MIAMI—Good things come to those who wait. That’s real estate developer and investor Robert Finvarb’s business philosophy, at least when it comes to Robert Finvarb Companies (RFC), which focuses much of its efforts on long-term investing.
“I am the hardest worker in the business and lead by example,” said Robert Finvarb, CEO of RFC. “I wear my emotions on my sleeve, but that comes from having such a deep passion to succeed on every project that our company undertakes—but more than anything, my success is driven by the inspiration I feel every day to create a lasting legacy for my family.”
Initially, geographically, RFC focused on the real estate market in Florida; however, the management team quickly became aware of the cyclical nature of doing business in only one state. RFC expanded its portfolio nationally to diversify its market risk.
“We have sourced opportunities in resort destinations, locations that are dominated by government demand and markets that serve both medical and university campuses,” he said. “Our participation across these market segments allows us to play in various sandboxes that possess a wide range of demand generators, while achieving the common goal of long-term asset appreciation and stable cash flow.”
Over the years, instead of having its brand partners manage its properties, RFC has become more involved with day-to-day management. The company has also collaborated with several third-party management companies to jointly manage some of RFC’s assets. The company doesn’t provide third-party development or asset management services.
“We are uniquely positioned in the industry, as we maintain a very long-term view on our investments and primarily underwrite our deals upon the basis of cash flow and asset appreciation, rather than the traditionally shorter-term holding period that most of our competitors possess, given their need to recycle capital more frequently than us,” Finvarb said. “We have also recently completed several joint ventures with property owners, whereby such property owners have contributed their land to a partnership for the purpose of allowing for the development of a hotel with our company contributing equity, sourcing the debt, developing the project and managing the same.”
RFC developed select-service properties before evolving into a company known for investing in large-scale properties with mixed-use retail components in urban locations. Currently, the company is primarily focusing on developing, owning and operating properties in the top 25 MSAs in the United States. RFC’s management team also has a keen interest in university medical campus markets.
In its portfolio are 17 hotels, all owned by RFC. The portfolio contains a disproportionate number of assets in Florida, the majority of which are located in South Florida.
“We own three hotels in Miami Beach, another in Sunny Isles Beach (which is an affluent suburb of Miami Beach), and a hotel in Coconut Grove, which is an upscale section of Miami that is currently undergoing a significant revitalization,” he said. “We also own a hotel within the Miami Health District that primarily caters to the needs of the various medical facilities contained within the area, including the University of Miami Hospital, Bascom Palmer Eye Institute and Jackson Memorial Hospital.”
RFC also owns hotels on the campuses of Mayo Clinic in Phoenix; Duke University in Durham, NC; and Florida State University in Tallahassee, FL. It also owns a Courtyard by Marriott in Washington, DC, which is located adjacent to the NoMa Metro stop.
In the pipeline, RFC has a 264-room dual-branded AC/Element Hotel in the Brickell submarket of Miami, which is expected to break ground within the next nine months. At completion, the project itself will contain approximately 25,000 sq. ft. of retail space and be located across the street from Brickell City Centre, one of the city’s mixed-use projects. RFC also has a 154-room AC Hotel in Tallahassee, FL, in the works, which will include a significant rooftop bar and restaurant; the hotel is slated to open in Q1 2019. Additionally, the company is expected to reveal a mixed-use project adjacent to a university medical campus in the Midwest.
While RFC has experienced the same market fluctuations as most of its peers, its “long-term focus, conservative leverage strategy and judicious decision making” has protected the company from unexpected storms over the course of its 16-year existence, Finvarb said.
“I am proud to say we have never been late with a loan payment and have established a formidable reputation with a wide range of providers of both construction and permanent financing, which has been integral to our growth,” RFC’s CEO said. “We are also extremely fortunate to have an extensive network of equity sources that desire long-term cash flow and understand the variability associated with investing in hotels.”
To help with pricing decision strategies, RFC recently brought on a director of revenue management. Currently, the company is looking to make additional hires in its construction and development department.
“We are very protective of our corporate culture and will look to bring on someone who understands what it’s like to work in a family business,” he said. “I am involved in every facet of the business, and my wife and older children are also included in much of the decision-making. I take great pride in bringing on members to our team who understand they will be treated more like family than associates, and am proud to say that all of our executive hires since we started the business remain with the company and will hopefully continue to see their careers grow while being challenged.”
Over the next year or so, the company expects to develop between three and five additional hotels containing approximately 1,000 guestrooms, many of which will be part of larger mixed-use projects.
“We will also continue to grow our multifamily platform, which will surely entail applying many of the lessons that we have taken from our experience developing hotels and implementing the same into our projects, in terms of added amenities and services being provided to our residents from what has traditionally been the case in the residential sector,” Finvarb said. HB