Stephen Brandman, co-owner and chief executive officer of Journal Hotels, Los Angeles, is changing his approach with his latest venture. Brandman, who has held management positions at InterContinental Hotels Group and Thompson Hotels, among other firms, says he previously built brands in which “people would turn their assets over to us, and the buildings would then fit what the brand was.”
Contributed by Karen Kroll
This time, Brandman, who shares ownership with Hong Kong-based Gaw Capital Partners, is creating a collection of hotels with active public spaces defined not by demographics but “psychographics and how people perceive themselves,” he says. The Journal’s eight properties include Mondrian Park Avenue in New York, the Hollywood Roosevelt in Los Angeles and the Ambassador Chicago. It asset manages The Standard Highline in New York and just announced two projects in downtown Los Angeles.
Brandman points to a range of reasons that might play into owners’ decisions to keep from branding. A REIT may plan to sell in five to seven years, at which point the brand could change. In some cases — like the Trinity Hotel in Los Angeles, which Journal will operate — the hotel name enjoys a legacy. So, rather than choosing a hard brand, Journal Hotels can provide individuality and develop “a connective tissue between its collection of hotels,” Brandman says.
Industry consolidation has resulted in fewer choices, Brandman adds. “Things are becoming too homogenous. It’s getting very difficult to understand all the subtleties between the big box brands.”
Brandman estimates that Journal Hotels’ portfolio will grow to 11 or 12 properties by year-end. After that, it will add about four properties annually for the next four or five years. He is focused on North America but says he will look at London at some point.
Journal offers options to owners, including property management, more strict concentration on asset management, and simply managing restaurants or bars. “In the lifestyle space, ownership groups really want their properties to be very personalized,” Brandman says. “We’re able to provide customization.” He expects an approximately 70/30 breakdown between managed and owned properties.
When it comes to exit strategies, Brandman jokes that he needs to see his 3-year-old son through college. “We’re looking at continuing to grow the collection of hotels, and we’ll see where that road takes us.”
Journal Hotels’ challenge is staying ahead of growth; Brandman’s had to build infrastructure more quickly than he intended. Yet after 30 years in the business, “I’m very humbled by the fact that we’ve been received so well,” he says.