Meyer Jabara bets on Canadian import to lead development

DANBURY, Connecticut — “Bigger, better, faster, stronger.” Stick those descriptors on Meyer Jabara Hotels in 12 to 18 months, according to the company’s newly minted Chief Investment Officer Ian McAuley, who’s determined to help lead the owner/operator into a future filled with expansion, deep-pocketed investors and kindred partners.

The industry veteran and Canadian native stepped into the pioneer role for the privately held company on February 20 after more than a year of searching by MJH for the right executive fit.

“We’ve always grown organically through our reputation and our partners,” said Justin Jabara, president of the 47-year-old, multi-generational firm. “Our feeling now is in order to compete another 47 years we need to rethink how our development, our department and the resources toward that department are structured.”

While that thought process is currently a work in progress as the CIO settles in to MJH’s West Palm Beach, Florida office, McAuley asserted “the goal is simple” in wanting the company to flourish for decades to come. He stressed, however, “To accomplish that we must approach growth with a more institutional strategy, while enhancing capabilities and increasing bandwidth.”

Justin Jabara

Toward this, MJH on March 1 was set to also add a vice president of development to the company roster, according to Jabara. Further staff expansion of the department is expected but will be “a function of deal flow as to how many will be added,” he said.

Jabara noted although the “development function will expand greatly” it will not become a separate entity within the firm.

Still, he added, the moves are at “a level that has not been seen in our organization, and that’s a testament to Bill [Chairman William Meyer] and Richard [CEO Richard Jabara], who not only believe in the future but are putting their dollars on the line to invest in the future.”

Deals in the works

McAuley expects his past to parlay nicely into that future. Most recently president and CEO of VM Hotel Acquisition Corp., a Canada-based SPAC (special purpose acquisition company) that he co-founded and led to an IPO on the Toronto Stock Exchange, the CIO has spent some three decades in executive positions across a variety of hospitality entities. These include serving as the Canadian president of Aimbridge Hospitality; president/COO of development, investment and franchising for Superior Lodging Corp.; and president of hospitality REIT American Hotel Income Properties, a Vancouver-based limited partnership that invests in hotel real estate properties across the United States.

“It’s exciting to leverage my unique hospitality/capital markets experience with the track record and operating history of MJH,” said McAuley, noting meshing the two was part of the position’s appeal. “I have grown a lot of companies over the years and it’s exciting to join MJH at this stage of its life cycle with the fresh energy, with Justin at the helm, and with a goal to grow the company as a hotel investment/management company.”

Meyer Jabara has been national before. Opportunities will arise across the U.S. and we will go where the opportunities are. We are currently working on or have deals represented across the U.S.

Ian McAuley

Share this quote

Working from a current base of 32 boutique, upscale select-service and full-service hotels—two-thirds owned, one-third third-party managed—that are concentrated in the eastern portion of the U.S., both Jabara and McAuley are in sync that the opportunity landscape is wide open for expansion.

“We will acquire single hotels, multi-unit portfolios and operating platforms,” said the CIO, indicating heading westward could be a distinct possibility.

“Meyer Jabara has been national before,” McAuley said. “Opportunities will arise across the U.S. and we will go where the opportunities are. We are currently working on or have deals represented across the U.S.”

Neither McAuley nor Jabara went into details on those deals.

“We expect Meyer Jabara’s development pipeline, as well as its portfolio, to grow because of this new strategy and investment. It will be a bigger company with best-in-class assets,” the new CIO said.

Not growth for growth sake

As the company transitions to this expanded model, it’s still keeping its eye on doing deals with existing partners. For example, MJH most recently purchased the Residence Inn Amelia Island—a property it was managing—for $26 million; the seller was not disclosed. The company is now investing $4 million into a propertywide renovation of the 133-key hotel in Fernandina Beach, Florida.

“Lots of things have changed in 47 years but [several] things haven’t: Great partners are a key to success and alignment is key,” Jabara said. “Our partners are the bedrock of the company and we have grown together over the years. [Another] item is deal quality… We won’t compromise on deal quality.”

Jabara intends to remain “intimately involved” in MJH’s development and growth strategy. “Growth is everyone’s responsibility,” he added.

MJH recently acquired the Residence Inn Amelia Island

Whether the new investment structure would target specific assets and locations for acquisition/development that would be top-of-mind attractive to equity partners, McAuley said at this juncture the goal is to “bring MJH to the next level of investment with institutional partners in whatever structure works best for the partners.”

In terms of bringing on equity investors for deals, McAuley was asked if MJH would look to maintain a majority position in all transactions. “Owning a majority of an asset is not a priority as much as ensuring that the hotel is managed professionally,” he said. “With larger deals, we will be partnering with institutional capital partners that have a need to deploy significant amounts of capital with professional management teams.”

He stressed the company is not placing debt. “We are active investment managers, not passive lenders.”

Despite the Fed still not dropping any basis points as anticipated, McAuley was sanguine about the continuing impact of elevated interest rates. “Within MJH’s history, the current level of interest rates is nowhere near the peak of what the company has dealt with in the past,” he said, suggesting distressed properties could be part of the opportunity mix. “There may be great assets but with bad balance sheets, [and] needing a new owner and fresh management.”

Just like finding the right CIO, finding the right opportunities for this departmental iteration may take time.

“MJH doesn’t need to do a deal for the sake of doing a deal,” McAuley said. “We have the luxury of taking our time, sourcing quality deals and quality partners. There are management companies that have more focus on generating development fees than on generating profit from preserving operating margins. MJH knows how to operate and generate profit.”

Jabara added that in the next 12-18 months they will continue to expand by honing the capabilities of the development team. “This includes growing our development pipeline and capital partners,” he said. “The company is just so well positioned for this.”