Ranging from expanding capital partners to aspiring to create its own
brand, Mohari Hospitality will become increasingly active across multiple
luxury verticals.
NEW YORK CITY – Mohari Hospitality is not a big institutional
investor, but CEO J. Allen Smith said as it continues to develop more partnerships,
it is certainly creating institutional-like capital firepower.
As a result, the increasingly active luxury developer
founded in 2017 by Mark Scheinberg (co-founder of online poker company
PokerStars) is one of the companies to watch with Smith, CEO since January 2022,
exclusively telling Hotel Investment Today that the family office-backed
investment platform’s intention over time is to build out a very distinctive portfolio.
Today, assets under management for the New York City-based company is already
well into the billions of dollars and include luxury properties such as the
Four Seasons Madrid, 1 Hotel Toronto, a Baccarat in Florence, Italy, as well as
three resort and residences at Peninsula Papagayo in Costa Rica.
We have operating hotels and an extensive development portfolio, and we’ll continue to participate in that, both in Europe and North America.
J. Allen Smith
Mohari focuses on opportunities with deep value add and,
therefore, leads them to projects that involve ground-up development,
repositioning of existing hotels, or adaptive re-use of existing buildings. In
some instances, but not all, these properties are available because the
owner is experiencing some form of distress and needs to sell.
In fact, Smith said Mohari aspires to create its own more
contemporary luxury brand – something with more programming to meet evolving
expectations of the marketplace.
The company’s website shows 16 hotel assets open or under
development with Smith suggesting the total reaches between 20 and 25 when
considering other assets in various stages of development. Most recently,
Mohari acquired the venerable Hotel Bauer in Venice with hopes to make it the
luxury leader in the market.
“We’re fully committed to the luxury and lifestyle sectors,
and there a number of verticals where we are certainly active,” said Smith, who
ended a five-year run as president and CEO of Four Seasons Hotels and Resorts in
December 2018. “We have operating hotels and an extensive development
portfolio, and we’ll continue to participate in that, both in Europe and North
America.”
Development partnerships
Since its inception, Smith said Mohari has strategically evolved
from being a collection of assets to being a platform that is much more capable
of investing across different verticals to build scale and build an advantage to
access some of the types of assets that it is interested in.
Hôtel Saint-James & Albany is being converted to a 105-key luxury property
“We have formed a number of development partnerships with
groups who really bring extraordinary on-the-ground capability that allows us
to extend our reach beyond our direct team,” Smith explained. “The Bauer and
our project in Paris [Hôtel Saint-James & Albany] are good examples of that
where we’ve worked in concert with our partner, Omnam, who is very active in
the space. It has given us the capacity to access these sorts of opportunities.”
Over the course of certainly 2025, and beyond, Smith said
Mohari’s expectation is to more actively work with other sources of capital, in
part, to continue to support the growth of their platform and what they’re
trying to accomplish broadly.
In Paris, the Hôtel Saint-James & Albany is going to be
converted into a luxury hotel with about 105 keys. Smith said it has some great
heritage elements to it, including interior courtyard chateau that dates back
to the 1700s, that creates an opportunity to a distinctive environment and
storytelling capabilities. It closed in September with construction expected to
start this year.
Smith added that Mohari and Omnam have a lot going on in
Italy. Spain is a market they like a lot and Greece is a market they’re very
interested in. There are also selected cities like London where they’d like to
be, even though it’s a hard market to crash as well as expensive. They like
Amsterdam, as well, and Smith said they will continue to explore a variety of
these sorts of markets with Omnam, both urban and resort properties, as they
present themselves.
Mohari has parallel approach in the U.S., where it has a
couple similar development partnerships with groups that can, in effect, put them
in a position to develop a proprietary pipeline of deals.
San Francisco-based real estate and investment firm JMA
Ventures and Mohari in October 2023 entered into a strategic joint venture to
acquire, recapitalize, and develop up to $2 billion of luxury hospitality and
mixed-use projects throughout North America.
JMA and Mohari are currently working a high-end residential
development in conjunction with a ski mountain project in Lake Tahoe, Nevada,
called Homewood.
“Lake Tahoe is a very hard market to get into and we tend to
gravitate toward markets like that,” Smith said. “High barriers to entry often
mean these things take time.”
Mohari is partnering with Weller Development Partners on the Six Senses Grand Bahamas
Bethesda, Maryland-based Weller Development Partners and
Mohari announced a strategic partnership in May 2024 with plans to co-invest up
to $2.5 billion in luxury hospitality and mixed-use projects in North America
and the Caribbean. The investment will bolster Weller’s current investments,
including the Six Senses Napa in California and Six Senses Grand Bahama in the
Bahamas, which are in early stages of development, and provides a platform for
future investments.
Smith said Mohari like the opportunity to participate with
Six Senses as it tries to meaningfully penetrate the North American market.
“They have a really interesting brand and an interesting distinctive
positioning in the market that should resonate with people,” he said. “We see
it as an interesting opportunity to play a part in that expansion into North
America.”
Preferred adjacencies
In addition to hotel development, Mohari has 30% stake in
the Ritz-Carlton Yacht Collection along with heavyweight partners Oaktree, GIC
and Marriott International. “We’re very bullish on that sector and expect to
continue to build that out,” Smith added.
In the food and beverage adjacency, it acquired in 2023 Tao
Group Hospitality, a high-energy, entertainment-driven fine dining business, as
well as a stake in a smaller, Miami-based F&B operator called Riviera
Dining Group.
“What we like about these groups is their operating
platforms. They’re content creators, in the sense that, if you think about kind
of hospitality at this point, the things that differentiate some of the best
products is their capacity to create these experiences and an entertainment-driven
quality that we think that the marketplace really values,” Smith said.
Mohari’s partnership with JMA Ventures includes development
of a sports and entertainment district, including a hotel, surrounding the
arena for the NBA’s Orlando Magic.
There’s an interesting opportunity, over time, to aggregate a portfolio of these kinds of properties [Hotel Bauer] that arguably will be without peer in the marketplace. And that's certainly one of the things we’re working towards.
C. Allen Smith
“We like that space because as these sports franchises
escalate in value, the owners are also thinking of other ways that they can
monetize the value of those franchises,” Smith said. “Part of the way they do
that is in the real estate around the arenas.”
Smith also likes media-related opportunities that take of an
owned assets to create content and need the hotel’s operating capabilities for
things like food and beverage.
The White Lotus series is such an example that converged
with luxury hospitality at one of Mohari’s Four Seasons hotels. It is not an
overt branding opportunity, but Smith said everyone knows it’s a Four Seasons.
“We see a lot of natural alignment between hospitality and
the broader entertainment sector; there’s so much potential mutual benefit for productions
and the properties at which they film,” Smith said. “It’s certainly something
we’re open to exploring if the right opportunities arise.”
Plans for Hotel Bauer
Looking closer at the Hotel Bauer deal, Smith said a lot of
persistence and perseverance paid off to get the deal done. “At the end of the
day, like a lot of things, it reached a point where speed and certainty were
important for getting this done,” he added.
At the end of the day, Smith said Mohari digs in deep to a
lot of opportunities and does as much or more work than anyone else and
demonstrate its capacity to execute. Then, at the end of the day, he said being
able to offer speed and certainty when it matters is often a critical dimension
in these deals.
It remains early days on detailed plans for Hotel Bauer,
which will be managed by Rosewood Hotels & Resorts, with Smith saying it is
a heritage building with a stripped-out interior and an opportunity to create
what should be the best hotel in Venice.
“The Bauer will be a trophy. It’s not a trophy today and
it’s going to take a tremendous amount of work and value add to get it there,”
Smith said. “Once we do, we’ll be in a position to decide what to do with it.
But generally, we’re much more inclined, especially with those kinds of assets,
to be holders. And there’s an interesting opportunity, over time, to aggregate
a portfolio of these kinds of properties that arguably will be without peer in
the marketplace. And that's certainly one of the things we’re working towards.”
When asked about the outlook for luxury hotelkeeping Smith
said Mohari feels good about the state of affairs.
“Obviously, there are idiosyncrasies associated with
specific markets, but generally speaking, the outlook we see continues to be
favorable,” he said. “The same as all the strength we’ve seen recently – maybe
not quite but it certainly continues to be positive. There are no signs that I
see right now that there’s a meaningful correction in luxury travel that’s
about to hit us... We continue to feel quite bullish and like our positioning
in the space.”