LOUISVILLE, Kentucky—21c Museum Hotels has been known over the past decade for its approach of integrating contemporary art galleries into hotels. Now company executives are planning more aggressive growth, thanks to a new joint-venture partnership with Junius Real Estate Partners.
Junius is a specialized real estate investment unit of J.P. Morgan Private Bank, and dedicated Junius capital will give 21c the ability to develop up to $250 million in projects.* The company also will hold a minority ownership stake in 21c.
It’s a new structure for 21c, which co-founders Laura Lee Brown and Steve Wilson started with a single property in Louisville, Kentucky, ten years ago. Since then, the company has grown to a portfolio of six hotels and 699 guestrooms, along with seven restaurants, largely in the middle of the U.S.
To date, the company has developed, operated and financed all of its own projects, with some local investment partners. The company will continue to operate all of its properties under the new joint venture; the difference will be its ability to expand more ambitiously, Wilson told Hotel News Now.
“As we grew, we realized we had huge potential on our hands and it was something larger than we could deal with on our own, so we went searching for the right investor,” Wilson said.
Craig Greenberg, 21c president, said the new partnership will “help us accelerate our growth, enter larger markets and develop in markets that we really wanted to be in.”
For Wilson, that means more gateway markets, like Miami; New Orleans and New York City, to name a few. And his personal dream for a 21c location? Cuba’s capital of Havana.
“When we first started expanding, we analyzed what made the concept work, what really defined a 21c,” Wilson said. “At first we thought being in secondary markets was part of the formula, but now we know the product is unique enough it can stand anywhere. It’s reassuring to know we have a product that will be notable anywhere.”
The first hotel financed by the joint venture is under construction in Nashville, Tennessee, with a projected opening date in 2017. Also under development are hotels in Kansas City, Missouri; and Indianapolis.
Appealing to the experience-minded guest
21c Museum Hotels all have world-class contemporary art displayed throughout the property in rotating, site-specific installations. The company focuses on local artists and outside-the-box experiences, which it has applied to the hotel and restaurant side of its business as well.
Wilson and Greenberg said those core elements translate well for today’s hotel guest, who is looking not only for a great night’s sleep and chef-driven food and drink, but also that element of unique experience.
“We’re going to continue to do what we do well, but we’ve already crossed the lines of F&B, hospitality and art,” Wilson said. “I think we’re a lifestyle brand. We get so many notes from guests who love us, who ask for us to be in other cities. They enjoy contemporary art, cutting-edge food, wellness, a great stay, great design. Being a lifestyle brand opens us up to lots of interesting things.”
However, Wilson was quick to point out that the experiences at 21c hotels are not cookie-cutter, especially given each property’s rotating art installations and programming. Five of the company’s six open properties were historic building preservation projects, which the company will continue to pursue while also remaining open to new-build opportunities.
While its current portfolio is concentrated largely in secondary cities, the hotels are all part of the founders’ original vision to invigorate downtown areas.
“When Steve and Laura Lee created 21c, it was part of an effort to try to revitalize our hometown, downtown Louisville,” Greenberg said. “To make contemporary art accessible to people who might not have an opportunity to experience it. We went with that as our core mission, and it remains true to who we are today.”
He said those values resulted in building a team of more than 1,000 employees who further reinforce the authenticity of the brand.
“We have people on our team who have the opportunity to be themselves while providing great hospitality for our guests, and that’s why guests keep coming back,” he said.
“As Steve said, his dream hotel location is Havana,” Greenberg said. “There are still some hurdles, but we never let hurdles stand in our way.”
* Correction, 14 September 2016: An earlier version of the story incorrectly stated the amount of capital Junius Real Estate Partners is contributing to the partnership.