LOS ANGELES—Majestic Hospitality Group, a turnkey development and consulting company based here, is heading into its 10th year and enjoying a wealth of domestic and international projects, both in hand and in the pipeline.
Included in the half-dozen hotel-development projects it has working are three in California: the Vecino Hotel in Dublin, The Ellison in Venice Beach and an upscale redevelopment in Palo Alto. It has a similar redevelopment in Reno-Sparks, NV. Also in the mix are The Lodge at Coleburn Distillery, an adaptive-reuse in Speyside, Scotland, and the Hemingway Island Resort at a site to be determined.
More hotel projects set for California include Tu Casa in Venice Beach, as well as an Unscripted by Dream Hotels property (location was not disclosed).
According to CEO Christopher Henry, Majestic is currently responsible for developing assets in excess of $300 million in aggregate with another $500 million worth of projects in the pipeline.
Henry founded the company with Zachary Lapidus just in front of the Great Recession in 2008. The impetus to get out of their “day jobs” in hospitality—Henry was at The Four Seasons Los Angeles, Lapidus at The Four Seasons Las Vegas (both were in the management training program and finishing college)—was a hotel development project in Bali that subsequently fell through as the economy tanked. The duo decided to go back to the daily grind but kept Majestic “breathing” via small projects.
“We saw there was a need in the industry,” recalled Henry, noting most development projects utilized “a couple of dozen different consultants, and our goal was to use more of a European model and do everything under one roof to provide our clients with a turnkey development provider.”
Lapidus remains involved with Majestic “peripherally,” said Henry, but also works for Dorchester Collection at The Beverly Hills Hotel.
The CEO said the company is fairly vertically integrated. “We offer everything in-house except for things that require licenses. So, we’re not an architecture firm, but we do conceptual design in-house. We’re not a licensed contractor but we do project and construction management. We also provide services very early on like site selection, feasibility studies, etc. We also have partner groups we work with that are those licensed entities. And if a client has a specific team member it wants us to work with, we’re more than happy; we’re not an everything or nothing firm.”
The firm typically works for capital groups, e.g., venture capital or family-office money, and landowners who want to do hotels but don’t have the expertise. In the past two years, Majestic Hospitality also has started working with hotel brands and getting involved in government development work.
An example of the latter is its Scotland project. Recruited by the Scottish government following connections made during ALIS, Majestic became equity partner in a deal to reinvent a historic distillery on 75 acres in the Highlands into a hotel. “It couldn’t be a more beautiful setting with an unbelievable amount of opportunity,” said the CEO.
He noted the company preference is to be a minority partner “if we’re going that route and it really depends on the group. Some groups hire us just to be a fee developer and others want us to have skin in the game.” Two of the six current projects are skin in for Majestic (Scotland and Palo Alto).
Majestic Hospitality also is a minority owner of recently launched Hemingway Hotels & Resorts, a licensed entity of the Ernest Hemingway Family Trust, which is developing its first property.
The unnamed Palo Alto project and The Vecino project in Northern California are both for owner/operator Concept Hotel Group. “They brought us on to be their developers and now we’re starting to look at partnering with them on more deals; it’s been a very good, positive relationship,” said Henry.
The Vecino, which is adjacent a tech company and near a BART station, is in the entitlement phase currently.
The Southern California projects, Tu Casa and The Ellison, “are really moving forward” in the high-barrier-to-entry Venice Beach market, where the properties “are steps from the beach,” said the CEO. He noted Tu Casa’s owners are looking to do a gut renovation on the existing property. “So we’re working with them to do concepting and preliminary design exercises. What can it be? What can’t it be? Do we want to tie it back into The Ellison and make one larger hotel? So, we’re looking at a couple of different scenarios.”
The Nevada project is a redevelopment of an existing Holiday Inn that Majestic is looking to reposition for a venture-capital group as it will be the closest full-service hotel to the new Tesla Gigafactory under construction at the Tahoe Reno Industrial Center in Sparks.
New and/or emerging markets hold the greatest appeal for the executive in terms of the projects Majestic looks to take on. “There are cities in the United States that are rediscovering themselves and being able to work in those environments where you can really push the envelope and set the standard really gets me excited,” said Henry. “Even for a place like Venice Beach. It’s a part of L.A. that has a lot of history and culture and went through a bit of its own depression, and now it’s taking off. There aren’t any really good, quality hotels in that area, so to be able to go in and have all of that legacy to play with, creates something special. For us, everything is story driven and experience driven.” HB