To hear Sam Grossman tell it, the hotel business really has nothing to do with real estate. In fact, adds the chairman of Grossman Properties, “The hotel business is actually an ongoing business operation that requires constant attention.”
Perhaps that’s why Grossman has a soft spot for hotels—it’s a passion he can nurture and to which he can devote constant attention, ultimately leaving his own mark.
Grossman displays this side through Classic Hotels & Resorts, the Phoenix-based hospitality management division of Grossman Properties, whose portfolio includes the Arizona Grand Resort, in Phoenix, plus the Inn at Laguna Beach and La Playa Carmel, both in California. All three hotels are well positioned to take advantage of the upturn following the downturn. “The leader in the pack right now is high end [properties],” Grossman says, pointing to positive signs in rate and occupancy growth.
For now, Grossman is content to focus on West Coast projects. The company recently completed multimillion-dollar renovations at the Inn at Laguna Beach and La Playa Carmel. Classic’s finest turn-around moment, arguably, was its 1992 acquisition of the Arizona Biltmore in Phoenix. Classic bought the 730-room resort for $62 million, spent $60 million on renovations, then sold it in 2000 for $350 million.
While the company has dipped its toes into waters off the West Coast—in the past having built two hotels in Dallas—the mode of growth today is in acquiring properties and, as Grossman tells it, prices have shot up.
“We are interested in acquiring properties with attractive pricing, but it’s difficult to find really good properties below replacement cost,” Gross- man says. In fact, he adds, prices are approaching 2006 and 2007 levels— then heady times for the hotel industry.
No matter the time, Grossman is a firm believer in hotels and real estate. “I’m often asked the question, ‘Is this a good time to be in real estate?’ “My answer: It’s always a good time to be in real estate.” classichotels.com.