The recession hasn’t deterred Elif Bali, senior vice president of development for New York-based Loews Hotels. She’s pressing ahead with a big agenda. Loews is currently building a 414-room hotel in Midtown Atlanta, with completion scheduled for spring 2010. The company plans to grow its portfolio of 18 hotels and is targeting top 25 markets, particularly San Francisco, Chicago and Boston. Loews also is scouting sites in Canada, Mexico and the Caribbean.
Bali, 36, finds and puts deals together, structuring projects with a development partner. “It’s a very challenging market in which to justify new development. Those projects we’re spending time on now have extraordinary benefits,” she says. The projects offer a very favorable cost structure or a financial subsidy.
Building from the ground up is now so costly that converting existing four-diamond properties has become a pragmatic strategy. “You can hopefully pick up an asset for a fraction of what it would cost to build today, or a fraction of what the previous owner acquired it for,” Bali explains.
The Atlanta hotel is part of a 2.5 million sq. ft. mixed-use project called 12th and Midtown. “Midtown is emerging as the live-work-play destination for Atlanta, which is traditionally more of a drive-to market,” Bali says. “In Midtown we are starting to see a proliferation of shops, restaurants, apartment buildings and offices, so the paradigm is shifting. You’ll be able to do everything without driving.” The design creates a more urban feeling, she adds.
Bali, a native New Yorker, graduated from Cornell University’s School of Hotel Administration. At Sonnenblick-Goldman Co., now Cushman & Wakefield Sonnenblick Goldman, she helped arrange $2.2 billion worth of hotel deals. In 2003, she joined Loews as director of hotel development. The company acquired a key property, the Loews Lake Las Vegas, in 2006.
“The business climate is very difficult,” Bali says. Hotel companies that over-leveraged their firms in recent years now face staggering bills. Soon, Bali adds, those distressed properties may present buying opportunities for Loews. “I don’t think we’ve hit the tipping point yet.”