The group is skilled when it comes to acquiring top-tier luxury hotel proper­ties and working directly with hotel man­agement to enhance revenues and reduce costs. Their string of successful development deals and acquisitions speaks for itself. They have also mastered the art of relationship building— work­ing with such partners and financial backers as Prince Alwaleed and The Gap’s (retail store) Fisher family, not to mention aligning with Fairmont Hotels and Rosewood Hotels & Resorts.

And the group sees more good times ahead, as the sagging economy creates more opportunities to acquire highly esteemed assets that may have fallen vic­tim to the recent travel slump. The company already owns all or part of 17 hotels with 5,749 rooms. In addition to owned properties, Maritz, Wolff owns an interest in the Rosewood & Fairmont management companies, which manages 39 non-Maritz, Wolff-owned hotels and resorts.

“We seemed from the very beginning to think quite a bit alike about how to get particular transactions done. So we move pretty quickly,” said Wolff, who has more than 40 years of experience in the real estate industry appraising, acquiring, managing and redeveloping properties.

‘We also have heal thy debates, which are usually stronger than just dialogue, but it ultimate­ly ends in con­sensus— and a better consen­sus. It is what distinguishes us from top-heavy organiza­tions,” said Maritz who co-­f o u n d e d Maritz, Wolff & Co. in 1992 in St. Louis with Wolff.

‘The dialogue lends itself to improving whatever deal we’re working on,” said DiNapoli, who has more than 10 years of real estate development experi­ence, and talks more like a man dis­cussing a hobby than a high-powered executive in a cut-throat marketplace.

This joint method of doing business has worked well for Maritz, Wolff, since the company has retained all but one of the properties it has acquired. In 1995, it sold the Four Seasons Biltmore in Santa Bar­bara, which was bought in the same year for $50 million, to Beanie Babies creator H. Ty Warner last year for $150 million.

While it’s hard to put a valuation on the Maritz, Wolff & Co. portfolio of ultra-luxury hotels and resorts, Wolff said he and his partners have a business worth $1.4 billion.

But over time, the group real­ized that as the markets fluctu­ated, it would be better off if aligned with a well-known name or two. ‘That was the reason for the Fairmont and Rosewood acquisitions,” DiNapoli explained.

In October 1997, Maritz, Wolff acquired a 50% ownership in the five-star Mansion on Turtle Creek in Dallas and a 50% own­ership in the Rosewood management company and brand.

In July 1998, Maritz, Wolff purchased a 50% interest in three more premier hotels— the San Francisco Fairmont, the New Orleans Fairmont and the Dal­las Fairmont Hotel. The agreement also gave the firm a 50% stake in Fairmont Management Co., which operates New York’s Plaza Hotel, Boston’s Copley Plaza and Fairmont Hotels in San Jose and Chicago.

Since those deals, Maritz, Wolff has acquired several properties and aligned them with the Fairmont or Rosewood brand. The company has become quite good at matching property and location with the right operator.

“In the case of Rosewood, that’s our job,” said Wolff. “Our job is to seek as many management opportunities as pos­sible that fit the Rosewood profile.”

The company purchased the 180-room Carlyle hotel in New York earlier this year after the property had been on the block for more than 12 months. Maritz, Wolff acquired the hotel for $130 million, and has asked Rosewood to manage it as the brand’s flagship New York property.

Maritz, Wolff hired Thierry Despont, a New York-based designer, to update The Carlyle, a Rosewood hotel, with work to include public areas, corridors and F&B outlets.

Wolff noted that the company is also in “serious” negotiations with Forest City Enterprises to do a Rosewood hotel over the Bloomingdales project in downtown San Francisco.

Rosewood currently operates hotels and resorts in: Dallas; London; Indonesia; Saudi Arabia; Tokyo; Panama; Mexico; the Virgin Islands; Switzerland; Puerto Rico; West Indies; Canada; and the Micronesian Islands.

“Rosewood already has a unique ability to make a profit on smaller hotels. With The Carlyle in New York, and now [hopefully] this one in San Francisco, Rosewood is becoming a more domi­nant brand,” said Wolff. “The biggest hole for Rosewood was New York, which we now have covered [with the Carlyle]. We have a Rosewood in London and Tokyo, so we have the three world finan­cial centers covered,” he said.

The company’s relationship with Fairmont is slightly different, but also includes eyeing opportunities to increase the brand’s portfolio. “Our rela­tionship with Fairmont— well, we bought two hotels and converted them to the Fairmont brand,” said Wolff. “And we will continue to keep our eyes open for similar opportunities.”

In 1999, Maritz, Wolff & Co. bought the historic 302-room Miramar Hotel in downtown Santa Monica from an affili­ate of Fujita Corp. The company then inked a deal with Fairmont to manage the property as the Fairmont Miramar in November 1999.

Also in 1999, the group purchased another hotel in Kansas City, which later became a Fairmont.

Other Fairmont hotels owned or partial­ly owned by Maritz, Wolff include The Fairmont San Francisco, The Fairmont New Orleans and The San Jose Fairmont. “The great thing is, the two brands don’t conflict, so it’s sort of a good thing. We’re in the management business pret­ty heavily with Rosewood, and in it par­tially with Fairmont, and not at all with some of our other properties. It works out well,” said Wolff.

Other partners/relationships such as that with Prince Alwaleed, who owns an interest in Fairmont in partnership with Maritz, Wolff & Co., also add value, explained Wolff.

“It’s the relationships that help us get through challenges. Relationships— that’s where the value you don’t expect gets added to a particular project or situa­tion. We have very supportive and inter­esting partners including SPO Partners in California, the Fisher family, who founded The Gap, oil heiress Caroline Rose Hunt [in Rosewood] and, of course, the Prince,” said Wolff

“A hotel is a business in a box,” said Wolff. “And today’s hotel situation is based on how a hotel is financed. We’ve been fortunate; we haven’t over-lever­aged our hotels, so we are in better shape to face a decline in the market. The big problem today is how much debt you have, and we feel comfortable in that regard.”

Wolff uses his 40-plus years of experi­ence and keen insight in the real estate and hotel industries as his guide. “I’m older and I’ve been through a lot of dips in the industry. Those who have the wherewithal to stay the course usu­ally land on their feet,” Wolff said. But he noted that this recent cycle has been one of long sustained growth, which the industry hasn’t seen before, and, as a result, has thrown some play­ers for a loop.

“As a result of this slowdown, we’ve seen a sharp, over-exaggerated slowdown in corporate business travel,” said DiNapoli. “I think it surprised everyone how fast occupancy went down. But we think a sizable pipeline of deferred business travel will be read to kick back in when the economy does.

“There will probably be some casualties.” said Maritz, who sees another year of uncertainty.

“I’m more optimistic,” said Wolff, who noted, “Hotels are sometimes good indicators of the down cycle, but not necessarily the up.

Maritz, Wolff is always look­ing for new luxury hotel—acqui­sition anchor management opportunities The group’s collective “eye” tends to fall on those “once—in—a—lifetime” opportunities of a select few stellar assets others only dream of owning or developing.

“The next six months will be an attractive environment due to over—leveraged properties,” said Maritz. ‘This is a business of high 0~Cn1ting leverage— add on high financial leverage, and it’s a recipe for potential disaster, or potential opportu­nity,” lie said with a smile.

DiNapoli noted the group is seeing early signs of some hotel owners having problems carrying their assets and covering debts, which means that Maritz, Wolff is “encouraged to move ahead, instead of waiting for the last vulture.”

In November the Regent filed for Chapter 11 bankruptcy protection. Despite an apparently superior 11th-hour offer by local casino operator Coast Resorts for $82 million, U.S. Bankruptcy Judge Robert Jones chose the $80 million cash offer from Maritz, Wolff as Regent debtors, and management had completed background investigations for the Maritz offer. Maritz’ designation as the preferred bidder sets the minimum figure for which the Regent hotel-casino could be sold in the bankruptcy court auc­tion, which is scheduled for a Sept. 25 completion. The sale is expected to be completed by late October.

DiNapoli wouldn’t comment on whether or not the group felt they would ultimately end up with the property, but he did note, “Selling it soon and making sure it sells is a high priority for [the owners and] this type of transaction.” He said Maritz, Wolff if successful in acquiring the asset, would likely rebrand the Regent. He did not name a brand. Currently in San Jose, CA. the group is overseeing a $67 million hotel addition to the

Fairmont property, which will house 264 new guestrooms. The 13 story addition is being devel­oped by Maritz, Wolff & Co. on a one—acre Site adjacent to The San Jose Fairmont. Completion of the project which will also bring 20,000 square feet of meeting space and 18,000 square feet of prime retail space— is expected by the first quarter of 2002.

With about 18 properties under their care, one of the challenges Wolff, Maritz, and DiNapoli face is spreading out their time to take care of their existing assets, as well as to find new real estate opportunities. The group can and does select development, but prefers to acquire assets.

“We spend 80% of our time on 10% of what is going on— the problems. The challenge is to be smart enough to move forward with that other 20% [of our time], figuring out ways to grow and what new investments to make,” said Maritz.