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Pritzker’s 5 business lessons for life

HotelsLife asked John Pritzker to consider some of the most important business lessons learned. He sat down with his Geolo Capital partner Tom Gottlieb and decided on five pieces of practical advice.

1. Don’t be reactionary. We’re long-term investors and we chant it like a mantra every day! It’s tempting to sell stuff, or think you can sell stuff. But I’m in a really fortunate position. I don’t have a fund, so I’m not obligated to look at things quarter to quarter or even every three to seven years like a fund would have to.

2. Hire really smart people. We have a great team that is highly capable in the areas of developing, building and asset-managing lifestyle hotels, mixed-use projects and resorts. We are very well positioned to create highly differentiated projects that outperform in the long run. We now have a team that knows how to build, develop and operate hotels and mixed-use projects. So hiring really smart people is, I think, a basic. I went through my career, as you can imagine, at Hyatt, as the boss’s kid. When I opened the Hyatt Regency Long Beach, I was able to pull together a really strong executive committee. I started hearing the knock about me was, ‘Oh, well, he just took the best people he can.’ I started thinking, ‘Why wouldn’t you do that? To do anything else doesn’t seem very sensible.’

“Life is short and all of this work should be fun, collegial and interesting. Great partners make it so. Bad ones can ruin your whole day!” – John Pritzker
“Life is short and all of this work should be fun, collegial and interesting. Great partners make it so. Bad ones can ruin your whole day!” – John Pritzker

3. Keep plenty of dry powder. Having access to capital in the event of a liquidity crunch was an edge for us during the last recession. It begets opportunities such as Carmel Valley Ranch and Chicago Athletic Association. Dry powder is a really big deal for us because in the event of a liquidity crunch, there we are. What begat Carmel Valley Ranch was the confluence of Blackstone having to sell because they’d just done the Hilton deal, and the economy had just tanked. We had the capital to do the deal.

4. Don’t put all your eggs in one basket. We are diversifying away from solely hospitality equity investments and have exited the management business. We are actively lending on hotel projects, investing in multifamily projects and pursuing opportunities in disruptive real estate technology companies. My dad taught me this one… We’re pursuing stuff in the disruptive real estate technology company. Think about Sonder, companies like that.

5. Pick really great partners. Life is short and all of this work should be fun, collegial and interesting. Great partners make it so. Bad ones can ruin your whole day! I said to my partner Tom Gottlieb, ‘It’s a pleasure to do a deal with a guy like David Carlins (Magellan Development Group in Chicago, Geolo’s partner in the Thompson, Austin, Texas) because he’s fun, he’s smart, he’s successful, he has a sense of humor, and he listens. On the other hand, I’ve had shitty partners, and it’s not fun. It’s frustrating.

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