ATLANTA—Although Legacy Ventures might be a new company in the official sense, there are years of experience behind the name and new configuration.
The company began 20-plus years ago as Legacy Property Group, which focused on development, ownership and asset management of real estate, according to Founder and President David Marvin. About 10 years ago, the business focused its energies exclusively on hospitality, and then explored the operations/management side through a spinoff subsidiary of its restaurant side before doing the same with hotels. In January 2016, the affiliated companies were reformed into Legacy Ventures.
“Late last year, we realized one of our biggest strengths is the breadth and depth of our toolbox,” Marvin said. “It was much more powerful and appropriate to talk about our company as all of the things we are as opposed to three separate silos, thus born Legacy Ventures.”
The transition from multiple entities to one overall company has gone well, Marvin said, especially because the company’s development projects and third-party arrangements that have been in the works for a while are coming to fruition. Legacy Ventures operates all of the properties it owns, and it operates some as third-party managers, such as the Embassy Suites by Hilton Chattanooga Hamilton Place that was named Embassy Suites of the year by Hilton Worldwide Holdings in 2014.
“It gives us a great deal more credibility and sets us apart from our competition,” Marvin said. “Our real-estate and asset-management arms are fairly robust, and our in-house design, construction, marketing and restaurants are fairly formidable.
“I think we’re making a great impression and getting the word out about the impact we can make on a property.”
An active pipeline
Legacy Ventures is working on several projects, including the DoubleTree by Hilton Hotel Atlanta Downtown, which the company bought from Blackstone Group in August 2015. The in-house design team has helped to supercharge the transition, Marvin said, as the hotel originally opened in the 1960s and the team is renovating the property with a midcentury design. The renovation is expected to be completed by the year’s end.
The company also has combined another two hotels in Atlanta into one dual-brand $80-million project: a Canopy by Hilton built on top of a Homewood Suites by Hilton.
The company has two other projects that Marvin said he couldn’t share specifics about as of press time. One is in the central perimeter market of Atlanta and will be an upscale, select-service hotel. The second is a small-room urban center hotel which could fit with the Moxy or Tru brands, he said. The company is in discussions with some brand options for both of the projects.
Legacy Ventures also recently took over a number of restaurants in the Corpus Christi area of Texas, Marvin said, and as the properties further develop, the company is looking at a 150- to 175-room upper-upscale boutique oceanfront hotel within a year or two.
Opportunities and challenges
In 2015, Legacy Ventures’ hotel properties saw an increase of 10% revenue-per-available-room growth compared to 2014, Marvin said. A total of 65% of that growth is attributable to occupancy, he said, while 35% is from average daily rate. The company entered 2016 with a portfolio occupancy at or near 80%.
“Naturally what we’re seeing now is more opportunity on the rate side,” he said.
The company is on track through the first six months of the year to grow ADR 10% for 2016, he said, as there’s no more occupancy to give up.
The labor market is tight, Marvin said, and the company struggles to find good people. Wages are going up, which puts pressure on operating statements, he said, compounded with the new federal overtime rules set to go into effect in December.
On the development side, the capital markets are tightening up again, Marvin said, and construction costs are escalating. There is capital remaining for high-quality projects affiliated with strong brands and sponsorships, he said. While capital is being cautious now, Marvin said Legacy Ventures can continue with its deals because of the company’s quality of work and its reputation.
“We expect to be underway on two new hotel developments this year,” he said, adding there would be more to come. “We’re seeing other opportunities to deploy our unique abilities to other individuals to reposition or renovate properties.”