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Investment Considerations in Unprecedented Times

The first half of 2020 will go down as one of the most challenging times for American business. There has been much discussion as to the immediate impact of the Hospitality and Lodging Industry – which has been dire – but we now believe it is time to look to the future as to both challenges and opportunity.

We anticipate that targeted acquisition opportunities will be few until the fourth quarter of 2020. This is driven by seller “shock” and the lending community in a virtual lock-down mode. In short, the market is unable to determine value until business and personal travel begins again. And based upon current predictions, some normalized level of travel should begin mid-summer and expand through the balance of the year.

Current market conditions now require patience and common sense. The management team at National Lodging & Leisure (NLL) has lived through market dislocations before and believes that we are now heading into what could be one of the most opportunistic acquisition periods in recent history. We believe that the greatest “value creation” in real estate investing happens not when you sell an asset, but in when you buy it. Current market conditions will separate marginal operators from their properties, giving NLL the opportunity to buy “right” and then implement our best practices that have allowed us to successfully run great hotel assets.

To be prepared for these opportunities, NLL has implemented a three-point plan to prepare for unprecedented opportunities:

  1. Market Analysis – We are actively updating our proprietary data bases to forecast which of our targeted Florida markets will rebound first and what unique characteristics “post-pandemic” we expect to occur. This knowledge, plus our decades of experience in Florida, will give us the ability to recognize opportunity and react quickly.

  1. Deal Sourcing – NLL’s acquisition team is in regular contact with potential sellers and brokers to understand the “drivers” of this unprecedented market. Again, the experience of NLL’s executive team and their deep industry contact base will be a major determinate in the successful acquisition of assets.

  1. Capital Raising – The ability to act quickly is important in normal times, but in today’s environment it may be the most important skill. Accordingly, we are very aggressively building our capital “war chest” to be able to move quickly when a desired opportunity is found.

In summary, these are unprecedented times requiring patience, experience, and capital. We believe that a generational investment opportunity is happening, and we invite you to join with us in that opportunity.

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