Ninety-seven percent of the Marriotts are owned by someone other than Marriott.
But Marriott started by buying hotels (PropCo), then spun off the in-house management brand (OpCo) once it had meaningful enterprise value.
That structure is decades old in hospitality.
What is new is how many operators in housing, industrial, self-storage, and office are reaching for it, usually without a clear sense of which half of the business they are actually building — and how to finance the two together.
On Thursday, August 20 at 12 pm ET, we are hosting a two-hour workshop on how these platforms get structured and capitalized, taught by Paul Stanton, Partner at Thesis Driven and at PTB, a real estate investment banking boutique, where he has funded over $1 billion of real estate projects and platforms.
Start with the rule that decides most of these deals: the OpCo exists in service of the PropCo. Its job is to make the unlevered yield on the real estate better than the same building would produce under a commoditized use. Furnish an apartment building, rent it monthly as an extended stay, and revenue reaches $3,000 per unit against $1,200 in opex, on a project cost that rose from $300,000 to $350,000 per unit. Roughly 150 basis points of yield pickup on the identical asset. If that pickup isn't on the spreadsheet, the concept is a hobby.
The harder problem is the first $30 million. Most allocators will not back a new operator running an unproven concept, because a 32% IRR pitch loses to the multifamily sponsor who has delivered 18% for thirty years. Venture used to fill that gap and won't again. The workshop covers what is filling it now, including investors underwriting six to eight times their capital over fifteen-year holds, operators handing early LPs a slice of the GP plus warrants in the OpCo, and the cheapest path of all: proving the OpCo inside a landlord's vacant space before raising a dollar of PropCo equity.
Also covered:
OpCo growth capital versus PropCo real estate capital, leasebacks, JVs, and hybrid management agreements, and what each investor wants
Three case studies: a flex office operator proving his OpCo inside his employer's building, an SFR founder starting PropCo first and paying her seed investor in warrants, and a hotel operator with no real estate track record who proto-franchises a niche brand and co-GPs with a family office
What the economics really look like with a single capital partner, including the 2% asset management fee that becomes closer to zero and the 20% promote that becomes 15% over a higher hurdle
A live session mapping your own structure, with peer feedback on the pitch
Thursday, August 20, 12 to 2 pm ET, live on Zoom, with plenty of time for questions. $299. Everyone who registers gets the recording, the deck, the case studies, and the term sheet and agreement templates, whether or not they attend live.
Paul Stanton is a Partner at PTB, a boutique investment bank focused on joint ventures, capital raising, and M&A transactions. Paul is a Teacher and Writer at Thesis Driven, developing and growing next-gen real estate & proptech concepts.
Private wealth has passed the institutional market, and most sponsors have no idea how to reach it. A workshop on raising from family offices and RIAs.
