The Nakash family, who amassed a billion dollar empire in the 1970s by creating those now iconic, tight-fitting Jordache jeans, has also quietly developed a small hotel empire with 20-plus hotels worldwide, primarily in Miami Beach and across Israel with another two recently acquired in Berlin.
Brothers Joe, Ralph and Avi Nakash are in the news again having recently purchased the Versace Mansion (most recently known as the 10-room Casa Casuarina) on Ocean Drive in South Miami Beach for a cool US$41.5 million with plans to re-launch the famous property right next door to its existing Hotel Victor.
The Nakash’s Hotel Victor was also in the news a few weeks ago when the brothers were surprised to learn of the break-up of the Commune Hotels & Resorts partnership between Geolo Capital and the Pomeranc brothers, which resulted in a last-minute management and flag change just as the Victor was about to re-launch after an US$8 million renovation led by design firm Yabu Pushelberg. The hotel is now being self-managed as opposed to being operated by the Pomeranc’s group.
Now the family still has to decided how to best integrate the entire city block on Miami Beach which houses the mansion and the Victor. While decisions are forthcoming, HOTELS had a chance to speak with Nakash Holdings Director of Real Estate Jonathan Bennett to talk about the company’s plans for its hotels going forward.
HOTELS: Why did you decide to change management at the Hotel Victor?
Jonathan Bennett: We didn’t elicit the management change. We were like the kids in the divorce – collateral damage. When we signed with Commune to make it a Thompson, it was Thompson together with the Pomeranc family. Now you split the baby and can have one without the other. Not to say one or the other is not a great option, but it is not what we signed up for. Anytime you do these projects, you always expect changes and bumps, but that was a big change relative to the millions we poured into the building. We thought there was going to be a certain management and branding in place, and then two weeks before re-opening we get a call from the Pomerancs saying we are no longer connected with Thompson hotels. We were shocked and scrambling as we were planning the opening. We were trying to create a certain vibe and attract a certain level of customer, and weren’t sure how the market would react to this divorce.
I love all the people involved on both sides. For us, when we had them together, we had the best of both worlds. Now things have changed, and faced with all of this we decided very recently to make Hotel Victor a brand within itself. We knew the Versace Mansion was coming and from a branding perspective we decided these properties could do very well standing on their own.
HOTELS: You have been a quiet hotel management company.
Bennett: Think of the company operating more like Richard Born and how he operates as one of the largest owners of boutique hotel rooms in New York City. Each one of his properties has its own story and brand. He has been very successful that way. Similarly for us in Miami, each property has its own story and brand. It makes the management company a non-branded entity behind the scenes.
HOTELS: What are your plans for the Versace Mansion (which has been closed since May)?
Bennett: We have many plans. The low-hanging fruit is to run it as it was before – a super-luxury boutique hotel with a high-end restaurant and event space. Barton G, who was running it before, is interested and we are talking with them as well as others.
We have been talking to the Versace family about putting a Palazzo Versace there, and they are interested. Trump bid against us in this deal and we are talking to them about a partnership. We are talking about turning the Victor and Versace Mansion into a compound, but I find that to be challenging from a physical plant standpoint. To make that work and maintain the identity of two properties would be difficult.
If we can come to an agreement with Barton G, from an efficiency perspective we could hit the ground running and that would be beneficial.
There is not much that needs to be done to the physical plant. However, we are toying around with doing some sort of retail on the exterior without affecting the interior. It is the second most photographed home in the United States and an opportunity to capitalize on the traffic. We have talked about doing something like the Louvre with its glass box on the outside.
In fact, we have a lot of ideas and are making evaluations. We will not make a rash decision. But once we close the deal, we will get back open right away – but not in its final iteration.
HOTELS: What further hotel developments are you considering?
Bennett: We are always looking. We have been negotiating for two or three years in Manhattan. It is easiest for us to buy an existing operation and reposition it to make it better. But we are also working on something now in Manhattan that would be an amazing ground-up development in partnership with a marquee name that doesn’t have a New York City hotel. We will see where it goes.
HOTELS: What are your expectations for the Hotel Victor?
Bennett: I think we will get an ADR of US$350 a night, and it could go higher based on the market. Last year, occupancies during the winter season were in low- to mid-80s, and no one thinks it will be less this year. Miami is hotter than ever. I think Hotel Victor will be an incredible alternative to hotels like the W or SLS. It will be a quieter scene, less expensive, and with same level of comfort and high design.
HOTELS: How is your portfolio performing?
Bennett: In general, we have done very well with our hotels. We buy right and make improvements. We just bought a hotel in Jerusalem in dire need of renovation. It has a great location next to the new light rail and we bought at a good price. We will put millions into it and it will become something new and dynamite. We love those types of opportunities and that is typically how we buy hotels.