August 3, 2026 • 17 mins
Ask Chad Sorensen what wins in 2026 and he will not say growth; he will say execution and margins. This episode of the Distinguished Podcast was recorded on the road at the 2026 NYU International Hospitality Investment Forum in New York City, with guest host Kaushik Vardharajan, Director of Boston University School of Hospitality’s Real Estate Program.
Chad is CEO of CHM Warnick, a leading hotel asset management and advisory firm, and vice chair of Boston University School of Hospitality’s Real Estate Advisory Council. Tune in to hear this insider’s perspective on:
- Using AI to find savings without compromising the guest experience
- The risks in changing brand and manager at the same time
- Advice for owners on making strategic capital investments
The “Distinguished” podcast is produced by Boston University School of Hospitality Administration.
Host: Arun Upneja, Dean
Producer: Mara Littman, Executive Director of Strategic Operations and Corporate Relations
Research and Content Creation: Lan Lu
Marketing: Anne Dawson
Editing: Isabella Laikin and James Leon
Music: “Airport Lounge" Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0
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SPEAKER_01 (00:06):
Ask Chad Sorensen what wins in 2026, and he will
not say growth.
He will say execution and hewill say margins.
This is the distinguishedpodcast from the Boston
University School of HospitalityAdministration.
Recorded on the road at the NYUInternational Hospitality
Investment Forum in New YorkCity.
(00:27):
With guest host KashikWardarajan, Director of a Real
Estate Program.
Chad is the CEO of CHM Warnik, aleading hotel asset management
and advisory firm, and vicechair of a real estate advisory
council.
He explains why the year aheadis won line by line on the PL,
how his team uses businessintelligence and AI to find
(00:51):
savings without touching theguest experience, what is behind
the wave of owners changingbrands and manager at the same
time, and how he counsels ownerson where to put their capital.
Let's get started.
SPEAKER_02 (01:06):
Alright, so this is the Boston University School of
Hospitality AdministrationDistinguished Podcast on the
road at the NYU IHIF conference.
And I'm here with our nextguest, Chad Sorensen, CEO of CHM
Warnik.
Chad, thank you for making thetime to join us.
SPEAKER_00 (01:22):
Great.
SPEAKER_02 (01:25):
I hope you're having a great conference.
SPEAKER_00 (01:28):
Absolutely.
You as well.
There's been uh a lot ofenthusiasm on this first first
morning, which is which isgreat.
SPEAKER_02 (01:35):
Yeah.
What are you seeing generally interms of sentiment?
SPEAKER_00 (01:39):
Uh I would say the sentiment is definitely more
positive than you know than wewere thinking, you know, way
back in January in Alice.
And I think that comes on theheels of a Q1 performance across
the industry that was generallybetter than than anticipated.
So I think after a couple yearsof uh uh of real challenges and
(02:03):
you know most everyone lookingforward looking into 2026 as a
year where RevPar growth wasgoing to be muted uh and
actually seeing that it's youknow at 3.5%, I think, through
Q1 is really encouraging.
We've got a lot of year to go.
Uh but I think that helps withthe way people are feeling
around here today.
SPEAKER_02 (02:23):
Yeah, I think that's great news for everyone across
industry.
Uh you know, you previouslystated that 2026 uh our success
in 2026 isn't about growth, it'sabout execution, it's about
margins.
So can you talk to us about howyou're going about it with your
owners?
SPEAKER_00 (02:43):
Yeah, should I start with uh how I was wrong?
Because I think that's the case,right?
As I as I mentioned, it's beenit's been a really good story so
far.
Uh our portfolio through Q1actually saw a double-digit
RevPAR increase.
You know, we do feel we'll losesome ground uh over the the next
three quarters, uh, but shouldabsolutely find uh find
(03:05):
ourselves with uh you knowrespectable RevPAR growth uh by
the time we get the end of theyear, at least that's now the
the plan, I hope.
That being said, with uhinflation uh being where it is
at, uh you know, that negatesthe real growth uh
unfortunately, uh, but we areseeing we are seeing growth.
So I think we're you know whatwe are seeing is uh under the
(03:29):
expense side, that has not takenour focus off, right?
Having good top line, especiallyon the room side, uh has not
taken away from the importanceof really focusing on the the
details of of the operation.
And we've been talking aboutlabor, labor wage rates, uh, et
cetera, for the last few years.
I'll say I believe itstabilized, I would call it last
(03:51):
year.
And as we work through 2026,it's been uh it's been
predictable, is the word I woulduse for that.
It's uh uh you know, labor isstill costing us more than we'd
like to pay, uh, but it doesseem more predictable in this
environment.
So we spend a lot of time onother areas in in the business,
right?
Hotels are a really complicateduh business, uh, but the
(04:14):
positives of that is that meansthere's a lot more levers you
can pull and buttons you can youcan push.
So uh while labor is the biggestexpense, you know, we're
spending a lot of time uh onitems below the line, whether
that's uh helping clients youknow refinance uh their
projects.
We're we know we're definitelyseeing more opportunity there.
(04:35):
Insurance costs uh havestabilized to a degree in many
markets, uh which has been whichhas been good to see.
Uh there's always work to do uhwhen it comes to taxes.
And then on the operating sideas well, I think AI is starting
to introduce some some reallyinteresting uh solutions.
Uh can't say that we're seeing alot of you know a lot of impact
(04:59):
at GOP yet, but I think we willwe will see that.
Uh you know, we continue to takethe P ⁇ Ls apart line by line
and really leaning into uhbusiness intelligence, which
we've we've been in that gamenow for for over 10 years, and
as we've layered AI in over thelast uh last probably 24 months,
uh we are finding ways to cutexpenses in ways that we really
(05:23):
didn't discover before, uh,which is exciting.
It's really it really isexciting to see how you know
data and and technology can helpuh help drive drive performance.
SPEAKER_02 (05:35):
Yeah, that's great.
So I think one of the challengesor concerns at least is that in
an attempt to protect margins,that we'll often it it seems
like some people are going theother extreme and compromising
on the guest experience,compromising on the basic
service model.
How do you stop yourself fromdoing that and how do you find
(05:57):
that balance?
SPEAKER_00 (05:58):
Listen, if you're not taking care of the customer
and you don't have a focusedplan as an operator on that, uh,
you know, it's going to be areally challenging year and you
know and and beyond.
Uh, you know, I don't think mostof us didn't see what was coming
out of COVID where our guestsatisfaction scores uh had
really plummeted.
(06:19):
And it didn't matter the brand,it didn't matter the location,
it didn't matter the thesegment.
Uh it was a big unintended uhkind of situation that we all
found ourselves in.
And so the the the goodoperators uh and the asset
management firms like ourselves,we are absolutely dialed into uh
the guest experience and youknow, cutting your way to the
(06:40):
bottom and trying to find waysto offset uh expenses if it's
gonna impact uh guestsatisfaction, I think is a very
short, short game, uh, and notthe way to the way to look at
this.
Uh we've got to stay focused andand really it's you know it's
kind of seen from all fromthrough all lenses, the brands
(07:01):
as well, right?
The brands uh generally speakinghave been working with owners to
deal with what is probably thebiggest issue out there, uh,
which is CapEx and PIP andmaintaining buildings to brand
standards.
Uh and the core metrics on thatis guest satisfaction.
If the guest is telling thebrand and the owner that they're
(07:21):
not happy with uh the experienceor they're not happy with the
quality of the product, uh thebrands just aren't going to you
know uh uh sit on the sidelineand not push the the owners and
the management companies.
And so it it's definitely a pushand a pull as we try to you know
recover some of the GOP that welost coming out of COVID.
Uh but it's a sh it's a shortgame if you're trying to do that
(07:43):
through expenses.
You you know you need to doubledown and continue to find other
ways to cut expenses.
Uh but saying laser focused onguest satisfaction, uh it's is
is really key to beingsuccessful long term, I think.
SPEAKER_02 (07:56):
Okay.
I'm glad to hear that.
Uh yeah.
So Hama last year in the fall uhyou know conducted their survey,
which I thoroughly enjoyreading.
And the survey shared thatroughly about 25% of asset
managers are seeking both anbrand and management changes at
the same time in their assets,right?
(08:18):
That seems quite aggressive thatyou're making dual changes at
the same time and thattwenty-five percent of them are
doing that.
Why do you think that'shappening now?
SPEAKER_00 (08:26):
That's uh an easy question with a really
complicated answer because thereare uh uh there are a number of
factors, I believe, that that gointo that.
Uh kind of when when we talkwith our clients uh on their
acquisition strategy or justoptimizing their you know their
investments, um almost everybodyis if you own the asset, you've
(08:49):
you've had to rewrite yourinvestment thesis.
And when you rewrite that, uhyou have to step back and take a
look at uh you know what doesthe operating business require
moving forward.
And and a lot of times you know,going through that exercise will
identify that you know maybe theproperty isn't branded correctly
or may not be the right type ofmanagement company.
(09:12):
There was you know just so muchchange in the world of
management companies, you know,post-COVID.
You know, the large brands, theMarriott's, the Hilton's, the
Hyattes, you know, as we allknow, they've expanded the
number of brands that they have,uh, but they've also generally
taken uh you know a step backfrom the type of assets that
they need to manage, right?
(09:33):
So they're still in themanagement business, but it's
the key assets more than ever.
And so what that's done is youknow created this kind of what I
call uh a frothiness in themarket for third-party
management companies.
And uh and the the third partymanagement companies, you know,
they were hit hard during COVID,so they've had to rebuild their
rebuild their companies as well.
(09:54):
And so uh there I think there'sjust been all of these different
dynamics that have changed.
The brands getting out ofmanagement means there's more
need for third-party managers,the third-party managers uh, you
know, again, they they didn'tsee coming like we haven't,
generally speaking, the shortagethat we were going to have on
the staffing front, and that'sboth at the line level and the
management level.
(10:15):
Uh and so you I think you'refinding owners that don't have
strong you know advisors, uh,i.e.
the the asset management, uhthey many times are ending up
with the wrong brand or thewrong management company uh for
the new investment thesis.
And so that has led to, and Ithink will continue to lead to
(10:37):
just you know churn in thespace.
You know, having the rightbrand, the right uh the right
manager can absolutely be thedifference of uh an investment
being a success or not.
And it's it's very expensive uhto pick the wrong operator uh
and then have to change themout, say in a year or two or
(10:57):
three years.
You've not only lost that periodof time, it's the disruption
that comes along with making achange.
So uh, you know, majority ofowners don't take uh you know
rebranding or uh you knowchanging up the management
company structure lightlybecause it's really disruptive,
and at the end of the day, thatcosts a lot of money as well.
So I think we'll continue to seethat though.
(11:19):
I mean the transaction market,you know, obviously is is is
heating up a little bit more,but they're gonna continue over
the next several years to be alot of deals where the the
investment thesis is isunderwriting it for an
acquisition uh just looksdifferent from a need
perspective, which is gonnadrive uh drive change.
(11:39):
Brand management, brand andmanagement.
Uh you have to look at all thosedifferent scenarios.
SPEAKER_02 (11:44):
Okay.
Yeah.
And Chad, in in addition to kindof pro being an asset manager
for specific assets, you're alsoa trusted advisor to a lot of
these owners, and you know,you're and oftentimes they come
to you asking you for yourthoughts on capital deployment,
if they have capital.
What are you telling them?
You know, how are you addressingkind of the buy, hold, sell kind
(12:05):
of analysis or discussion?
And what are you recommendingowners do if they have capital
today?
SPEAKER_00 (12:12):
Well, you know, it all begins with what's the
objectives, right?
I mean, that's one of the reallyinteresting uh and kind of
competitive advantages ofrunning a third-party asset
management advisory firm is wewe have a very diverse group of
clients that all have differentneeds.
Uh at the same time, we have alot of diverse assets and
(12:34):
management companies and brandswhere we've got this really wide
lens.
And so it starts with aconversation around, you know,
what is your investment thesis?
What is your hold period?
You know, what are you trying toaccomplish?
What are your goals?
Uh and surprisingly enough, youknow, you you've got a lot of
individuals or groups uh thatare maybe new to this space
(12:56):
where they can't clearlyarticulate that.
And so a lot of times we startat the kind of starting line
with them, take them throughthat process and understand uh
not only what they're lookingfor, but why are you looking for
it?
What's the what's the end of endobjective?
Uh and then we you know we arewith them as their advisor and
their expert throughout thethroughout the process, uh,
(13:19):
whether it's helping identifykey acquisition targets, uh, you
know, there's you know the Iwould say there's as many deals
getting done outside thebrokered world than there is in
the brokered world, and we'reseeing a lot of assets come
around the second, third time inthe bro the brokered world.
So you know part of it is beingpatient because there's so much
(13:40):
capital out there, but beingdialed in and what your strategy
is and having a and have aplatform in place to evaluate
those deals that maybe fit yourparameters.
So we spend a lot of time on theanalytics uh around the why uh
instead of just the you knowhelp us find an asset to buy.
Uh and we we find ourselves aseducators, honestly.
(14:03):
It's just you know, we becausewe you know, like you say, we
can touch a project all the wayfrom cradle to grave, right?
Somebody may come to us uh withan idea, a piece of land, a bag
of money, and we can take themfrom that and help them execute
on their on their vision, andthere's just a lot of
decision-making points uh uhalong that along that path.
SPEAKER_02 (14:28):
Okay.
So now Chad, my last questionfor you.
So if you woke up tomorrowmorning and you had a hundred
million dollars in your bank andyou had to invest that in the
hospitality space, what kind ofassets would you buy?
What markets would you go buyin?
SPEAKER_00 (14:46):
Boy, that's a tough uh that's a that's a tough
question.
It goes back to my answer on thelast one, right?
What's what's the what's thestrategy?
What's the investment thesis?
So what's yours?
Uh what is mine?
SPEAKER_02 (14:58):
Um This is your own personal hundred million
dollars.
SPEAKER_00 (15:01):
You know, I I again it it's it's uh while not uh not
not sexy in that solid selectservice space uh is always uh
you know less risky, I wouldsay.
But uh I I think from anacquisition standpoint or a full
in the let me get back up.
So I guess on the full servicespace, you know, it has to be an
acquisition uh becausedevelopment's just too expensive
(15:24):
uh uh anymore.
So uh I would say it's eithersolid, you know, solid uh
secondary markets where I knowthere's things that we can do
from the level of sophisticationthat our that our platform has
that we can easily kind ofoutsmart the the market.
Uh and I still think there'sopportunity in the in the
(15:45):
distress space, uh, but it'sit's it's not gonna it's not
gonna show up on your on yourfront door.
You've got to figure out uhwhat's behind the scenes to be
able to get into those types ofdeals, which I think we're you
know we're pretty good at andwe've had good success
post-COVID.
So I'd I'd probably take that uhthat money and again kind of
(16:06):
leverage uh my team's exposureand experience and and partners
uh in the marketplace.
Uh I do believe uh that all theprime air markets are going to
come back.
It's just a matter of time.
I mean you said we've got thePortlands and the Seattles and
the in the Minneapolis, but uhyou know, in some of those
(16:27):
markets, there's greatacquisition opportunities when
you're kind of buying by thepound versus by the by the by
the cap rate.
Um so I guess there's a the goback, it comes down to the
strategy, right?
And you know, I've got themoney, what is the you know,
what are you what are you tryingto accomplish?
I think there's there's multiplepaths uh you could you could go
(16:48):
down.
SPEAKER_02 (16:49):
Okay.
Well, that's all we have timefor.
Chad, thank you very much.
So this was uh Chad Surenson'sCEO at CHM Warning.
Great and vice chair of our realestate advisory council.
So Chad, thank you for joiningus.
SPEAKER_00 (17:02):
You're welcome.
SPEAKER_01 (17:02):
Thank you, Kashik.
That brings this episode to aclose.
Thanks for joining us on theroad at the NYU International
Hospitality Investment Forum,and our thanks to our guests for
sharing their time and insight.
The Distinguished Podcast isproduced by the Boston
University School of HospitalityAdministration.
If you enjoyed thisconversation, follow or
(17:23):
subscribe wherever you listenand share it with a colleague or
a student who would find itvaluable.
To learn more about our programsand the work coming out of the
school, visit pu.edu slashhospitality.
We will see you next time.
Ask Chad Sorensen what wins in 2026, and he will
not say growth.
He will say execution and hewill say margins.
This is the distinguishedpodcast from the Boston
University School of HospitalityAdministration.
Recorded on the road at the NYUInternational Hospitality
Investment Forum in New YorkCity.
(00:27):
With guest host KashikWardarajan, Director of a Real
Estate Program.
Chad is the CEO of CHM Warnik, aleading hotel asset management
and advisory firm, and vicechair of a real estate advisory
council.
He explains why the year aheadis won line by line on the PL,
how his team uses businessintelligence and AI to find
(00:51):
savings without touching theguest experience, what is behind
the wave of owners changingbrands and manager at the same
time, and how he counsels ownerson where to put their capital.
Let's get started.
SPEAKER_02 (01:06):
Alright, so this is the Boston University School of
Hospitality AdministrationDistinguished Podcast on the
road at the NYU IHIF conference.
And I'm here with our nextguest, Chad Sorensen, CEO of CHM
Warnik.
Chad, thank you for making thetime to join us.
SPEAKER_00 (01:22):
Great.
SPEAKER_02 (01:25):
I hope you're having a great conference.
SPEAKER_00 (01:28):
Absolutely.
You as well.
There's been uh a lot ofenthusiasm on this first first
morning, which is which isgreat.
SPEAKER_02 (01:35):
Yeah.
What are you seeing generally interms of sentiment?
SPEAKER_00 (01:39):
Uh I would say the sentiment is definitely more
positive than you know than wewere thinking, you know, way
back in January in Alice.
And I think that comes on theheels of a Q1 performance across
the industry that was generallybetter than than anticipated.
So I think after a couple yearsof uh uh of real challenges and
(02:03):
you know most everyone lookingforward looking into 2026 as a
year where RevPar growth wasgoing to be muted uh and
actually seeing that it's youknow at 3.5%, I think, through
Q1 is really encouraging.
We've got a lot of year to go.
Uh but I think that helps withthe way people are feeling
around here today.
SPEAKER_02 (02:23):
Yeah, I think that's great news for everyone across
industry.
Uh you know, you previouslystated that 2026 uh our success
in 2026 isn't about growth, it'sabout execution, it's about
margins.
So can you talk to us about howyou're going about it with your
owners?
SPEAKER_00 (02:43):
Yeah, should I start with uh how I was wrong?
Because I think that's the case,right?
As I as I mentioned, it's beenit's been a really good story so
far.
Uh our portfolio through Q1actually saw a double-digit
RevPAR increase.
You know, we do feel we'll losesome ground uh over the the next
three quarters, uh, but shouldabsolutely find uh find
(03:05):
ourselves with uh you knowrespectable RevPAR growth uh by
the time we get the end of theyear, at least that's now the
the plan, I hope.
That being said, with uhinflation uh being where it is
at, uh you know, that negatesthe real growth uh
unfortunately, uh, but we areseeing we are seeing growth.
So I think we're you know whatwe are seeing is uh under the
(03:29):
expense side, that has not takenour focus off, right?
Having good top line, especiallyon the room side, uh has not
taken away from the importanceof really focusing on the the
details of of the operation.
And we've been talking aboutlabor, labor wage rates, uh, et
cetera, for the last few years.
I'll say I believe itstabilized, I would call it last
(03:51):
year.
And as we work through 2026,it's been uh it's been
predictable, is the word I woulduse for that.
It's uh uh you know, labor isstill costing us more than we'd
like to pay, uh, but it doesseem more predictable in this
environment.
So we spend a lot of time onother areas in in the business,
right?
Hotels are a really complicateduh business, uh, but the
(04:14):
positives of that is that meansthere's a lot more levers you
can pull and buttons you can youcan push.
So uh while labor is the biggestexpense, you know, we're
spending a lot of time uh onitems below the line, whether
that's uh helping clients youknow refinance uh their
projects.
We're we know we're definitelyseeing more opportunity there.
(04:35):
Insurance costs uh havestabilized to a degree in many
markets, uh which has been whichhas been good to see.
Uh there's always work to do uhwhen it comes to taxes.
And then on the operating sideas well, I think AI is starting
to introduce some some reallyinteresting uh solutions.
Uh can't say that we're seeing alot of you know a lot of impact
(04:59):
at GOP yet, but I think we willwe will see that.
Uh you know, we continue to takethe P ⁇ Ls apart line by line
and really leaning into uhbusiness intelligence, which
we've we've been in that gamenow for for over 10 years, and
as we've layered AI in over thelast uh last probably 24 months,
uh we are finding ways to cutexpenses in ways that we really
(05:23):
didn't discover before, uh,which is exciting.
It's really it really isexciting to see how you know
data and and technology can helpuh help drive drive performance.
SPEAKER_02 (05:35):
Yeah, that's great.
So I think one of the challengesor concerns at least is that in
an attempt to protect margins,that we'll often it it seems
like some people are going theother extreme and compromising
on the guest experience,compromising on the basic
service model.
How do you stop yourself fromdoing that and how do you find
(05:57):
that balance?
SPEAKER_00 (05:58):
Listen, if you're not taking care of the customer
and you don't have a focusedplan as an operator on that, uh,
you know, it's going to be areally challenging year and you
know and and beyond.
Uh, you know, I don't think mostof us didn't see what was coming
out of COVID where our guestsatisfaction scores uh had
really plummeted.
(06:19):
And it didn't matter the brand,it didn't matter the location,
it didn't matter the thesegment.
Uh it was a big unintended uhkind of situation that we all
found ourselves in.
And so the the the goodoperators uh and the asset
management firms like ourselves,we are absolutely dialed into uh
the guest experience and youknow, cutting your way to the
(06:40):
bottom and trying to find waysto offset uh expenses if it's
gonna impact uh guestsatisfaction, I think is a very
short, short game, uh, and notthe way to the way to look at
this.
Uh we've got to stay focused andand really it's you know it's
kind of seen from all fromthrough all lenses, the brands
(07:01):
as well, right?
The brands uh generally speakinghave been working with owners to
deal with what is probably thebiggest issue out there, uh,
which is CapEx and PIP andmaintaining buildings to brand
standards.
Uh and the core metrics on thatis guest satisfaction.
If the guest is telling thebrand and the owner that they're
(07:21):
not happy with uh the experienceor they're not happy with the
quality of the product, uh thebrands just aren't going to you
know uh uh sit on the sidelineand not push the the owners and
the management companies.
And so it it's definitely a pushand a pull as we try to you know
recover some of the GOP that welost coming out of COVID.
Uh but it's a sh it's a shortgame if you're trying to do that
(07:43):
through expenses.
You you know you need to doubledown and continue to find other
ways to cut expenses.
Uh but saying laser focused onguest satisfaction, uh it's is
is really key to beingsuccessful long term, I think.
SPEAKER_02 (07:56):
Okay.
I'm glad to hear that.
Uh yeah.
So Hama last year in the fall uhyou know conducted their survey,
which I thoroughly enjoyreading.
And the survey shared thatroughly about 25% of asset
managers are seeking both anbrand and management changes at
the same time in their assets,right?
(08:18):
That seems quite aggressive thatyou're making dual changes at
the same time and thattwenty-five percent of them are
doing that.
Why do you think that'shappening now?
SPEAKER_00 (08:26):
That's uh an easy question with a really
complicated answer because thereare uh uh there are a number of
factors, I believe, that that gointo that.
Uh kind of when when we talkwith our clients uh on their
acquisition strategy or justoptimizing their you know their
investments, um almost everybodyis if you own the asset, you've
(08:49):
you've had to rewrite yourinvestment thesis.
And when you rewrite that, uhyou have to step back and take a
look at uh you know what doesthe operating business require
moving forward.
And and a lot of times you know,going through that exercise will
identify that you know maybe theproperty isn't branded correctly
or may not be the right type ofmanagement company.
(09:12):
There was you know just so muchchange in the world of
management companies, you know,post-COVID.
You know, the large brands, theMarriott's, the Hilton's, the
Hyattes, you know, as we allknow, they've expanded the
number of brands that they have,uh, but they've also generally
taken uh you know a step backfrom the type of assets that
they need to manage, right?
(09:33):
So they're still in themanagement business, but it's
the key assets more than ever.
And so what that's done is youknow created this kind of what I
call uh a frothiness in themarket for third-party
management companies.
And uh and the the third partymanagement companies, you know,
they were hit hard during COVID,so they've had to rebuild their
rebuild their companies as well.
(09:54):
And so uh there I think there'sjust been all of these different
dynamics that have changed.
The brands getting out ofmanagement means there's more
need for third-party managers,the third-party managers uh, you
know, again, they they didn'tsee coming like we haven't,
generally speaking, the shortagethat we were going to have on
the staffing front, and that'sboth at the line level and the
management level.
(10:15):
Uh and so you I think you'refinding owners that don't have
strong you know advisors, uh,i.e.
the the asset management, uhthey many times are ending up
with the wrong brand or thewrong management company uh for
the new investment thesis.
And so that has led to, and Ithink will continue to lead to
(10:37):
just you know churn in thespace.
You know, having the rightbrand, the right uh the right
manager can absolutely be thedifference of uh an investment
being a success or not.
And it's it's very expensive uhto pick the wrong operator uh
and then have to change themout, say in a year or two or
(10:57):
three years.
You've not only lost that periodof time, it's the disruption
that comes along with making achange.
So uh, you know, majority ofowners don't take uh you know
rebranding or uh you knowchanging up the management
company structure lightlybecause it's really disruptive,
and at the end of the day, thatcosts a lot of money as well.
So I think we'll continue to seethat though.
(11:19):
I mean the transaction market,you know, obviously is is is
heating up a little bit more,but they're gonna continue over
the next several years to be alot of deals where the the
investment thesis is isunderwriting it for an
acquisition uh just looksdifferent from a need
perspective, which is gonnadrive uh drive change.
(11:39):
Brand management, brand andmanagement.
Uh you have to look at all thosedifferent scenarios.
SPEAKER_02 (11:44):
Okay.
Yeah.
And Chad, in in addition to kindof pro being an asset manager
for specific assets, you're alsoa trusted advisor to a lot of
these owners, and you know,you're and oftentimes they come
to you asking you for yourthoughts on capital deployment,
if they have capital.
What are you telling them?
You know, how are you addressingkind of the buy, hold, sell kind
(12:05):
of analysis or discussion?
And what are you recommendingowners do if they have capital
today?
SPEAKER_00 (12:12):
Well, you know, it all begins with what's the
objectives, right?
I mean, that's one of the reallyinteresting uh and kind of
competitive advantages ofrunning a third-party asset
management advisory firm is wewe have a very diverse group of
clients that all have differentneeds.
Uh at the same time, we have alot of diverse assets and
(12:34):
management companies and brandswhere we've got this really wide
lens.
And so it starts with aconversation around, you know,
what is your investment thesis?
What is your hold period?
You know, what are you trying toaccomplish?
What are your goals?
Uh and surprisingly enough, youknow, you you've got a lot of
individuals or groups uh thatare maybe new to this space
(12:56):
where they can't clearlyarticulate that.
And so a lot of times we startat the kind of starting line
with them, take them throughthat process and understand uh
not only what they're lookingfor, but why are you looking for
it?
What's the what's the end of endobjective?
Uh and then we you know we arewith them as their advisor and
their expert throughout thethroughout the process, uh,
(13:19):
whether it's helping identifykey acquisition targets, uh, you
know, there's you know the Iwould say there's as many deals
getting done outside thebrokered world than there is in
the brokered world, and we'reseeing a lot of assets come
around the second, third time inthe bro the brokered world.
So you know part of it is beingpatient because there's so much
(13:40):
capital out there, but beingdialed in and what your strategy
is and having a and have aplatform in place to evaluate
those deals that maybe fit yourparameters.
So we spend a lot of time on theanalytics uh around the why uh
instead of just the you knowhelp us find an asset to buy.
Uh and we we find ourselves aseducators, honestly.
(14:03):
It's just you know, we becausewe you know, like you say, we
can touch a project all the wayfrom cradle to grave, right?
Somebody may come to us uh withan idea, a piece of land, a bag
of money, and we can take themfrom that and help them execute
on their on their vision, andthere's just a lot of
decision-making points uh uhalong that along that path.
SPEAKER_02 (14:28):
Okay.
So now Chad, my last questionfor you.
So if you woke up tomorrowmorning and you had a hundred
million dollars in your bank andyou had to invest that in the
hospitality space, what kind ofassets would you buy?
What markets would you go buyin?
SPEAKER_00 (14:46):
Boy, that's a tough uh that's a that's a tough
question.
It goes back to my answer on thelast one, right?
What's what's the what's thestrategy?
What's the investment thesis?
So what's yours?
Uh what is mine?
SPEAKER_02 (14:58):
Um This is your own personal hundred million
dollars.
SPEAKER_00 (15:01):
You know, I I again it it's it's uh while not uh not
not sexy in that solid selectservice space uh is always uh
you know less risky, I wouldsay.
But uh I I think from anacquisition standpoint or a full
in the let me get back up.
So I guess on the full servicespace, you know, it has to be an
acquisition uh becausedevelopment's just too expensive
(15:24):
uh uh anymore.
So uh I would say it's eithersolid, you know, solid uh
secondary markets where I knowthere's things that we can do
from the level of sophisticationthat our that our platform has
that we can easily kind ofoutsmart the the market.
Uh and I still think there'sopportunity in the in the
(15:45):
distress space, uh, but it'sit's it's not gonna it's not
gonna show up on your on yourfront door.
You've got to figure out uhwhat's behind the scenes to be
able to get into those types ofdeals, which I think we're you
know we're pretty good at andwe've had good success
post-COVID.
So I'd I'd probably take that uhthat money and again kind of
(16:06):
leverage uh my team's exposureand experience and and partners
uh in the marketplace.
Uh I do believe uh that all theprime air markets are going to
come back.
It's just a matter of time.
I mean you said we've got thePortlands and the Seattles and
the in the Minneapolis, but uhyou know, in some of those
(16:27):
markets, there's greatacquisition opportunities when
you're kind of buying by thepound versus by the by the by
the cap rate.
Um so I guess there's a the goback, it comes down to the
strategy, right?
And you know, I've got themoney, what is the you know,
what are you what are you tryingto accomplish?
I think there's there's multiplepaths uh you could you could go
(16:48):
down.
SPEAKER_02 (16:49):
Okay.
Well, that's all we have timefor.
Chad, thank you very much.
So this was uh Chad Surenson'sCEO at CHM Warning.
Great and vice chair of our realestate advisory council.
So Chad, thank you for joiningus.
SPEAKER_00 (17:02):
You're welcome.
SPEAKER_01 (17:02):
Thank you, Kashik.
That brings this episode to aclose.
Thanks for joining us on theroad at the NYU International
Hospitality Investment Forum,and our thanks to our guests for
sharing their time and insight.
The Distinguished Podcast isproduced by the Boston
University School of HospitalityAdministration.
If you enjoyed thisconversation, follow or
(17:23):
subscribe wherever you listenand share it with a colleague or
a student who would find itvaluable.
To learn more about our programsand the work coming out of the
school, visit pu.edu slashhospitality.
We will see you next time.
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