Zeidel & Associates Quickly Negotiates Leases and Helps a Hospitality Disrupter Complete a Public Offering
Situation
Zeidel & Associates was retained by a startup hospitality disrupter whose goal is to be hipper than a traditional hotel and more reliable than an Airbnb. Its guest rooms are located in apartment units in residential buildings with amenities and services similar to traditional hotels but delivered through technology such as mobile apps. The company currently operates approximately 6,300 hotel units worldwide in more than 35 cities in 10 countries.
The firm was hired to negotiate leases with landlords in New York City (and elsewhere) that our client’s Deputy General Counsel found especially difficult to work with and felt that their other outside firms were not sophisticated enough to handle. We also were charged with expediting the closing of leasing transactions as the current speed was negatively impacting the company’s ability to meet its quarterly leasing goals for a public offering. It was also important to the client that its own tenant-friendly leases be signed rather than the landlords’ form leases.
Approach
Zeidel & Associates quickly got up to speed on ongoing negotiations, which were difficult for many reasons. The transactions were complex and involved all, or significant portions of, full buildings. Some of the properties were encumbered by an existing hotel manager, were new ground-up developments, or had been vacant for many years — each presenting its own unique challenges. Also, the client’s form lease was more tenant-friendly than New York City real estate developers were accustomed to and contained provisions that they were often unwilling to accept. There was also pressure to close deals by quarterly deadlines and other internal and external factors.
We moved full steam ahead on numerous lease negotiations simultaneously, dedicating significant resources to meet the aggressive quarterly deadlines. We used our familiarity with New York City real estate personalities and best practices, which our client lacked, to reach compromises on contentious issues. We also leveraged our construction and design expertise to close the gap on the many buildout issues on which the parties could not agree.
Result
The firm worked on more than 15 hotel leases in less than two years and helped our client successfully complete its public offering.