Restructuring For Long-term Relevance
Raines Broadens Focus With Rebranding And Eyes Further Portfolio Expansion
With a major rebranding and restructuring behind it, long-time owner/operator Raines is now moving ahead with plans to strategically grow its portfolio of Southeastern hotels and take the company as a whole to the next level.
The Florence, SC-based company—which was founded in 1988 and includes some 20 branded and boutique hotels—was previously known as Raines Hospitality. The family-run company rebranded earlier this year to reflect its broader offering of services—which includes both hotel and commercial real estate development, as well as the rehabilitation of historic properties—and subsequently acquired SpringBridge Development, LLC, in June.
SpringBridge had been providing development services to the Raines portfolio since 2013 and was instrumental in the revitalization of the Hotel Florence, which is part of the company’s newly formed Woven division for boutique or lifestyle hotels. As part of the rebranding effort, Raines also established its Array division, which specializes in commercial real estate and office development.
Grey Raines, managing partner, Raines, noted the restructuring is designed to make the company relevant for the “next 25, 30 years or longer.” He also acknowledged that the shutdown caused by the pandemic represented something of a reset for the company.
“It allowed us to further define who we are for our external message. Internally, we knew who we were and where we wanted to go, but we needed to prepare and understand how to promote ourselves externally and that’s what we’ve done. We made some really good hires during COVID, I think that we were one of the few companies that were actually investing in our people. We never laid anyone off in the corporate office level and we actually added to the corporate team,” he said.
That corporate team now includes David Tart, who joined Raines as managing partner as part of a roll up of Four17 Partners, which was a long-time JV partner. Grey Raines noted the company has been able to leverage Tart’s extensive development expertise, which complements his own operations and development experience. In addition, the company’s Array division is being led by Chris Scott—who was previously a partner with SpringBridge—while Woven is under the direction of SVP Gavin Philipp, who was formerly with Charlestowne Hotels.
“The restructuring really allowed us to come in put a great group of talented folks together,” said Raines.
Grey Raines further added that the company “had a bigger story to tell” and is now looking at aggressively growing its third-party management portfolio.
“We felt like we had value to bring on the third-party management side that’s very different in that we want to know all of our owners personally. We hold principle-to-principle discussions. We are owner/operators, we’re not just a third party that can enter and exit a contract at will. That’s not who we are, we stand behind any project that we get involved with. With our capacity we say ‘no’ more than we say ‘yes’ because we’re looking for long-term partners,” he said.
Raines maintains equity in all but three of its properties, which primarily represent branded select-service hotels. In addition to the Hotel Florence—which is part of the Tapestry Collection by Hilton—the company’s Woven division also includes the Foundry Hotel in Asheville, NC, and the Waynesville Inn and Golf Club in Waynesville, NC. In October, the company completed the first phase of a multi-million-dollar renovation and rebranding of the Waynesville property after acquiring it in April.
Grey Raines further added that the company has a number of projects in development ranging from office buildings to hotels. He also acknowledged that acquisitions could become a more viable means of growth going forward as the gap between buyers and sellers seems to have narrowed.
“We’ve definitely seen those [larger, big money] players slow down. We’ve seen those players start to really look at the math behind each of their acquisitions and that has allowed more realistic pricing to where we become a player in the game,” he said.
Geographically, Grey Raines also noted that while the company expects to be “well positioned” throughout the southeast by the end of ’22, it has also explored hotel projects in Texas, Colorado, and Jackson Hole, WY, for example.
“We expect to grow out of the Southeast. We’re not opposed to any project whether it’s development, it’s management or both. But the focus is to continue to grow our footprint and dominate the southeast and from there be strategic on where we grow out West,” he added.