Leon, Mayer Lands Big Hotels Fish

Davis: “If we acquire two to five assets this year that probably would make us happy.”

DENVER—Hospitality investment banking veteran Geoff Davis has departed HREC Investment Advisors here, GlobeSt.com has learned EXCLUSIVELY , to join Leon, Mayer & Co ‘s hospitality real estate practice as partner and CIO, effective March 1st. He is charged with growing the private equity firm’s hospitality platform and is opening an office of the Miami-based firm here. A 33-year industry veteran, Davis leaves HREC—of which he was co-founder, president and senior principal—after a 14-year stint. While at the firm, Davis oversaw and executed on over 700 hotel transactions with a market cap in excess of $10 billion dollars. Already the owners of the storied El San Juan Resort & Casino in San Juan, Puerto Rico, which was purchased from the Blackstone Group last year, Leon, Mayer will focus on a few different types of properties, executives of the firm and Davis tell GlobeSt.com. “We like resorts that have good brand recognition in their markets,” declares Benjamin Mayer , managing partner. “Our strategy will include properties with a stand alone brand like the El San Juan but opportunistically, we’ll pursue hotels where there’s a value added strategy under big brands and in markets we like.” In particular, continues managing partner Andro Nodarse-Leon, “An area of focus is the soft brands within the larger brand, such as Hilton’s  Curio, Starwood’s Luxury Collection and Marriott’s Autograph line. Those are very interesting to us. Adds Davis, “We like resorts because we have a core competency there. The El San Juan’s total capitalization was in excess of $100 million and not everyone can do that, there’s less competition in that space. We also like urban boutique hotels, there’s going to be an overbuilt situation in several markets and there will be opportunities with soft branded hotels and then general opportunities.” Using Leon, Mayer’s current holdings as an example, he continues, “The El San Juan needed a heavy renovation, a change in management and there was a change in flag. When you can do all three of those things, which is what the underwriting called for, there’s significant upside.” Looking at the rest of the year, Davis states, “Our goal is to be opportunistic and a bit selective. If we acquire two to five assets this year that probably would make us happy.” He also revealed some of his strategy. “It’s a good time in the cycle to be looking because a lot of the REITs are to the sidelines and values are coming down. If you’re selective and in at the right basis, there are some opportunities. But two to four years out, we expect some maturity defaults and a possible overbuild situation so we will keep some dry powder for deals down the road.” Before creating HREC, Davis was a partner and president of Hospitality Investment Counselors and earlier served as a principal in Gemstone Hospitality. Offers to jump from investment banking into private equity have arisen before, he admits, but this one had special appeal. “I like the experience of the Leon, Mayer partners in building successful companies and the access to various sources of capital so we can pair the right capital partner with the right opportunity. I also like the fact we have a strong hotel operations veteran in partner John Tolbert . That is critical in reviewing opportunities and determining a business plan to maximize value on hotel investments.”