Opportunistic investor Shopoff Realty Investments is keeping a close eye on the hotel sector through this downturn. The sector could be a ripe opportunity, particularly for value-add investors, like Shopoff.
“There will certainly be opportunities as a result of this sudden downturn, as some owners will find themselves in need of a sale and those properties may come at a discount,” Bill Shopoff, president and CEO of Shopoff Realty Investments. “I think the hotel sector will be an area to keep an eye on as hospitality is being hit hard during this time of self-quarantine and safer at home measures.”
Of course, the hotel sector isn’t the only area where investors might be able to find a deal once we enter the recovery. Shopoff is analyzing opportunities across asset classes. “We are actively working with many sources to uncover potential opportunities for value, including lenders, corporations, institutions, and our wide network of brokers,” he says. “We will continue to look at ways we can transform properties and add value, whether that be in completely reimagining the properties current use, or in how to simply elevate it in an even more competitive market.”
Investors like Shopoff are well positioned because their business model is conducive to handling challenged properties, which could potentially be more common following this event. “Our reputation for having the knowledge, expertise, resources and vision to take on challenging assets or find creative solutions, makes us a go-to company for those who need to solve complex issues,” says Shopoff. “Additionally our creative solutions to innovative capital stacks may allow us to acquire a few assets during this period of market dislocation.”
While many investors have taken a pause through the market disruption, Shopoff says that it has been business as usual. “Thankfully we had already had a business continuity plan in place, and had transitioned many of our paper-based systems over the past few years, which made working remotely fairly seamless,” says Shopoff. “This includes our accounting department, who prepare and disseminate thousands of K-1 documents and dozens audits this time of year.”
However, the human aspect of deals has been an adjustment for the investor. “I think the hardest part is missing the in-person, human interaction and relationship building that is so important in this community and to almost all businesses,” says Shopoff. “I’m certainly looking forward to getting back in the field for site-visits, and shaking hands with our valued partners across this industry.”