Hotelier Andrew Zobler is back in Miami.
The Sydell Group founder and CEO bought singer and songwriter Billy Joel’s Miami Beach home last year and is branding the NoMad Residences project in Wynwood. But despite buying the home, he didn’t relocate to Florida because Zobler says that he “always wants to spend a significant amount of time in New York.”
After developing the high-end Freehand hostel and Broken Shaker bar in Miami Beach (one of four Freehand properties Sydell sold to Generator Hotels’ parent Queensgate for $400 million in 2019), Zobler is working with Miami-based Related Group and David Edelstein’s Tricap on the NoMad condo building, where the brand will operate a rooftop bar and lounge.
Sydell made headlines when the firm and its partner in the NoMad hotel in New York, billionaire Ron Burkle, were in foreclosure. Sydell eventually exited its investment in that property, which Soho House took over and it’s now called The Ned. Now, Sydell has adaptive reuse projects in the works in Copenhagen, Vienna, New York and other major cities, on top of hotels it operates.
The Real Deal caught up with Zobler to talk about the hospitality market, his future projects and the implications of a recession.
How did the Wynwood deal come about?
I spent a lot of time looking around at different opportunities and Related came to us about Wynwood. And literally, I could walk to the site from my office.
I didn’t really want to do a project unless it could have the soul of a NoMad so it really couldn’t be just apartments and they ultimately agreed to let us do a very large NoMad bar on the roof. We’ve been very involved in the architecture. The units are coming furnished and the NoMad bar on the roof is going to be 180 seats with a big swimming pool and great views.
Will buyers be able to put their units in a rental program, like a hotel?
Not so much. People will be able to rent the units on their own.
You said you’re looking for other sites here. Have you found anything else?
We’re working on something ridiculously exciting in Miami. It’s a new build where we would create a special brand for the tower. It’s not signed, so I’m not going to say more than that.
Sources have told me that it’s very hard to build a hotel now without sellable residential, or some other component. Do you agree?
I think that that’s an overstatement. But there are certain sectors that are really hot. Resorts are booming. What’s hard to do is to build a luxury hotel in a major urban center without some additional bells and whistles. And I think it became significantly harder to do than it was over the last two months with interest rates rising. That’s caused a lot of lenders to sort of cut back on the availability of debt for hotels, especially for new hotels.
I know you had a NoMad in L.A. that you closed. Would you open another one there?
We would love to do something else. I lived in Los Angeles — twice — like all good New Yorkers. I think downtown L.A. is the trickiest market. We went there originally because it was the place to go. We had a building stock for buildings that kind of looked and felt like potential NoMads, and a lot of the rest of LA is newish.
How about Texas?
I love Austin as a market. I think Fort Worth is really cool. We looked at something there with [billionaire developer] Ed Bass and his wife, Sasha and continue to have a dialogue with them.
How’s the hospitality market doing? Any major weaknesses?
The biggest place I see an opportunity is, a lot of hotels have significant meeting space, but not a huge amount of meeting space. And those hotels are a little bit like dinosaurs, because that kind of meeting space is no longer being utilized in the same way, or to the same degree, that it was pre-Covid. So what do you do with those hotels?
We’re working on a project in New York — a 700-room hotel that had material meeting space, but not huge. So we’re looking at putting in a cabaret and a great restaurant, some other nightlife and just making it more attractive as a transient hotel.
Where you’ve seen the business travel for meetings go down, you’ve seen transient travel go up, because people can work from anywhere. Weekends are turning into four days instead of two days. And so I think figuring out how to change those [properties] to be more interesting to the transient traveler is something really interesting for me. We’re doing it here in New York first, and I think we would love to take it on the road.
Are you worried at all about people spending less and traveling less in a recession?
Look, I worry about everything, but I think that you can’t or shouldn’t make your investment decisions based upon the short term. The hotel is a challenging business and a super interesting business because you change the rent every day. So if you don’t have the wherewithal to survive a dip, you’re in the wrong business.
This interview has been edited and condensed for clarity.