Josh Ramsey: Good to see you, Jemel.

Jemel Jones: Same here, Josh. Same here, man.

Josh Ramsey: You’ve got a lot going on right now.

Jemel Jones: I do. I really do, Josh. Yeah.

Josh Ramsey: I would love to, hear what is on your plate at the moment. What does life look like for you?

Jemel Jones: Well, busy, Phoenix American hospitality right now has we had an opportunity over the last two years to be able to reset ourselves with our current assets that we own and allow ourselves the ability to be able to create more value with those assets as the markets got better after the pandemic.

And so, by doing so, We decided to take this opportunity to grow and so growth means for us is that our current 11 hotels that we owned, we’re also focusing on bringing on an additional 4 hotels. We’re actually in the stages of due diligence right now, bringing on 4 new hotels. And with that comes the ability to create more value for our investors as we continue to sustain ourselves [00:01:00] with the 11 that we have.

The goal by the end of the year, Josh is to be somewhere around the 18 to 20 mark with hotels. And then our longterm growth strategy is to add an additional. Two to three hotels a year as we go forward,

 One of the things I’m trying to do in these conversations is unpack the business of hotels because it, I think it’s a mystery to some folks of how hotels work. A lot of this stuff works. And I think for example, one is, the hotel name itself, a Hilton, a lot of people think all of those are owned by Hilton or

Josh Ramsey: by the brand. But then you realize, okay, someone else owns that specific asset and then is paying the brand. So there’s an owner. And then there’s someone that’s probably managing that hotel, maybe a different company. What I’d love to unpack a little bit with you right now is this, within ownership there’s these kind of individual owners and [00:02:00] individual owner operators then they grow a little bit or that sometimes they’re part of a larger group of like a real estate investment trust. And so I had left to like, maybe if you could explain some of that, like just the different views of ownership and where you’ve, where you fit in that.

Jemel Jones: Yeah. And that’s a very interesting question. And we can talk for years and times and minutes about this, but I’m just going to just give you the shorter version. I mean, there are various different types of real estate hotel owners out there. There is the the individual hotel owner operator who who takes his own assets, if you will, a cash, a capital within his family or money handed down to them and then create their own ownership piece.

Obviously they have the ability to be a part of a large brand like a Hilton or a Marriott, or they can create what is an independent brand for themselves. You have the. The group that’s that creates a real [00:03:00] estate investment trust funds for people to invest in those funds and get returns and work with a third party management company to be able to manage those assets.

And those particular individuals manage just the funds. And then you also have. Fund managers who have the ability to create funds as well, but then again, be able to create an additional operating arm to operate those particular funds, which is what we fall into that particular category.

 We actually manage funds, but we also have our own operating. Arm to operate hotels under brands like Hilton and Marriott and Hyatt. And we do that because we like to sell the understanding of people that we have been in the business combined over 200 years based off of our team.

And we have the ability to create value. For those particular funds or those assets that are in those funds going through the process. So, there, there are a, there are several different types of owner models when it comes to hotels. And [00:04:00] then on the management side, Josh, you can either opt to manage those yourselves based off your experience, or you can go to a third party management company, which is what I probably would say.

If you looked at our country right now, I’d probably say we’re probably 60, 40. 60 percent of owner operators and 40 percent is a third party managers. Don’t quote me on that, but I do know that there are a lot more. Individual owner operators out there than there are third party management companies managing for those particular owners.

Josh Ramsey: Yeah and so that’s probably a whole other conversation I’d love to dive into sometime, like,

Jemel Jones: it is.

Josh Ramsey: companies, because there’s that’s fascinating on it in itself, right? It’s like, okay, you own this property now I’m going to, , as the management company handle. The operations and the performance and take a cut of the revenue and a percentage of the profit if we hit certain me metrics.

Jemel Jones: And Josh, there’s also relationships out there with third party management companies, with individual owners, with third party manager gives what is called sliver [00:05:00] equity into the actual. Investment themselves and they own a piece of it as well as managers.

So there’s all different types of models that fall within this, that the hotel business or the hotel real estate portion of hotels.

Josh Ramsey: . So on the owner side, you said that the way that you handle it at Phoenix American is you create a fund for a specific grouping of hotels you’ve got four right now that you’re working on and going through due diligence on then that’s its own fund that you’re reaching out to your investors and others to invest into that specific fund.

Jemel Jones: That’s correct.

Josh Ramsey: and then you’re taking that capital and deploying that to purchase and run those properties.

Jemel Jones: Correct. Correct.

And in some cases, Josh, that, the four that we’re actually doing due diligence on right now it could be more, the more capital we raise, obviously we can get more assets, but again, we don’t just go grab [00:06:00] hotels just to grab them. There’s a formula that we use. There’s a metric that we use to do that.

And so these four that we’re doing is we call them four packs. That’s the kind of the terminology we use in our business. And right now we feel the. The money that the capital that could be used for these assets and the value that could be created over a three to five year period with these particular assets, we just see the value in doing that now again, if we’re not going to close this fun till, maybe September, October.

And if we raise additional capital and we see other opportunity, we’ll deploy that capital to other real estate assets, hotel assets that are out there. If we see. Value in them.

Josh Ramsey: Got it and the way that model works for an investor In this environment, if an investor is putting money into a fund, , how does that work? They’re getting, I would assume, paid out on distributions of the profit and then they’re also getting, do they get depreciation as

Jemel Jones: So, so that, that’s a great question. And so the model is pretty simple. So you know, as a [00:07:00] investor, you’re actually purchasing shares of a particular hotel or the hotels that are in that fund.

In return we create, we give you distributions. a percentage of your money. It’s, it averages out to almost a 1 percent return on a monthly basis, but 12 percent return is the goal on a quarterly basis.

I mean, on an annual basis quarterly, we do bonus distributions where at the end of the quarter, all the additional. Profit from the, I we dispersed that into anywhere up to 6%. It’s not always 6%, it just depends on what the number is. But again, all that averages out annually to an investor to 12 percent returns.

And so basically when we go to sell the hotel not only will they receive. The proceeds from the sales, they’ll also receive their initial money back that they gave when they invested

plus all of the returns that they’ve gotten on a monthly basis, along with the addition of quarterly distributions as well

Josh Ramsey: Got it. And so the 12 percent is the goal [00:08:00] for annualized return without even looking at the sale of,

Jemel Jones: Without even,

that’s exactly right.

That’s exactly

Josh Ramsey: Is there anything you can share on that? Like as far as what kind of annualized return do people often see, or have you seen on your side what, including the sale of an asset at the end of the cycle?

Jemel Jones: well, that’s a good question. The assets that we’re currently sitting on, we’re like in a new beginning of those particular assets. The goal is to be able to hold them for 5 years. So we haven’t really seen anything for any sales proceeds. But right now the last fund that we had paid on an annual return of 12%.

They’ve seen quarterly bonuses of six percent. I mean, it’s been very successful. We do webinars on a quarter on a monthly basis. And we talk about some of the same stuff we’re talking about right now. We really get detailed into what we’re doing so that people can understand what those returns.

We have a team of people. who, we get a lot of specific questions, Josh, like, if I gave you X, how much would I get? And why?

We [00:09:00] have people that answer those questions on the call with you

because they’re specific formulas for the amount of money. The minimum investment is 5000.

And then, if you’re at 100, 000, That’s a big number for me. So I couldn’t calculate that right now, but we have a team of individuals

that can do that for you during that time. But yeah, as far as sales, we’ve not sold any of the assets yet. And so we don’t really give a number, but the projections are this guys, when we buy assets, we buy them at a discounted price point.

And so because of that, when we get ready to go sell them, we create value so that sales, that value increases, of course, the property itself is going to appreciate, but we also create value at the NOI level to help it, to help that growth in terms of the sales price as well.

Josh Ramsey: Yeah. Okay. And so as a shareholder of that fund, you’re owning a piece of that. And so you would also see the value of the depreciation of the real estate as

Jemel Jones: Absolutely. Yes, you will. Yes. Yes, you will. Good question.

Josh Ramsey: A lot of these funds I see are like, you must be [00:10:00] an accredited investor and also minimum check size, 100, 000.

How do you all handle the minimum investment of 5, 000? That seems like a lot more paperwork or something.

Jemel Jones: That’s a good question. So, we are operating under what is called a reggae.

Whereas a reggae, you don’t have to necessarily be an accredited investor. Like if you was in a reg D, then yes, that’d be different. And we did that part of the world where we actually did investments to institutional investors.

Now we because of the reggae and the reggae was created back in 2015 under the Jobs Act that President Obama signed. And so it allowed us to be able to market to individuals that wanted to invest in real estate. And so by us taking a part of that. Yeah, you’re right. I mean, we actually started off, Josh, at a minimum of five hundred dollars when we first started this particular new model.

It started off at five hundred dollars and because we. We saw a lot of success from that. We moved the carrot a little bit up to [00:11:00] 5, 000 And yes, it is a lot to manage. But we’ve seen our investment pool grow from 2, 000 to almost 4, 500 investors because of that. And I think the average investment don’t quote me on this, but I think we’re anywhere between 50 to 75, 000 in average investments that we’re seeing.

Josh Ramsey: Okay. Yeah, that’s really fascinating. So, Is that, a lot of compliance kind of stuff Is Reg A, like, a certification that you have to get as a company?

Jemel Jones: Yeah. So, I mean, just the sec compliant, we have to follow all the sec guidelines and those types of things. And so if you read our circular, you’ll be able to see all the different things that we had to go to be able to do that. So yeah, there is some compliance stuff we had to go through to get there.

Josh Ramsey: Okay, wow. Yeah that’s really interesting.

Jemel Jones: Yeah, it is.

It’s a whole world.

Josh Ramsey: Yeah. Yeah. I’d love to just back up a little bit and just hear a bit more of your story. Right. So currently you’re chief operating officer at Phoenix American. Is

Jemel Jones: [00:12:00] Yes, that’s right.

Josh Ramsey: So I, how did you get started in the hotel business? What did that look like and how did you end up here?

Jemel Jones: So I took a very long journey. So let’s start by saying I’m 25 years old and I’ve been in the business for 34 years. Okay. So you do the math on that but no, honestly I, when I graduated from high school I a friend of mine. mother had asked me, what are you going to do for the summer before you go to the college?

And I said, I’m not quite sure I was a baseball player. And I said, I’m not quite sure I’m just gonna work out and then, let the chips fall where they may. And she recommended, she said, Hey, look, why don’t you go downtown? I’m from New Orleans. That’s my home. And she said, Why don’t you go downtown and and see if there are jobs available for parking cars.

And I said, you know what? That’s a good idea. I’ll go do that. So I go downtown New Orleans and at this time in New Orleans, this is when every hotel downtown had valley parking and I applied for a job with a particular company as a valet Parker. And when I got that [00:13:00] job right before I went to college, I worked that job in the summer and as a young 18 year old Going to college, seeing cash in my pocket every single minute of the day.

It resonated with me every summer when I went home. So fast track to my sophomore year in college, I go home for the summer once more, but this time I’m actually parking cars, Josh, and I’m looking inside the hotel. And I’m looking at the front desk and I’m looking through this and I remember this like yesterday.

And so that’s why it’s so easy for me to tell this story. I’m looking through the window of the hotel and a couple of things was on my mind. One, I was parking cars for the Sheraton downtown New Orleans, and we also had a Sheraton in Baton Rouge, Louisiana, which is where I went to school at, which was Southern University in Baton Rouge.

And one day this was back when the general managers used to actually live in the hotel. And [00:14:00] this general manager of this Sheraton would walk down at a particular time every day and he would walk to his car in the garage. And of course, me being a valet Parker, I saw the guy every day I spoke to him.

I said, hello. And this particular day I said, Hey, I said, my name is Jemel Jones. And I said I’d like to work inside the hotel at the front desk. I said, there is a Sheraton in Baton Rouge, and I really don’t want to keep coming home in the summer for college. Cause I want to finish faster. And I said, is it possible you can write me a recommendation letter?

Now, back in the day, nobody walked up to a general manager, Josh. I mean, that just wasn’t heard of, right? He’s the ultimate, the manager of the entire asset itself. And here I am just this outside guy, parking cars, running back and forth, parking cars. And to make a long story short he told me, he said, when you get off work, He said, come stop by my office.

And I walk up to the office and the secretary in the hotel or the administrative assistant is hotel. I walk up and I said, Hey, he asked me to come to his office and she pulls out this letter and [00:15:00] she gives it to me and she said, here’s the letter you’ll need. And that’s how I started working in the hotel.

I started at the front desk in my sophomore year of college graduated from college and wind up getting into management working in operations for probably, I would say the next. six or seven years. And then getting up to, in all my career, most of it was in New Orleans. And I got to the point to where I had a choice to make, do I want to stay in operations or do I want to learn this new discipline called revenue management? And operations was great, but revenue management just really seemed like a really cool thing to learn at that time. And so I wound up working in the early two thousands in the revenue management discipline for like the next four years of my career. And brought me to the corporate office of Hilton in the RMCC.

It was like one of the first groups that was actually in there stayed there for a couple of years and then immediately branched out to the [00:16:00] Hilton Garden Inn brand as the regional director of brand performance for the Hilton Garden Inn. And I was pegged for that job because I was given an opportunity to utilize both my revenue management skillset.

And my operation skill set and that introduced me to the world of ownership.

What owners do the relationships they have with the brands, their expectations of what the brands bring to the table for them to create value for their hotels. I spent. Seven years with the Hilton garden in brand allowing me the opportunity to understand the expectation of owners, the expectation of the brand, and then how both of those two models worked with each other and created value for not only just the brands and the hotel owners, but for customers,

for our customers that we service.

So,

That was probably, I would say the high point of Where do I want it? Where do I see myself? You always say that where I see myself at in five years.

I think that was the high point of where I saw myself at in five years. [00:17:00] And after that, my, my kids were entering high school and I wanted an opportunity to spend some time with them.

So, so I, the brand kept me on the road. I traveled all the time, went here, went there. And so I had an opportunity to step down from and I did that. And I went back to being a general manager. Opening up a new hotel living in Dallas and opening up a new hotel. Here’s the cool thing about that.

I got to work side by side with an owner, use my brand knowledge to help that hotel owner develop his particular asset from the inception of him doing a renovation of it to all the way to opening it. And that wasn’t just a job, right, Josh, that was an opportunity for me to, again, Understand through the eyes of an individual owner was not operating.

He was using third party management operation, and it helped me to understand what some of the goals and expectations of that owner was. And then the goal of the third party management company. And then now the brand. So now I went from two models to I’m looking at the eyes of three [00:18:00] models.

And once I got to a point to where I feel like I had achieved that I joined PAH I actually joined this company as a regional director of operations, getting back on the management side, but there is a little bit of a caveat and the caveat is this.

When I joined PAH, PAH was not just. A hotel management company. PAH was an owner operator. PAH was a model that I had not been familiar with because remember the models I worked under was the brand. The model I worked under was a management company and the model I worked with was with an owner.

Now this PAH model, which was an owner operator was a little bit different. And I got to work in it before the pandemic, which allowed me the ability to kind of branch myself out. Went from a regional director of operation to a vice president of asset management from a vice president of asset management to the executive vice president of asset management.

And then the COO role put me in that role to restart the management company [00:19:00] structure again for the hotel ownership, which brings me here today. So I’m basically at grassroots. We obviously. During the pandemic, most people may not know this, but we had a JV relationship. So we third partied a portion of our assets out which allowed me to do the asset management portion of the job.

And then after working with our investors and working with our CEO. We decided that we needed to enter back into the hotel management phase. And so I restarted that probably at the end of 2021, early 2022. And then now we’re here building more assets that we’re managing on our own. And that’s my story.

Josh is really boring.

Josh Ramsey: Ha! No, I think, You’ve got a lot of interesting stuff there. Something I find interesting about this is the stories of people that start at the ground floor, getting hooked on the business, there is something special about what you can do in hospitality and how you have a chance to serve others and make others, other [00:20:00] people’s lives better. And I think it’s also, such an interesting industry because of the ability to have this wandering path of working your way from, valeting cars to becoming a chief operating officer, right? And not making light of your story at all. With each one You learned a new skill you discovered new ways to create value and then you took that skill and stacked it with the next one and then understood the value of the brand and stacked that skill with the next one of, okay, what really matters to an owner now that I work for one directly?

 That brand performance job living in the tension of the value that a brand can create and what a brand needs to perform well. And then the value that an owner can create and what a owner needs. There’s tension there. And like living in the middle of those two things to find how to make both work well together, I think is is such a superpower,

Jemel Jones: not to mention the personality crisis I [00:21:00] had to go through right being on a various different side, but I’ll be remiss to take this opportunity not to say thank you to a lot of the people that have given me the opportunity over my career to do that because I didn’t when I was Valley parking cars, I went to undergrad in college to be an attorney.

That was my focus. I wanted to be an attorney. And in reality I was given an opportunity at each step to increase my career in this business. What I was passionate about the most in the hotel business was the various different personalities that I’ve met throughout building relationships with different people.

And that was a big deal for me. And I think the other thing is, when I talk about personalities is where I look, where I’m at today My ability to be COO of an owner operator company really enhances my relationships with the brands because I understand what the, what these hotel brands expect.

And I try my best to bring that to the hotels themselves. Now [00:22:00] obviously every hotel brand. Has a goal of creating more, whether it’s supply, whether it’s whether it’s offering their customers more and so at some particular point in time from a personality standpoint, they can impact us as owners.

Right. But I think because I understand the why in that model and those relationships, Josh, it makes my job a little bit more easier

to be able to maneuver around some of the things that take place.

Josh Ramsey: Yeah. A great point. What’s something that maybe you have a counterintuitive approach about when it comes to the way you think about your career? Yeah.

Jemel Jones: understand where people are who are leading our hotels., I’ve been in their shoes, so I totally have the ability to be Focus on what it is that are their challenges and what they’re looking for.

So that’s one piece of the pie. The other thing is that I understand creating [00:23:00] value for my investors at the same time. So I have to do all that through other people and I have to take and empathize with those other people, the things they’re dealing with. to get some of those things across.

So I think what I bring to the table and that’s a great question, josh. But I think and I could talk about it forever. But I think what I really bring to the table is the uniqueness of, being in the hotel operator shoes, being in the owner’s shoes and understanding the expectation of The investors at the same time and making all three of those dichotomies, just that model work itself taking pressure off of one and the other.

And I think it doesn’t help like when we have these these storms and stuff that pop up, but it doesn’t matter. I think at the end of the day, I’m unique because I have the ability to be, to attract all three of those particular audiences and get their attention and help them understand.

what direction we need to go in to be successful.

Josh Ramsey: Yeah. Can I offer one as well?

Cause I, I observe you, right? Like I getting to work with you I see this skill that you have of if you were to [00:24:00] break down your ability with relationships is the relationship at all levels, right?

So, you’re building trust with. Your partners, the owner, the fund manager, right? Every, everybody on your team in a way that is, I care about you. I want to help you succeed. And the other piece that I think some, sometimes people will go on one side or the other, right? Which is. overly accommodating on the care side where they, maybe they don’t then hold standards,

Right.

And I think you do a great job of holding those standards and continuing to push and be strong and push in a way that is pulling the best out of people and challenging those people. It’s not just about it’s not just about listening to what the, what each person wants. It’s about how do I challenge each of us to be at our best?

And I see you doing [00:25:00] that on a regular basis. And I think that’s like a very kind of special attribute that you

Jemel Jones: Thank you. Thank you, Josh. I appreciate that. I, you said that I actually was on a call this morning. Really good friend of mine, we do these calls every once in a while, month or quarter, and we talk about things and that was something that, he mentioned, he said, every year I’ve been knowing you for a very long time.

And he said, the one thing I can tell you, you hold people accountable, but you do it to get the best out of them. And I think I, I get that actually from my dad. My dad’s he’s always held me and my brother to a certain standard. And he does it to get the best out of us. And I just have that unique characteristic and I appreciate for sharing that cause I won’t go around saying that to people, but I appreciate you sharing that with me.

So

Josh Ramsey: Yeah. In asking a question of what do you do differently? It’s hard to sometimes brag about yourself in that way, but that is something I see that you do differently. And the other part that I’m thinking about is every time that, a new deal is happening there’s so much, within this [00:26:00] business and your business of a new acquisition or a change of structure or like you said, storms happening, whether it’s a literal storm or it’s just life in general, there’s like big stuff going on that you’ve got this ability to stay calm and focused and optimistic solutions oriented and remain unaffected. By the turmoil. Which I think is this leadership skill that oftentimes doesn’t get discussed.

Jemel Jones: That’s a good point, Josh. Yeah. It’s a learned behavior. Our CEO, perch Nelson. He’s perfect at it. I gotta tell you, when I say perfect, he’s mastered the ability . All those things you talked about, whether it be money issues or whether it be storm issues like physical storms or whether it just be personal issues he’s been good enough to should lead by example on that. And so I’m the type of guy that I’m loyal to strategy, right? So if you bring strategy to the table and I see that’s going [00:27:00] to benefit everybody else, I’m going to fall right in line with that.

And so I tell you that behavior is learned as well, because in our climate, you have to be calm.

Just the other day, I was at the Marriott conference, the owners conference, and I had a guy we were talking about how cyclical our business is, right? How we’ve been through so much. I mean, obviously, I’ve been in the business for 30 something years. So there’s several different storms I’ve been through.

Right. And. At the end of the day, you have to have some type of ability to remain calm because you’re going to go through something. You just don’t know what it is. and my goal as the chief operating officer is to have everybody prepared.

And so I can’t have everybody prepared if I’m from here that I do have on my head.

So I try to remain focused on that. So you’re right, Josh, that’s a skill set that, that, I take that very seriously. We get better at, because I want everybody to understand that at the end of the tunnel, there’s light.

Josh Ramsey: Yeah?

Yeah. That’s right. I love that. Let’s switch gears a little bit here. You touched on this earlier about this idea [00:28:00] of there is a need for where you sit and where you live. In terms of your company in value creation, right?

Like that you can, because of the work that you will do, you can purchase an asset, hopefully at a good value, but that when you get involved, you’re going to. Start pulling levers and actually create value.

And I’d love for you to just explain a little bit more of that.

Like what are some of those components that, that you’re doing that would then unpack that value?

Jemel Jones: That’s a good. That’s a great question, Josh. And of course, guys, like you are part of stuff like that of what I do. And the biggest thing is that when we’re looking for assets we do.

Look for hotels that are positioned in markets with value. That’s untapped by that particular hotel. And what I mean by that is some of the hotels that we may go out and purchase may have opportunity that they’re leaving on the table, not [00:29:00] just from a sales side, but it could also just be from the product itself.

Obviously because we’re acquiring assets, we look for minimal cost to deploy capital into the hotels themselves, but we always know that there’s capital that need to be deployed. So the first thing is, does the property have the physical attributes to attract more business to the hotels?

Meaning for those of you in layman’s terms, do they need a product improvement plan and what does that product improvement plan look like? And where is it going to have the hotel in terms of creating more value? Now, what type of value bringing more customers to the hotel, a customer base that they don’t have.

So we start by where is this hotel position on the star report, the Smith travel research report within their comp set. And what opportunities are they leaving on the table because of the 1st thing, the product improvement plan, so once we get that under control, the 2nd created value, is pricing.

How is this hotel position in the market from a pricing standpoint? [00:30:00] Are they creating value there? Are they too high? Are they too low? What are we seeing in the market? Are they touching every segment that’s operating in the market? Some hotels, we like to buy hotels in suburban high business corporate environments.

Simply because the more corporate demand the better opportunity you see to be able to pick up more or additional companies that you have not touched or tapped into. And so again again, it’s just what type of brand is it? What type of hotel is it? Is the product good enough to be able to attract a different corporate customer?

All that happens in number two. Number three is what is the hotel spending in terms of cost to manage the hotel? Are they overspending on product? Is there an opportunity to streamline some of the cost aspects? Are they aggressive with hiring labor and not using contract labor? All of that impacts the actual profit margins of the hotel.

Where do we see opportunity with that? I think a lot of people look at hotels and [00:31:00] they say to themselves. Oh, they’re using contract labor So if I go on the market, i’m going to do the same thing Not necessarily it really depends on your culture and how you how aggressively you go after recruits We like to recruit our own people into the hotel.

So that would be number three. Number three is just the cost aspect of it. And we don’t just look at, the labor. We don’t just look at, how much they’re spending on supplies. We also look at, how the tax is affecting the hotel. How is the insurance affecting the hotel?

Are there lease agreements that the hotel doesn’t need? All those things Impact the dollar. And so we make sure that we’re controlling that. And the last piece of the puzzle is that at the end of the day what other areas of the market are not being leveraged. The relationships we build relationships with the city.

We build relationships with the seat, with the CBB convention and visitor Bureau, because those relationships leverage more value for customers coming into your particular hotel. And we do that, Josh, with the expectation of including that information into our [00:32:00] underwriting.

 We’ll do a first blush, right? And we’ll look at this thing, and we’ll take a step back and we’ll say to ourselves, okay, at the end of the day, while we’re doing this thing, are all these pieces that just draw to Josh is all that doable in this market? And if those boxes, all those boxes aren’t checked off, we take that underwriting and we put it on the side and we say, you know what, we’re going to come back to that and take a look at that.

But all of those things, that’s our value creation. Josh, we look at ways to increase occupancy, ADR. Peel the better product for the brand and for the customer, is the hotel position correctly into the market and not just from a not just from a marketable on paper in the internet standpoint, but even like where it’s located on the street, is it on the highway?

Is it tucked away in some mall or is it next to our hospital? And it’s it, all those things play a factor in value creation.

Josh Ramsey: How does that process work? Do you get like a feasibility study done by an outside firm if you’re looking at a deal how do you start that [00:33:00] process?

Jemel Jones: so we do have a relationship with co star. We do utilize the information from co star to create our own feasibility. The only time we probably would do feasibilities. If we’re not familiar with the market at all obviously, we have 200 years of combined experience in this office.

So, I have. Our vice president of sales, who’s has been around the country in the world doing sales. And obviously our my, my regional director of operations, he’s been around the country doing operations. And we kind of leverage those individuals first before we feel like we, if we go into a market, we don’t know anything about Josh and we’ll probably go get a feasibility done for us to figure that out.

That’s a great question.

Josh Ramsey: Would a hotel hand you a packet of like, here’s our performance currently, like, here’s what a mix of sales looks like.

Jemel Jones: So once we feel good with our underwriting what we typically will do is do a LOI to purchase the hotel.

And then once we enter into that contract and earnest money is given and due diligence start, then we will begin to grab the information. So. To answer your [00:34:00] question, your original question, because that was a great question, but they’re answering the original question.

The data that we really use and go off of is the star report before we even get to that phase.

The star report gives us enough information about the market, but we also have CoStar and CoStar allows the ability to look at the market, even in a deeper perspective without us even physically being there.

Josh Ramsey: Got it. So with the Star report you are seeing okay, specific days that possibly they’re underperforming. You see what hotels they have in their competitive set, and if that really makes sense or not.

Jemel Jones: And

through the phase of you doing the underwriting, the financial packet is shared. So you’re able to get T12s.

Josh Ramsey: Okay.

Jemel Jones: Depending on , how much information to the T 12. I mean, of course we have to do non disclosures. So we signed nine disclosures to get the information.

And then once we get the information, it helps us put a picture together of what’s being left on the table.

 Yeah, I think that’s really interesting. So those four things really cover all of the stuff, right? Like, do we need to do anything to change the product to make it perform [00:35:00] better?

Josh Ramsey: , what are the levers that we can do in terms of pricing and positioning to make sure it’s performing well? Then it’s going to profitability of like, what are the levers that we can pull to become more cost effective and still be aligned with our culture and who we are as a company and drive long term value and performance. What are these other kind of potential things in the market that we can leverage, like you said, convention visitors bureau and, These other funnels that could drive new demand

into that hotel.

Jemel Jones: And what that looks like from a number standpoint. When we’re doing our performer and we’re doing our underwriting we have an equity yield that we look for in the first year. And that number is typically around the 10 or 11 percent number. And if we don’t see ourselves achieving that then we go to the table.

Our acquisition teams, we go and we discuss and say, Hey, look, why are we not able to hit these yield numbers that we’re looking for? And then discussions begin and we start [00:36:00] bullet point in those things right now.

I was actually talking to an individual the other day who was asking me how things were going with the four pack and I was letting them know, Hey, look, we got a meeting on next Friday with the acquisitions team to determine.

What type of opportunity if we missed the yield in the first year, what is our opportunity for making those things up? So we’re very, we have calculated numbers and processes and metrics that we use, but the big picture is the four you just went over. That’s how we create value. And if we can’t create that, then we’ll move away from the deal.

 Josh, we have to have three out of those four boxes check before we move on.

Josh Ramsey: Yeah. And I like those as building blocks too. Right. Cause it’s like, if you don’t fix the product, then you can’t get the right pricing.

Once you get the right pricing, then it’s a question about profitability. And then it’s about feeding in more business, but

like solve those other three things first.

Cause , if you start driving new demand, it may not convert if you don’t have their product fixed or the pricing fixed. But once you get those first three fixed, , [00:37:00] Once you turn on the faucet of new demand, then you’re driving all of that revenue at a much higher profitability as

Jemel Jones: Absolutely. Absolutely. I agree. And that’s, Again, without that formula for us it just doesn’t work.

 I’ll give you an example. We’re in Dallas, Texas. We own no assets in Texas and it’s not because we don’t want to own assets in Texas.

It’s just that the ones we put through those check boxes that we just talked about, , we haven’t been able to get three or four, four out of four yet. Doesn’t mean anything’s wrong with Texas. It’s just our model and it’s our, it’s just how we create value for our investors.

I think we’re going to want to find anyone, but again, we, you have, we have to go through those check

Josh Ramsey: Yeah. I love that. That’s something I heard from, when I was talking to Sager at Witness Investments, he said, an important part of all of this is knowing what your swim lane is and knowing what your principles are as a company and having that [00:38:00] rubric so that you really. As deals come through, even if it does look like a great opportunity if it doesn’t fit our specific criteria as a company, we’re going to pass, we’re, we need to stay focused on what we know and what we’re good at.

And that doesn’t mean there aren’t other great things out there. It’s just, this is what, this is our lane and this is how we can really add value right now.

Jemel Jones: That’s exactly right. That’s exactly right.

Josh Ramsey: I love that. You Well, what else do you want to talk about?

Jemel Jones: I, we could be here all day. I think you asked some really good questions. I’m, I love talking to you.

A lot of people don’t know Josh is a brain. I pick I pick his brain every now and again, but he knows so much. So I try to stay away from it because it’s a big crystal ball.

Josh I thank you a lot. I appreciate the opportunity to be able to come and tell who we are, who I am, and and what we bring to the table. We’re very serious about what we do here at Phoenix American hospitality. And I think the only thing I do want to leave you with and everybody is that out [00:39:00] of all the models I’ve worked for I think there’s great value in the owner operator model.

And specifically because of the fact that no one’s going to manage your asset like you. And and so we take these things seriously physically go out on the road. Work with the hotels shake everybody’s hand, talk about, culture that they’re building at their own facility, speak to guests, those are the really cool things about my job.

And then the focused items are the things we talked about, are we creating value for our investors? And and just like today, I’m about to get off this call with you. , the first meeting I have today is it’s my sales and revenue meeting. And we’re sitting down looking at pricing and we’re sitting down looking at value that we may have missed out on in the past and what we can do to fix it.

So we’re not having that problem anymore.

Josh Ramsey: Well, thanks so much for being here

Jemel Jones: Thank you

for having

Josh Ramsey: again.

Jemel Jones: Yes. Yes. Let’s do a part two.

Josh Ramsey: Okay. All right. Thanks [00:40:00] Jemel.

Jemel Jones: All right. Thank you.

Josh Ramsey: Bye.