AJ Capital President Optimistic About University Town Hotel Demand

NASHVILLE, Tenn. — Universities breed innovative thinking, which was paramount for companies running hotels in university towns during the COVID-19 lockdowns of 2020.

Lockdowns and other pandemic-based restrictions forced AJ Capital Partners, which owns Nashville, Tennessee-based Graduate Hotels, to trust its business plan while seeking ways to reorganize and push forward.

“The Graduate Hotels business plan was built around the downside protection inherent in universities,” AJ Capital President Eric Hassberger told HNN in a video interview filmed at the 2021 Hotel Data Conference. “We were delivering six, seven hotels a year — the numbers were great and everything was looking really good, and then COVID hit and every university closed, which means our hotels closed as well.”

Hassberger said the company took that downtime to “rethink everything.”

“We converted a part of our hotels to student housing, which was a great income driver that we didn’t have before, and we really deepened the relationships with our university communities,” he said. “We were growing really fast. So this gave us an opportunity to look at our staffing model, look at our operating structure, really look at everything soup to nuts.”

Now as universities across the U.S. reopen this fall, Hassberger said he has more faith than ever before in Graduate’s business plan.

Graduate Hotels has 32 hotels open in university towns, primarily in the U.S. but including recent openings in Oxford and Cambridge, United Kingdom. The boutique-minded hotels draw on a quirky mix of high-end amenities, such as rooftop bars and locally inspired restaurants, coupled with academic-chic design.

The brand is part of AJ Capital Partners, which develops, owns and operates real estate across the country with that same localized approach.

“What we do is different,” Hassberger said. “We try to deliver products that we would like to utilize. From our office to our multifamily to our hotels, we deliver space and design space that we think the people in our organization would love to spend time in, and we build it for the people in the communities.”

For example, the company is working on two projects in Nashville’s Wedgewood Houston neighborhood, combining adaptive re-use of an historic sock mill building with ground-up timber development to create mixed-use spaces for office, residential and retail.

Most recently on the Graduate Hotels front, the company opened Graduate Roosevelt Island on the Cornell Tech campus, overlooking Manhattan and Queens from Roosevelt Island.

“We want to bring hospitality and infuse that idealism and personality into every project we do,” Hassberger said.

The company is also working on Graduate Hotels in Dallas; Palo Alto, California; and Princeton, New Jersey.

But for now, college football season in the U.S. is reminding Hassberger just how resilient university towns can be.

“Our weekends are off the charts; they’re ahead of 2019 in most instances,” he said. “When we see people interact with our spaces, with our restaurants, our rooftop bars … they’re just thrilled to be back and to be seeing people. And so being a part of that is amazing.”

For more from HNN's conversation with AJ Capital Partners’ Eric Hassberger, watch the video above.