LOS ANGELES — The Kessler Collection's approach to hotel development is nothing if not unique, and executives say they are continuing to carve out novel new destinations and properties across the Southeast U.S.
Mark Kessler, president and chief operating officer, said the Orlando-based company has carved out a niche as a developer and operator of one-of-a-kind real estate projects with 12 hotels mostly scattered across Georgia, the Carolinas and Florida.
The company's biggest recent development is the Grand Bohemian Lodge Greenville in Greenville, South Carolina, that opened in September.
That hotel initially broke ground in 2019, and it was "designed to capture the architectural expression of a grand park lodge," according to the news release announcing its opening.
Kessler said what makes his company unique is the amount of energy, personality and emotion put into each project, which is one reason why the hotels are rarely sold.
"We get emotional about it with all we have invested in it," he said. "We're not really sellers. We're really investors and builders, which is why we put so much of our time and attention on quality. Sure, we could cut corners and cut costs out, but we don't. We invest in it like we're going to hold it forever."
They broke that trend with the August sale of The Mansion on Forsyth Park in Savannah, Georgia, for $52.5 million. Kessler said that's something still hard for some of the leadership team to digest because of their emotional investment in the property — which is in company founder Richard Kessler's hometown.
That hotel is something "you don't see everyday and you can't recreate," he said. "It was a hard decision because either we had to invest money into renovating it or we had to sell it. It was not an easy decision. They made several offers before we finally took it seriously."
Kessler said the development environment isn't ideal for new construction projects, such as the company's plans to build a luxury boutique hotel in New Bern, North Carolina — a city of slightly more than 30,000 people located on the Neuse River in the eastern portion of the state. The company announced the project more than a year ago, and he said it will be awhile before the numbers work on that sort of project.
"We're still working through construction and pricing," he said. "There's two big challenges. No. 1 is pricing — what's it going to cost to build this. Then the second challenge you've got now is just the lending environment. It's not a great environment we're in now. We've been talking to brokers and banks."
He said he expects financing to remain difficult for the next 12 to 18 months.
Still, the company remains committed to the New Bern project and is excited about its potential, he said. The company has already purchased the site and is working through the details on local government support.
"It's a beautiful building, great little town, and what we're working through there is just the pro forma, the investment side," he said.
Similarly, Kessler is working on a large, mixed-use development in Cashiers, North Carolina, a mountain town in rural Jackson County in the western portion of the state. The company has purchased a 25-acre plot with plans to break ground this year and a goal of opening by 2030.
In addition to a hotel, that development will include shopping, art spaces, residences, an event pavilion and glamping. It will be connected to the Ramble Greenway Trail and a 13.2-acre public park.
Kessler said he ultimately expects that to be a high-rated, high occupancy market once plans are fully realized.
"It will be our highest [average daily rate and revenue per available room] market, by far," he said.
But building up a destination from whole cloth is a significant hurdle.
"The challenge we'll have up there like you do in any seasonal market is the labor source," he said. "There's a very small population."
He said on the investment side, that project faces similar challenges to the New Bern development, but he believes the timing and the long scope of the project will work out in its favor.
"We've already got our financing in place for the infrastructure work, so by the time next year rolls around, we should be in a good environment," he said.