fairview which turned out to be not such a good deal for for jmb but ultimately created an opportunity oh no there's a really bad deal for their investors it was a decent deal for well where did you work on that deal no but I was there are you sure I I actually did meet one of the Brahmans Charles yeah I'm reason in that process but I wasn't working on the deal I was having another deal but we were making or they were making I got a twenty five million dollar management fee right we were like one undergrad college girl who was watching the deal for them and and so the profit margin on the fee was pretty good and Neil sued when they lost their money they invest lots of money sue the investors for the rest of his management fees it put him in the penalty box for quite a while with the institutional community but I had nothing to do with that but let's just look at it that is a quintessential psyche bad cycle deal because it was negative leverage at the cap rate on the malls of Cadillac Fairview was lower than the cost of financing so if it didn't capsules didn't rise you went bankrupt and they went bankrupt so it was a really bad cycle play you know the most interesting thing about Neal was a great mentor and I learned a ton from him still friends with him he's my first investor I'm sorry Capital Group he idolized the reichman brothers absolutely and people don't remember that the reichman's were the richest people in the world and they were here right and he'd come up to Toronto and that 20 time J&B was like 24 billion in real estate it was enormous back then that was a huge there's probably I said 300 billion or something I don't know with inflation and Albert would say you know rates are going down Neil would run back to Chicago and change things higher firm's balance sheet based on it was like coming to see the Lord and he'd come up here was like Moses spoke to him about rates and we followed the reichman's chill to Europe to London yeah they were they were building they done this deal with a company called Stanhope they built a lot of the assets in the City of London and then they did Canary Wharf and I remember I was in Neil's office when Albert and Paul called him and said we will sell you an interest in the Canary Wharf and they Niels like how much should it be me and said well we don't actually know what's gonna cost but maybe around five billion for your interest in it so Neil actually decided that we'd get bigger into London we bought a company called brands worth I did work on and we lost our buddy and it was the most important deal of my career by far 1988 was a cycle Barry or so you know it was exactly that you know you had the richest people on earth plowing as much money as they could into London market I went to see 14 property analysts in London 13 were wildly bullish one said get out of Dodge I didn't pay attention I learned this about investing I mean pay attention to the outlier like why is that one stock at 32 times EBIT dot and everyone else's 22 or why are they 12 and everyone else is 22 you learned from the outlier for me and I said this in an article that came out yesterday actually I learned intellectual humility Neil bloom said to me you know if this is the top of the London office market then blah blah blah and he's on the Forbes 400 and I'm worth like negative eight thousand dollars I'm like okay right but I looked at it we had a second deal tied up we were buying the twin of Stanhope that was called Rose house but together they built a lot of the buildings in the City of London and we were set to close and I walked around London he was on vacation and Tucson I called him from London he sent his closer over to close the deal we would have done this one in our PA and the firm's personal account was Neil's own money and I said you can't do this deal yes what we what happened was interest rates were 14% and we were buying properties at six caps and actually what it's interesting because we'd arrange financing it like nine and we thought rents were gonna grow and we get out of that thing that mess and he came up here and somebody says I'm the rates he floated the rates and they went the wrong way and when we closed it was 14 percent so you have properties earning six and dead at 14 I could look out two years I'd see they were in a cross we're gonna go bankrupt the day we closed and I walked into Judd Malkin's office and I said you got to go raise more equity said we can't the way you're gonna go bankrupt there's no other choice I can't go back two years later they had to go back I did do a raise but they didn't raise enough and they went again did they did closed they closed they did not the not the one in his PA okay when I called Neil on Rose how he he backed off he we left the closing table and and we walked away and if we'd done that dealing it would be in trouble today though but I think you learned from your mistakes right and that was I I didn't make the call but I did the work I was just a VP at the time but very smart guy wasn't really in the driver's seat wasn't paying attention and we didn't listen to the outliers so that's what you learn from so for me you know I say keeping when you're successful keeping your lecture humility and wake every day assuming you have a thesis but you have to have a thesis to live and invest at least and invest in but be wary of being a butt like a blockhead taking all this data and challenge your thesis all the time and if it's over change your thesis write change your mind I I have a friend Paul Tudor Jones one of the greatest hedge fund traders in the world has ever seen and I was with him Apple a year ago or so and he's like I love gold of course I go back to my office and buy some gold and then gold goes down I call him up he goes oh no I liked it for five minutes did you call me so uh these guys so we get to do that we have to stay aware of the you know you're on it the way I play real estate I'm all-in I like if I'm doing this I'm gonna give it my best I'm all and I lead everything I listen I spend a lot more time today on global factors because the flow of capital overwhelms fundamentals I've learned that the hard way right I mean we see people do dumb things and get bailed out and make a lot of money so pay attention to the flow of capital the fundamentals you can get run over being right by money going out and coming into other asset class the flow of capital and and that way one of the other disagreements I had with Neal was I told him I think was 9 1990 is the bright before the big S&L crisis we were sitting and I was asking Neal because I wasn't really a real estate guy I said why are we buying malls at 6:00 when we can buy corporate bonds at 9:00 he goes realest it's just different it doesn't make any sense to me why would you take all that risk and operational child's when you can buy he said the real estate asset class isn't like the other asset classes and it is they're all these asset classes are correlated to each other you learned in oh seven oh eight that everyone was long everything everyone was levered long the only thing that rallied in oh wait oh seven oh eight not oil I was bonds his people was a flight to safety everything else venture private equity real estate gold oil everything went down and so and obviously affects real estate because your pension funds are all the Sun over weighted to an asset class they get to mark down more slowly than the stock market right and then all the money stops and so you must pay attention to the flow of capital and and if you're in this business you should you know you can have your little micro deal you can be building your properties but if you want to get lucky or or find the warning signs to get out early or pre sell your building think about the world so you leave J&B and you start Starwood which of course has been the great success over a lot of years you started in the in the multifamily which which I think you ultimately sold maybe to Sam Zell he probably paid you too much money right we tripled our grave dansad or paid you too much money hit it again later but yeah we we sold we put 50 odd million dollars and we made 180 million dollars and so Starwood that was our ten-year plan in 18 months for Bobby Knight so you enter the hotel business and I think this is this is something that a lot of people in the crowd want to hear about what's so great about the hotel business you've had an unbelievable career I talked about some of the things at the outset what is the you know what are the two or three things that you always think about in the hotel business and what makes the big difference for you I when I entered the real estate I really loved architecture fine my mom's an artist I was an artist in high school I would have been an artist my mom said I was gonna starve so the only place that I can really I felt that I could execute my design side of my mind was in the hotel space so I really wanted to do W hotels I wanted to create a cool global boutique we it you could still get your your wake-up call or or your your decent food and I was really good friends with Ian Schrager but I thought his hotels were we're too cool like the TV if you're in bed the TV was over here and was this big and there was no service at all so we did a branded boutique and W and that was sort of fun and it took off and I remember the Prudential analysts walking through the first W in New York City with me they what do you in doing this is a fad and it fails it's not gonna fail and it turned out to be hugely successful so what I what I look what I try to do in hotels is I didn't know I was doing it but I I've always tried to create experiences I create something that's memorable and that applies to everything you own in real estate but in today particularly in retail I mean if you don't stand for something you don't survive in retail people talk about one hotel which is you're cursed so one hotels when I decided I was gonna do enough I didn't own W I built it in Starwood hotels and I was a CEO and I did well financially but I would have done a lot better if I owned it personally so I decided to do another hotel brand but I kind of made a lot of money I didn't really want to do something just another hotel brand so I said well I admit Blake mikowski who runs TOMS shoes and a big that grew their business by giving away a pair of shoes for every street pair of shoes bought through indigent children and so I my kids and I were into the environment and I think in W what I what I saw was that hotels were meeting places in Asia in the u.s. we dumbed it down like we were in and out of a hotel as fast as you could I wanted to make the hotel a meeting place again in the US is always slow to do things in Europe they are way ahead in US and Canada too on the environment and I figured that we were gonna get there and it was time we did something so I want I decided I was gonna build a sustainable hotel brand a brand I could teach each of you could live well but still live green and if ever and and more sustainably and if everybody did it and we were copied I'd made the world a better place and if we made money doing it that would be great so we opened one South Beach I want Hotel South Beach which is was voted the seventh best hotel in the United States last year in November's Conde Nast Readers Choice Awards and then we opened the one Central Park and the one Brooklyn Hotel which is the first new build we're opening La Baba Sandia China Paris London now uh we have one here actually coming here good and Sunnyvale work against me Napa so the brand is taking off and we're running we're crushing all the flags which I just love because we're doing with social media and a no zero ad budget we have never taken an ad out and we're on the one South Beach we'll run nearly $2,000 a night next week 99% of all it's word of mouth people find stuff today they find it they find that you maybe many of you may have heard of auberge or montage montage had one hotel down and I guess Laguna Beach and yeah in that world to that customer people knew it what they found it and they don't have 3,000 people at corporate they don't have global sales teams we don't either but we compete and win against all the majors so for me I say it's not a brand it's a cause one hotels is a cause and it actually Orient's our employees and our guests really love the message we're sending so we try to use as much recycled stuff as we can half the stuff in Brooklyn with source locally how did your farm-to-table and I it's fun for me that's like a refuge that's like I have fun doing design working with great designers working with my design team it and for me I I'll and I think design matters you know I I I get I got criticized a lot in the days of running star hotels that I was picking bedspreads in and Walt paint and I wasn't picking them all the time but when you have a fleet of assets you're trying to create a brand that was my product so you know the best thing so when great people bring you the stuff much better than you could well and that's what I those are the that's the real fun I have on my team makes me look good we're well over time thank you very much for doing this very insightful I'm sure everybody really appreciated your comments let's have another huge round of applause

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Keywords: Real Estate Forums, The Real Estate Forums, Canadian Real Estate Forums, Commercial Real Estate, CRE, Canadian Commercial Real Estate, Real Estate Conference, Commercial Real Estate Conference, Real Estate

Id: KNJhV6uqf6g

Length: 41min 43sec (2503 seconds)

Published: Mon Dec 17 2018