Hotel industry veterans Schiffman, Lasky to invest in distressed assets

NEW YORK CITY Two experienced hotel and real estate professionals, Marty Schiffman and Morris Lasky are partnering with two high-net-worth families to create The Lodging Opportunities Group to acquire and operate hotels.

The New York City-based LOG will focus on opportunistically acquiring troubled, institutional-grade hotels located in urban and suburban U.S. markets, in segments ranging from luxury to economy. All LOG hotels will be managed by a sister company of Chicago-based Lodging Unlimited Inc., a third-party hotel management company for which Lasky serves as CEO.

Schiffman will lead the company as president. A real estate industry leader for more than 30 years, Schiffman has participated as managing principal and in senior management roles in more than US$1 billion worth of transactions in all asset classes for such investment management companies as Sonnenblick-Goldman, Lehman Brothers and Carl Marks & Co.

“There are a growing number of funds entering the hotel industry,” Schiffman says. “We believe we are different from many of those players because they include a high percentage of financial buyers, and we have a hands-on, intensive management approach to creating solutions. We will differentiate ourselves from other investors by seeking out highly-challenged, deep turnaround assets that can benefit from enhanced management, investment and repositioning. We have the expertise, capital and patience to revitalize assets that more traditional funds may find too complex or encumbered.”

Lasky will be chairman of the board of LOG. He brings more than 40 years’ experience to the position. Besides heading up Lodging Unlimited, he is chairman of both The Lodging Conference and The International Hotel Conference. “The hotel industry is just now coming out of an economic tornado that severely impacted all segments and markets in the country,” Lasky says. “We seek hotels that are in situations that may be difficult to untangle or require substantial work to turn the property around.”

LOG is seeking situations as much as it is seeking assets. Typical investments sought by the company include hotels that are:

  • Under the effective control of a creditor through foreclosure, in-process foreclosure, receivership or creditor-in-possession agreement;
  • Filing bankruptcy and in need of a plan, new management and recapitalization;
  • In need of funding for non-bankruptcy reorganizations;
  • In situations where creditors or owners prefer to hold the asset into a better future climate through a joint venture consisting of newly infused capital and management;
  • Merely “hanging on” to forestall a large negative taxable event;
  • Unable to be refinanced and where additional capital to make up debt shortfalls make the difference;
  • Within a general real estate portfolio and, rather than a spinoff, a buy-in opportunity exists in exchange for new management and new capitalization.

“As we come out of this recession, there are hundreds of properties with seemingly insurmountable problems,” Lasky says. “These types of properties are our sweet spot.  We have the people and systems in place to perform due diligence quickly, complete the acquisition quickly and take over a single property or portfolio in less than 24 hours.”