If special situations often require an A-Team, CBE Capital is building a name for itself as the white knight of hospitality finance.
The real assets investment firm, which co-invests its own capital in almost every deal it undertakes, specialises in unlocking complex hotel projects, mostly in Greece and Italy. In its latest transaction, on the island of Crete, CBE is buying up a stalled development as part of a bank-driven soft restructuring process to realise an ultra-luxury five-star hotel, resort and marina that will include branded residences.
“We think that Crete will be the next big thing in Greece,” says CBE managing partner, Geza Toth-Feher. “The island was historically a three-to-four-star location, but we see it successfully competing with overcrowded locations like Mykonos in the coming years.” He notes that Crete will have a new airport by 2028, which will offer direct flights to the US and the Middle East.
The project in question was originally earmarked for development by Dolphin Capital Investors, the failed residential and resort developer focused on the Mediterranean which is currently reaching a “decisive phase” of its wind-down strategy, according to the firm. The hospitality asset was in turn controlled by the indebted Iktinos, a marble mining and trading company listed on the Athens Stock Exchange. According to Toth-Feher, an appetite for patience, experience of dealing with Greek banks, capital markets expertise and an eye for long-term trends all served CBE in taking over the project. “One of the most difficult aspects of hospitality development in Greece is obtaining permits, and this project is already fully permitted,” he explains. “We had seven excellent brands pitching to operate the property for us but chose the US-headquartered Auberge Collection, which presented us with the most convincing concept.”
Part of The Friedkin Group, Auberge already has half a dozen destinations in Europe – including the soon-to-be open Cambridge House in London, owned by the Reuben Brothers – and Toth-Feher hopes to work with them again in Italy, where Friedkin controls Serie A club AS Roma.
Italian designs
A dual resident of Rome and London, German national Toth-Feher has an intimate knowledge of the Italian capital, where he personally negotiated the real estate deal for the newly launched The Corinthia Rome, on behalf of the Reuben Brothers. This neoclassical landmark in Piazza del Parlamento, the city’s administrative heart, is a tastefully-restored former Bank of Italy palazzo with 60 keys, and includes panoramic penthouses and a subterranean spa. It opened to significant acclaim in March, marking the first Corinthia-flagged property in Italy (Corinthia Lake Como will follow in 2028).
“The Corinthia Rome was our first project in Italy - we started work on it eight years ago,” he remembers. “At the time, we were working across the table from Richard Stone, then co-head of real estate at the Reuben Brothers.” Stone has since joined CBE as a partner, a step which Toth-Feher sees as underlining CBE’s ambitions, just like the arrival of another partner, Sebastian Loeffler. “As a real estate investment firm, we are exploring more and more asset classes across our deals to underpin the finances,” he adds.
CBE also worked on behalf of the Reuben Brothers in Capri, engineering a joint venture between RB Capital and German operating firm Oetker Collection to relaunch the island’s oldest hotel, formerly known as Locanda Pagano. The Reuben Brothers picked up the 1822-hotel in liquidation during the pandemic, before partnering with Oetker for its grand reopening as La Palma in 2023. “I was just in Capri last week for the launch of the hotel’s Casa Tua restaurant, which brings the Miami-based restaurant brand to the island. The hotel is really quite something,” he notes. “It is common in southern Europe to come across standing properties with great potential exuding faded grandeur – giving them a refresh also helps revitalise the local community, which is very satisfying,” he adds. “We would love to do something else in Capri.”
Complex engineering
While Toth-Feher admits that patience is a skill he has had to learn, CBE Capital has displayed this quality in spades across a range of projects. A case in point is Six Senses Porto Heli, another ambitious development in Greece which CBE is backing alongside the Greek Goutos family, New York-based fund Taconic Capital and London-based Cedar Capital Partners. The project has expanded from what was originally a €150 million scheme to a €180 million investment, with the addition of further luxury villas and accommodation for staff, the latter of which has become “an essential factor for attracting talent”, he notes. Located in two private bays in the municipality of Ermioni, close to the islands of Spetses and Hydra, the hotel includes around 60 rooms and suites, plus 12 branded residential villas for sale, ranging from five to eight bedrooms.
CBE likes branded residences, says Toth-Feher, partly for their ability to augment the returns on development. But he underlines: “Including branded residential is not just about improving a development’s cash flow – it is also about derisking the investment in a reasonable period of time. They allow you to partially exit the investment, or, depending on sales, stagger the investment.” On a preference for high end hospitality, he adds: “Luxury is a long-term value driver – it is very resilient. People who have this type of demand for luxury are less bothered by global events or macroeconomics.” In comparison, he notes, “the bottom of the market can also do very well – it is the middle that gets hit from all sides”. The sales process for Porto Heli’s branded residences is already going well, he notes, while the hotel construction is “proceeding on time for launch in 2028”.
The development in Porto Heli has also “become a magnet for other developers”, he notes, with the Six Senses signing inspiring other brands to commit to the area. “While we came here five years ago, in the meantime we have seen the arrival of Paul Coulson’s Four Seasons project, the Abu-Dhabi backed Waldorf Astoria Scarlet Bay and a number of ongoing bids for land.” He suggests that the area will be “completely transformed” in the coming years, comparing its future to prime locations such as San Tropez and Marbella.
While all these projects progress, CBE will be busy with other ventures, he says. “We are talking to Six Senses about a pipeline project in the Alps, at Kitzbühel, which has stalled due to inefficiencies in the capital stack. We are evaluating taking over the asset.”
CBE is also looking at a series of lifestyle projects linked to sporting events, including the “occasion of the Americas Cup coming to the Bay of Naples” and a couple of other infrastructure tenders in Italy. “We want to be known as problem solvers,” he underlines. “We have the expertise and the contacts.” He notes that CBE was “the first to bring Greek banks to other countries” to underwrite major hospitality projects and says he is about to pull off another coup in Rome in CBE’s signature “who dares, wins” style. It is easy to believe they will succeed.