Cedar Capital Partners is expanding its footprint in the Mediterranean and beyond, capitalizing on the post-Covid tourism boom and targeting key European and US markets.
Speaking exclusively with Hospitality Investor, Ramsey Mankarious, founder & CEO of Cedar Capital Partners revealed that the Mediterranean region, in particular, has captured Cedar Capital’s interest following a surge in institutional investment post-Covid.
“We really like the Mediterranean - we already have three hotels there and are looking for more. The Mediterranean, especially post-Covid, has really boomed. It was always a huge destination for tourists but since Covid, it has become much more institutionally liked. A lot of big investors who historically would not have wanted to be in resorts, after Covid, are seeing the benefits,” Mankarious said.
One destination with significant promise is Croatia. “We like Croatia. It’s less well known than some others from an investment perspective and we’re definitely keeping an eye on it,” Mankarious says.
But Cedar Capital’s expansion plans are not limited to the Mediterranean. The company is set to open new properties across Europe and the US. “We're opening our Hoxton hotel in Edinburgh at the end of the year, as well as our Hoxton hotel in Florence. We also have a big $90 million renovation of our hotel in Miami which will be ready next year. We're quite busy with a lot of properties that are coming online quite soon,” he added.
When it comes to investment, Cedar Capital has a preference for refurbishment projects as ground-up development remains challenging. “We prefer to buy an existing hotel that we can renovate. Second to that would be to buy an office building to convert to a hotel. Converting an office building is quite tough but it’s hard to find land in the locations we want, which are the best locations in Europe. If you're doing a hotel development in Paris or Rome or London, there's no piece of land in the centre of town to build so it has to be a refurb.”
He adds: “In places like Greece where it’s somewhat easier to get a piece of land, it’s still very challenging; planning approval takes a long time, construction costs have really gone up significantly in the last three to four years, there’s a shortage of labour – a lot of things make development today much more challenging than in previous years so in the grand scheme of things development is the least preferable for us unless it’s a really special site or a great deal as opposed to an ‘okay’ deal.
For us, it has to be really unique, like the Six Senses in Porto Heli, to make it worthwhile.”
The €150 million Six Senses resort and branded residences scheme in Porto Heli, Greece is being financed by equity investors including the Greek Goutos family, New York-based fund Taconic Capital, London-based Cedar Capital Partners and CBE Capital.
Environmental, Social, and Governance (ESG) factors are increasingly shaping Cedar Capital’s decisions. “ESG has become a huge part of what we do in a way it wasn't 10 years ago. Today whether we're building something new or converting a building or renovating a hotel, ESG is number one in mind. The social and the governance aspects have always gotten attention but the environmental aspect is one that has become much more important in the decision-making process. And it’s only going to become more and more important going forward.”
Looking ahead, Cedar Capital is keen on both established and emerging markets. “The majority of deals we’re working on are luxury properties and the rest are lifestyle hotels around the €100 to €150 million mark. That has been our focus and where we see the most opportunities, Mankarious says.
He predicts a busy year ahead for the industry. “I think it'll be a very big year for a lot of people. Everyone has been waiting for the distress to happen and I think that's happening now. I think there’ll be a lot more activity in the second half of the year than we’ve had in a long time. We’re seeing some distress and we're investing in opportunities that we haven’t seen for a long time.”