As you diversify, it’s a good idea to work with those who have specialized expertise. Here’s how one company that’s helping investors find success in the hospitality industry, even during unprecedented times.
While there are many known benefits to 1031 Exchanges, there are a lot of misconceptions about what types of property investments qualify. Some investors don’t realize that 1031 can be used for a wide range of property types, allowing them to diversify and expand their portfolios.
If you’re investing in a commercial property for the first time, whether as an individual, in a partnership, or through a DST, you’ll want to avoid being surprised by factors you haven’t considered, which is why it’s best to work with someone who’s been there before. At JTC, we like to work with companies that have expertise in key areas and can provide clients with the utmost in value when it comes to qualified advice.
NewGen Advisory is a full-service commercial real estate brokerage firm that specializes in hospitality and lodging assets. Its team of dedicated industry specialists provides NewGen’s clients with access to a network of industry leaders and qualified investors, both nationally and internationally. By approaching every transaction with an owner-and-investor mentality, they’re able to outperform the competition through state-of-the-art marketing strategies that penetrate pools of qualified investors.
The real key to NewGen’s success is keeping the client’s best interests in sight, from speed to close to maximizing return on investment. That’s why NewGen offers advisory services that go beyond a typical brokerage, so clients can take advantage of their expertise in the hospitality space. We spoke with Suraj Bhakta, CEO of NewGen Advisory, about how the firm has focused on the things that set it apart to provide greater value for its clients.
How did you settle on hospitality as your firm’s niche? Are there things in your background that allow you to bring expertise to those transactions that other brokers might lack
Bhakta: The founders of our team have grown up in the hospitality industry. Many of our families have been owners and operators of hotels, so we understand the intricacies of hotels like most brokers do not – everything from cleaning rooms to room sales, acquisitions to branding, we have experienced it all. That type of insight is impossible to teach.
Most brokers just came into sales via other channels, so you only get the sales pitch. At NewGen, we are advisors first and salesmen second. What is in your best interest is in our best interest. We take pride in making our clients money and saving them money.
NewGen has a presence throughout the country – has the pandemic’s impact on travel affected the way investors evaluate properties in other states if they’re unable to visit them personally?
Bhakta: The pandemic was a first of its kind for all current generations. Its impact was felt in every corner of commerce. Our hotel sales and acquisitions industry was no different. When travel came to a halt, the hospitality industry was grasping for air with an unprecedented drop in occupancy and revenues.
As the market rebounded, it created significant issues with valuations: nearly every property had a drop in revenue and sales that created a hole in the valuation. If lenders stuck to their normal processes, with these drops, every deal appeared unfinanceable.
Our sales team worked vigorously to create levels of comfort for lenders and investors, letting them take a peek into the 2019 values to really create a buzz around the potential of every asset upon recovery. That carried investors’ confidence to new heights. We created virtual tours of hotel properties for lenders and investors to continue to see in real time what the properties look like.
Have you seen an increase in investors asking about impact investments like Opportunity Zones in recent years? Does the hospitality sector have strategic advantages for these types of investments?
Bhakta: We have seen a significant increase in investors searching for Opportunity Zone projects. Many owners have been in the industry for over a generation, and as equity consistently increases year over year, many of them are subject to significant capital gains taxes. As such, a lot of owners have used 1031 exchanges to defer taxes, but Opportunity Zones provide a unique opportunity to eliminate a good portion of those taxes.
JTC provides a number of solutions ideal for those investing in the hospitality sector, such as our capabilities as a 1031 Qualified Intermediary, including for DST investments, as well as fund administration solutions for Opportunity Zone projects. Thanks to our proprietary eSTAC technology platform, we make it easier than ever to keep track of investments with 24/7 access to information and industry-leading compliance and security measures.