Taking On Turnaround Opportunities
Edgewater Group Invests In Distressed Assets To Improve Operations, Profitability
The record industry has what are called “deep cuts,” which basically are great songs from albums the general public rarely hears or doesn’t know. Tom Petty’s “Shadow of a Doubt’’ from his “Damn the Torpedoes” album is a good example, as is Bruce Springsteen’s “New York City Serenade’’ from 1973’s “The Wild, The Innocent and The E Street Shuffle.”
A “deep cuts” cottage industry has developed over the past several years, thanks mainly to satellite radio and the Internet, giving birth—or re-birth—to songs that might otherwise be known only to a few.
That brings us—in the most roundabout of ways—to the Edgewater Group, a Tallahassee, FL- based boutique, multi-disciplinary investment firm that focuses on secondary and tertiary markets. In other words, the Edgewater Group, founded in 2008, looks for “deep cuts” in the hospitality industry—properties in smaller cities and towns that generally are in some kind of financial or operational distress.
But let’s not get caught up in the word “distressed.”
“‘Distressed is in the eye of the beholder,” said Ketan Vora, founding partner of the Edgewater Group. “What we really like are properties that require work—from capital to better management to better treatment of guests.”
That work, Vora said, might be working with a hotel brand specific to a property, or even re-branding a property.
“Anything that is a value-added component. Not just lipstick on a pig and flipping it. We actually operate these investments. We have more than 200 team members. We do what is most beneficial for our team members, each property and each local market,” he said.
Case in point: the Wyvern Hotel in Punta Gorda on Florida’s Central Gulf Coast. Edgewater acquired the 63-room boutique property from its original owner in 2013. The hotel wasn’t distressed, Vora said, but was struggling with its food and beverage operations.
Edgewater brought in two F&B concepts. It turned the downstairs area into a refined dining spot, called 86 Keys (complete with red piano), and created a tapas-style menu for the rooftop bar, called Perch 360, which celebrates the view of Charlotte Harbor and Southwest Florida sunsets. Edgewater also brought in new furnishings to Perch 360 to help guests gaze out on the sunset and added bands on weekend nights.
Perch 360 has become one of the more acclaimed rooftop bars in Florida, its pool ranks as one of the best in the Sunshine State and the Wyvern Hotel shines as one the top boutique hotels on Florida’s west coast.
Edgewater’s hospitality portfolio also includes a pair of properties in the Florida Panhandle town of Apalachicola—the 30-room Water Street Hotel and Marina and the Coombs House Inn & Suites. Each are part of Choice Hotels’ Ascend Collection that embraces local heritage and culture. Coombs House Inn & Suites, for example, consists of three Victorian Mansions that reflect back on the golden age of Florida’s Gulf Coast.
Another distinct Edgewood property is the Hampton Inn Atlanta/Stone Mountain, located near the popular state park and only a short drive to downtown Atlanta.
Hospitality is the biggest part of Edgewater’s U.S. assets that also include student housing and strip malls. Through its SunBelt Asset Management division, Edgewater leases homes near the Florida State campus and FSU’s Doak Campbell Stadium.
The recent sale of the Valley Crossing Shopping Center in Tallahassee, FL, is another example of how Edgewater is eyeing small markets with big potential. The property was originally bought by Edgewater Valley Forge Fund II LP for $600,000 and sold for $1,950,000 on June 28, 2021.
Back on the hospitality side, Edgewater’s TownPlace Suites by Marriott in Tallahassee and Mobile, AL, each have been recently renovated.
“We’ve concentrated on Florida, Georgia and Alabama,” Vora said. “The markets that we are in have seen stable growth. Those secondary and tertiary markets are not relying a lot on global and international travel, but more on the regional business traveler and regional leisure traveler.”
