In anticipation of a pending industry recovery and a marked increase in demand for their services, asset management specialist CHMWarnick and consulting firm Pinnacle Advisory Group have formed a strategic alliance in an effort to broaden their collective expertise and client bases.
Leveraging a history of working together, the combined alliance will service an asset management portfolio approximating 80 hotels as of press time.
Chad Crandell, managing director and CEO, CHMWarnick, commented on the collaboration during a media conference call earlier this week.
“We just saw an opportunity because of the market that we’re in right now and what we think the momentum is going to be of this recovery. We wanted to formalize it and we wanted to have some structure in place so we weren’t fumbling opportunities away because we didn’t have a structure in place,” he said.
Boston-based CHMWarnick asset manages over 70 hotels valued at roughly $15 billion and is advising on development projects valued at over $2 billion. The 25-year-old company’s services include asset management, loan monitoring, hotel receivership, hotel planning and development, acquisition due diligence, owner entity accounting, management/operator selection and negotiation, capital planning and disposition.
Pinnacle Advisory Group, meanwhile, is a national hospitality consulting firm founded in 1991. The women-owned company provides consulting services to investors, lenders and operators, as well as the country’s major real estate investment and development firms, pension funds, REITs, and insurance companies.
Crandell elaborated on how the deal came together.
“The last year-and-a-half was very difficult and there wasn’t a lot of work to be had out there. So as the recovery began we started to talk with each other to find out what’s going on with them, what are they seeing, and what are we seeing? We’ve used each other in past,” he noted.
Rachel Roginsky, principal, Pinnacle Advisory Group, reinforced the value of the relationship the two companies shared and some of the benefits of the partnership.
“We have very similar educational backgrounds, we know their folks and they know our folks. I think that there’s an opportunity for the asset management team at CHM to get more involved in the due diligence and learn more about why we do certain things before they get involved. It’s going to be a great learning experience,” she said, adding her team would benefit from working on larger projects and some of those learnings.
She further extolled the benefits of the alliance when it comes to personnel.
“Staffing is challenging right now. Now we can work together with a larger staff and have more opportunity because there’s a lot of business we’re expecting to get. We now can cross-utilize our staff and make sure that everybody is busy. We’re very excited about it at Pinnacle,” Roginsky added.
Crandell reinforced the point and talked about the company’s recent expansion. “Our teams know each other already so the opportunity for them to work side-by-side is very exciting for folks on the CHM side as well. We’ve actually started hiring again since the pandemic. We were fortunate with the size of our asset management portfolio we didn’t lay anybody off during the pandemic; we kept our team together. We’ve actually brought in three entry-level people in the firm. We’re doing that because of the build-up in momentum we’re seeing,” he said.
Meanwhile, CHMWarnick has touted the ongoing development of its business intelligence platform and what that has meant during the past year, according to COO Chad Sorenson.
“We’ve spent [nearly] the past five years putting a lot of blood, sweat and tears and capital into developing our business intelligence system. It really has been a game changer in the way our team asset manages and being able to leverage that as we help our clients recover from COVID. We think it’s only going to separate us even further from others in the industry,” he said.
Sorenson further explained how that system would complement the partnership. “We apply that to Pinnacle’s business and it all of a sudden makes their lives much simpler when it comes to analyzing data and organizing data, which frees them up to play a role that’s more strategic to their clients. That really is the goal to leverage our expertise and not spend time on data entry and things of that nature,” stated Sorenson.