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Checking in with Commune Hotels and Resorts

Checking in with Commune Hotels and Resorts

Commune Hotels and Resorts signed a definitive agreement last week to consolidate the company to sole ownership. Through his private equity firm Geolo Capital, Commune’s chairman John Pritzker bought the 50 percent interest in the company held by Jason, Michael, and Lawrence Pomeranc, the three brothers who co-founded Thompson Hotels in 2001. Thompson and Joie de Vivre came together to form Commune in 2011. Coming out of the deal, Commune has 33 hotels with 14 in the pipeline. The Pomeranc brothers will keep 60 Thompson, Thompson LES, and 6 Columbus in New York City, Thompson Beverly Hills, and Hotel Victor in Miami.

The news comes on the heels of another big announcement from Commune—a third brand, Tommie Hotels, is slated to launch in 2015 with two ground-up hotels in New York City. Pritzker and Commune CEO Niki Leondakis recently spoke with Lodging about the company’s transition and what’s in store for the future.

Lodging: What led to the consolidation of Commune to sole ownership?

John Pritzker: The consolidation allows us to be much more nimble in our decision-making and execution. Any time you’re in an environment where you have partners you have to get their buy-in as well. Now there’s a better alignment between capital and management. Also it allows us to focus on multiple brands, including our new brand, Tommie.

Niki Leondakis: Working with John quickly to make decisions that move the company forward is such a positive. We can now partner together to create this multi-brand platform with three different brands offering customers from different demographics and psychographic profiles options that will give us the ability to capture guests throughout their entire life cycle and execute on each of those three brands with a common vision.

Lodging: What are Commune’s main goals for its three brands, Joie de Vivre, Thompson, and Tommie?

Leondakis: What Commune brings to all three brands is that entrenchment in the local community, the neighborhood, the culture, and the environment that the hotels are in. Whether it’s Tommie, Joie de Vivre, or Thompson, they will all be of the place and will offer highly inspired design. Great design is certainly not unique in the lifestyle segment but we’re combining that with the connection to place and thoughtful, friendly, caring service for the guest.

Pritzker: Our goal isn’t size; our goal is continuity in the ethos of the company. What I’m focused on is not becoming a behemoth or homogenized across the brands. It can be very tempting from a purchasing standpoint to lump things together to get greater velocity.

Lodging: About a year ago, Geolo Capital teamed up with AJ Capital Partners to buy the former Chicago Athletic Association building and convert it into a luxury hotel. Would you consider other joint venture partnerships in the future for individual properties?

Pritzker: Absolutely. The CAA project was a very special one for me. Having grown up in Chicago, having a sensitivity and a bent toward architecture, and the fact that it sits across from Millennium Park made that one irresistible. That was a special case where everything came together and we just decide to put majority of the capital in. We can scale downward and offer sliver equity, we can do mezz lending, we can do bits of key money. It’s as the situation requires. But we have that economic flexibility, which is a huge advantage for us.

Lodging: What is the company’s expansion plan?

Leondakis: Our growth plans include domestic and international growth. And our targets for that growth are Europe, Asia, and Canada. More to come on that expansion, but we’re working on it as we speak.

Lodging: Will the company launch additional brands in the future?

Leondakis: We absolutely may. Our innovation incubators are at work.

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