|You may think a 13-year NBA veteran is highly accustomed to the finer things in life, especially when it comes to travel. First class air travel, perhaps even private air travel, might seem like the only way to fly for one in such a position. You might be interested to learn that David Robinson, a man who has won NBA championships, an NBA MVP award, and Olympic gold medals, still regularly flies commercial. And although he has found himself in many four- and five-star hotels during his playing days, he’s also stayed in his share of midscale and select-service hotels, particularly during the early days of his basketball career.
In 1989, when Robinson entered the NBA, the league wasn’t quite what it is today. Player salaries were significantly more moderate compared to the nine-figure dollar amounts today’s superstars receive. And, NBA travel was significantly less luxurious. It’s no secret that sports salaries and the values of sports franchises exploded in the mid-1990s, which happened to be the prime of Robinson’s career. “Later in my career we were staying at The Ritz-Carlton, but back then it was places like the Hilton Garden Inn,” he told Lodging one March afternoon at the Hilton Garden Inn Houston-Energy Corridor, which is owned by the Admiral Capital Real Estate Fund (ACRE). ACRE is a value add real estate fund co-sponsored by Admiral Capital Group (ACG)—started by Robinson and business partner Dan Bassichis and USAA Real Estate Company (USAA). ACRE currently manages over $100 million of office and hotel assets across in Los Angeles, Las Vegas, Austin and Houston, including the acquisition of a performing loan on a Renaissance Hotel. Investors in the Fund include USAA, Texas Teachers and other institutions and family offices.
Even now, he sees hotels in the midscale and select-service sector as an attraction both personally and in business. He openly admits that he’s not an expert in hotel operations. While he’s stayed in many hotels, “Everything was arranged for us,” he says of his playing days travel. But Robinson and his wife, Valerie, certainly take their travel experiences into account when deciding on which hotels are performing well and which are not. And, Robinson says, they tend to look at hotels from different points of view.
“We have two different ideas of what works for hotels,” he quips. “She certainly understands service. She understands how when a guest is bringing all of their kids into a hotel, what they need. [The Robinsons have three sons.] Me, I’m thinking about getting in and out and keeping the right profile—not too high and not too low. A place like the Hilton Garden Inn makes perfect sense to me. I can’t think of a better place to get in and out of, with the right prices and the right amount service for me to pop into town and stay for two or three days.”
The hotel is the first foray into the hotel business for the Admiral Capital Real Estate Fund created by ACG and USAA, but it won’t be the last. The Fund is in the process of acquiring another select service hotel and plans to acquire several more lodging assets in this debut fund.
What’s interesting about the investment is that Robinson and Bassichis chose to invest in the select-service market, rather than the luxury market many celebrities tend to flock to. In this month’s cover story in Lodging, Robinson and Bassichis say they saw an opportunity in the hotel market as they looked at their options to continue to seek quality returns and fund community development and education in the areas in which they conduct business.
“When we first got into it the markets were soaring. As we’ve seen the world change a bit, now the opportunities are still there, they’re just different. There are a lot of distressed properties, a lot of over-leveraged properties. I think we are finding our niche for those opportunities,” Robinson says in the article. (The May issue of Lodging is available here, as well as via the Lodging magazine mobile app available in the Apple App Store.)
Robinson and Bassichis both say they believe that the opportunities in the hotel industry right now lie in select service or focused service. And that’s fine with them. As a smaller Fund, the company is being selective in their choices of investments. The select-service market offers an opportunity to seek higher returns, something that it is important since Robinson and Bassichis are committed to donating 10 percent of all of the Fund’s carried interest and management fee income to community programs in the areas in which they invest.
“The opportunity really right now, if you’re interested in stable returns, is in places like the Hilton Garden Inn. Select service assets are very efficient and can adapt rapidly in down markets, which we’ve clearly seen over the past couple of years” Robinson says.
Look for part two of this article tomorrow when Robinson and Bassichis discuss partnering business with community and social involvement, including diversity ownership in the hotel industry.