Evens Charles tackles growth with disciplined plan

WASHINGTON, D.C. — From his days as a walk-on football player turned scholarship recipient at Temple University to his current capacity as Founder and managing principal of Frontier Development & Hospitality Group, Evens Charles knows the road to success is built with discipline.

After becoming the first person in his family tree to graduate from college (he has two degrees) and placing a focus on leaving on legacy, he founded Frontier in 1998 and expanded into hotel investment in 2009.

By being opportunistic life and in business and utilizing his favorite board game as part of his strategy, Charles is committed to delivering superior returns for its investors through strategic asset selection, operational excellence, and innovative design.

“(By) going through trial and error and starting small, I eventually literally just played Monopoly in real life. I started off just flipping small $30 (thousand) $40 (thousand), $50,000 homes, and then I traded in my four homes for a hotel at some point,” he told Hotel Investment Today. “It’s always been my favorite game, and I think I played it in real life.”

Watch, read and learn what Charles said about his motivations for success, what he looks for in hotel deals and how the capital landscape is shaping up for 2025.

Full interview transcript

Jeff Higley: Hi, I’m Jeff Higley with Hotel Investment Today, and welcome to the latest edition of On the Money. I’m delighted to have as our guest today Evens Charles, founder and managing principal of Washington, DC-based Frontier Development & Hospitality Group.

Frontier was founded in 2009. It’s a real estate development and acquisition firm that has a diverse portfolio of hospitality and multifamily investments in urban and secondary markets across seven states. It has approximately $1.1 billion of urban infill mixed use development in its pipeline.

We’re excited to have Evens here today; we’re going to jump right into “On the Money.” First of all, welcome, Evens, it’s a pleasure to have you here today.

Evens Charles: Thank you so much. It’s a pleasure to be here.

Higley: First of all, one of the points of “On the Money” is talking about life lessons, and the first thing I’d like to address with you is that you were a college football player. You were a walk-on-turned-scholarship-recipient while you were at Temple, and you earned a BA in psychology and a Master of Education while at the school. How did all that help shape you as you embarked on the road to hotel investment?

Charles: Wow! Well, that was that was really the foundation that instilled confidence … I mean being a walk-on is not fun when you’re not treated like the scholarship guys, and you have to prove yourself. I had to go through that process, and once I was able to establish my position with the football team and beat out the star and obtain a scholarship, I decided to even take advantage of the education opportunity, now that it was being paid for, because I knew what it was like to pay for my education, and within that 5 years of playing football I was able to get my both of my degrees. What it instilled in me was the confidence that I can be an underdog, I can be a person who just can achieve. Just having those early successes and starting to establish a track record of knowing what it takes to succeed, I think, was the initial foundation that kind of set me up for success.

Higley: That had to have been a pretty cool day that day that you got that scholarship. That had to have been a milestone for you.

Charles: I’ve probably… yeah. I think I’m a man’s man and don’t get me wrong, there’s been times where I cried at funerals, but that was a time where I cried with joy. That was a momentous moment in my life, for sure.

Higley: You left Temple… You began investing in real estate when you were 25 (years old). About 10 years later you had your first hotel investment, so based on the path that you follow there. What advice would you give to those looking at hotel investing as a career.

Charles: Education, education, education, and as you teach yourself and get educated, something you can’t teach is discipline. Discipline is a key thing that I think that’s important for any level of success, anything that you do.

From a standpoint of discipline, it’s about establishing habits. A great book that I would recommend is James Clear’s “Atomic Habits.” That’s a great book on instilling just good habits. With those core principles being in place … It also took a having an appetite for risk and having confidence and believing in yourself.

Through that process and going through trial and error and starting small, I eventually literally just played Monopoly in real life. I started off just flipping small $30 (thousand) $40 (thousand), $50,000 homes, and then I traded in my four homes for a hotel at some point. It’s always been my favorite game, and I think I played it in real life.

Higley: That’s awesome. I’ve got some notes about what’s going on with you and Frontier right now … in August you and your JV partner Basis Investment Group bought the 182-room Cambria in in Washington, DC, Downtown and converted it to a Hyatt. You’re now in the process of renovating that. You’re also involved in projects that are worth hundreds of millions of dollars—one in Philadelphia, the Ben Franklin Parkway mixed-use development, and one in DC, the $564-million East mixed-use development. Both of these have hotels (and) residential components. How are those projects progressing, and how about a unique insight about each of those projects.

Charles: First of all, Covid happened. We were solely focused on hotels, and having hotels during Covid wasn’t pretty. We had to re-evaluate ourselves and said, ‘Well, what are we going to do going forward?’ That was a time that we really wanted to diversify.

There was a moment, even post-George Floyd, where there (were) some opportunities that were coming about in some cases minority developers, and I thought that this would be a great opportunity to diversify ourselves. We took advantage of a couple of public/private opportunities, one in Philadelphia, one in DC, and we pursued those opportunities. We partnered with some good partners that had the balance sheet and the prerequisite experience to capitalize these large deals. We were very fortunate. I mean, I think one of these deals could be a once in a lifetime opportunity, so it was super fortunate to win two (deals) that equate to that large number that you quoted earlier from a pipeline perspective.

But these deals are not easy, and they’re very complex. When you had cost of construction, and you had interest rates increase significantly from 2020 to 2021 it even created more complexity. And some of these municipalities just not having the budget. It’s just taken us being very creative to figure out how can we capitalize the deals today. But they’ve been mainly just in in planning stages and design and pre-development stages and also constantly trying to figure out how we get it capitalized in it in today’s environment.

It’s putting on some gray hairs, but it’s going to be worth it when they’re all over said and done with. These are going to be some generation changing deals when they’re all over said and done with. We’re excited about.

Higley: In terms of getting through that process going through there … what motivates you today as a hotel investor and trying to get projects like that moving?

Charles: I’ve always been motivated by the process. I like overcoming complex opportunities. The process, even more than the reward of when you sell a property and you turn a profit, has always been something that that really excites me. But in addition to the process is the impact that that we make on communities—the jobs that we create, the relationships that we build.

The most important thing to me today, being a new father of a 2-and-a-half-year-old, is legacy. Everything I do is about her, and being a person who comes from humble beginnings—the first person in my family tree to graduate from college and do what I’m doing—I’m thinking, how can I be a generation changer and set my daughter up for generations to come. So legacy is a key driver in my motivation today.

Higley: Looking ahead for the next year or so … we just saw the interest rate cut from the Fed … what are your expectations for transactions and development—new-build, development activity as we shift from ‘24 to ’25?

Charles: Well, obviously, some people were anticipating a 25 basis points, so we’re very excited that it was 50 (basis points), and we’re hearing it could be another 50 by the end of the year. It’s definitely trending in the right direction. But transactions have been very, very, very slow over the last 12 months or so—hardly any development. It’s very hard to make development deals pencil today. The opportunity is going to be where can you find an opportunity to obtain deals at a certain basis that can absorb today’s cost of capital. Acquisitions are going to be more so the play than development in today’s economic environment.

We are just big believers in just having a strong reservation system, being in markets where there’s multiple demand generators. Hotels (are) a 24-hour operating business, and it’s risky enough, so our mentality is how can we derisk every deal that we do as best as possible? We like simplicity. We like strong reservation systems, multiple demand generators, good markets and good basis.

Higley: It sounds like you think that the activity is going to pick up as ’25 unfolds?

Charles: I do absolutely, absolutely… It’s been capital just sitting on the sideline waiting to jump in. But as the economic metrics continue to improve, it instills more confidence in the capital markets and capital becomes more fluidly available, then I think that access to capital is going to allow more and more transactions to take place for sure. I expect ‘25 to definitely be a stronger transactional year than ‘24.

Higley: From a cost of capital impact on Frontier’s growth strategy, do you see accelerating the growth strategy, the growth pace for you guys … are you looking for anything in particular?

Charles: Everyone says it’s tough to find deals today. Right? Everyone’s in that same boat. How can we differentiate ourselves? I don’t think it’s going to be robust as relates to for Frontier. We just have to continue to tap into relationships, see where we can find those diamonds in the rough where people are not looking. We like to consider ourselves as contrarians. Maybe there are opportunities where people are running away from certain markets … we want to maybe run to those particular opportunities and see where we can find an opportunity to invest.

I don’t expect it to be robust because we don’t want to do bad deals, but we just want to be careful and try to just find the right deals. And it takes time, and it takes looking at a lot of deals to find the right ones.

Higley: When you’re looking at all those deals and looking at it from a big picture in the hotel industry, what do you think the biggest hotel investment opportunity is out there and on the other side of the coin, what gives you the biggest pause?

Charles: As I said earlier, I really like more of a simplistic operational model. So, select service—I really, really like the extended-stay sector to be specific. I’ve seen some tremendous growth in some of these extended state brands with some of the top franchisors. That’s sort of been a focus for us. From a market perspective like I mentioned, we just want to make sure that we’re just in certain markets that just have multiple demand generators.

What gives us pause is the big, large 300-, 400-key hotels—big full-service operations with a significant amount of complexity. Those type of deals are ones that we stay away.

We like development, but it just it just really has to be in a killer location, and it has to have it has to be able to generate a certain amount of RevPAR to support today’s construction costs and the cost of capital.

Higley: Evens, we could talk for another hour, but our time is up today. Thank you for joining us. We appreciate you being here on “On the Money,” and wish you continued good health, success, and happiness, and a great future for that young daughter that you have.

Charles: Thank you so much.