Fortuna Realty Group in New York City is a privately held real estate investment and hotel development company led by Morris Moinian, an Iranian émigré who moved to Great Neck, New York, when he was 15 and began buying real estate at age 20.
Moinian began his business career in 1979 with the establishment of Chattanooga Manufacturing, which expanded to become one of the largest women’s apparel suppliers to big-box retailers such as Macy’s, Marshalls, and Sears. He got his start in the hotel business some 16 years ago when he acquired a tennis club to develop the Dylan Hotel, a property he says he bought for a pittance and sold for US$80 million.
Today, his portfolio today includes, among others, the Hotel Indigo in Chelsea and the Garden City Hotel in Long Island, and this December he will open the jewel box Hotel Hugo, a 122-key lifestyle property in SoHo’s newly coined neighborhood of Hudson Square. Moinian told HOTELS he also just bought another major site for a few hundred-room hotel in Midtown Manhattan, which will close in a few months.
Fortuna is a vertical operation with about a dozen executives who manage all aspects of a project from start to finish — zoning analysis and financing to structural and interior design and management.
Moinian has big plans for expansion, and his new head of acquisitions Ashish Lall is working to find a fund partnership to fuel expansion currently focused on New York with a longer-term eye on markets like Chicago, Miami and San Diego.
HOTELS spoke to Moinian this week to learn more about his operating philosophy and plans going forward.
HOTELS: Tell us more about The Hugo.
Morris Moinian: It is designed with Italian stones, millwork, stainless steel and a limestone façade. The entire hotel was pretty much made in Italy, handcrafted and it was very expensive to build, considerably over budget. Given its location and market conditions, I am very pleased and have received great comments about the name. It will attract high-end travelers, and ADR will be comparable to other SoHo boutiques like the Mercer and SoHo Grand in the mid-US$400s.
HOTELS: What else is under development?
Moinian: We have several thousand rooms in the pipeline. Currently, we are designing and building a 176-room Aloft in a fantastic location on 38th off 5th Avenue. We are very pleased, and Starwood will be more pleased as it will give them a flagship in New York City.
We also acquired the old Pan Am Magazine building on one of the best corners of the world at Avenue of the Americas between 43rd and 44th Streets. We have collected air rights and are preparing to design and build a 40- to 50-story tower with a 400-room luxury hotel. The brand direction is unknown, but we will likely work with a well-known brand.
HOTELS: Describe your operating philosophy.
Moinian: It is all about timing, professionalism and a design focus. We make decisions quickly, unlike large hotel companies. We just get together and make decisions. Frankly, that is money. We can buy a site and have a hotel up and running within 18 months, whereas with others it would take several years.
HOTELS: Do you have investment partners?
Moinian: We have very few partners. Just a few family and friends. I am it. We are looking for a fund to partner with as I bought heavily the past few years, and I am not a guy who wants to leverage. I don’t welcome debt, so that is where a fund comes into play to partner with us. We hope to have a fund partner in 2014, and the target is US$500 million.
HOTELS: Tell us about your Long Island hotel.
Moinian: The Garden City Hotel has been around since 1874. We bought it about a year ago, completed renovating the common areas and just launched a steakhouse. We are starting to renovate the 272 suites — all again with Italian-made furniture — and constructing a world-famous spa. We are bringing the hotel back to its glory days. It is a destination very aggressive with catering with a huge market for its ballroom. It is the leading hotel on Long Island. There is no second.
HOTELS: What are your plans for Mr. C’s?
Moinian: I am just an investor. We don’t manage. We are looking to expand, for sure. Mr. C’s in Beverly Hills is very successful, and the investment group is looking for locations in New York City and Miami. Good locations to fit the Mr. C’s brand are hard to come by.
HOTELS: What are your longer-term goals?
Moinian: We will not stop and ultimately want to be one of the key major hotel owners in New York City. Eventually we will move to other markets, but our main focus for now is New York City and Long Island.
HOTELS: Are you selling assets?
Moinian: No. Put this in bold: For every square foot of New York City, especially in hospitality, there is a billion dollars sitting on the sideline waiting to jump in. So why sell?