Everything it Touches Turns to Gold
Tharaldson Hospitality Development
Tharaldson Hospitality Development is a diverse owner-builder firm of business-class hotels, with hospitality at its very core. Its hotels are under franchise with world-class brands such as Hilton, Marriott and the Intercontinental Hotels Group (IHG).
Within this model, the dynamic THD owns, operates and manages its own products and is growing at an awe-inspiring pace. Its Vice President, Don Cape, introduced me to the inner workings of this unusual and intriguing realty entity. “We only build the very best brands, partner with those brands, and then build limited-service hotels in high-bid entry markets, while the hotels remain legacy assets of our company,” Cape explains.
The company’s road to the top was a long and winding one. Gary Tharaldson, the founder of the firm, bought his first hotel in 1982, which he soon grew into a large portfolio. Don Cape joined Gary Tharaldson in 2005, just as Gary sold his entire collection after receiving an offer for more than he thought it was worth. He used all the proceeds to conduct a large lifetime property exchange and acquired a number of key assets that included large-scale, high-value mixed-use properties like freeway intersections and other high-profile, unentitled two- to 300-acre properties. The company then entitled these properties, slowly sold them and used the proceeds to build hotels.
For a number of years, the team purchased and developed land through large-scale projects across the country, generating capital for more hotel developments. In 2013, the Tharaldson Hospitality Development team decided to up the amps and committed to a goal of completing three to five hotels annually. This goal quickly evolved and today, the development team has 60 hotels on the drawing board, 15 under construction, and is committed to building 15 to 20 hotels per year for the next 20 years.
In 2017 alone, Tharaldson Hospitality Development, together with Tharaldson Hospitality Management, opened five brand new hotels – the Hilton Garden Inn, Arizona; the Residence Inn in Denver/Stapleton, Colorado; the Holiday Inn Express in Visalia, California; the Homewood Suites in Las Vegas, Nevada; and the Staybridge Suites in Columbus, Ohio. It also acquired the Holiday Inn Express in Las Vegas and took up managing the Residence Inn in Springfield, Virginia – in total, adding 754 rooms to its already remarkable collection of top-quality accommodation.
The company is part of Tharaldson Investments which operates across a multitude of fields. Hospitality management and hotel construction are two of its largest functions, but it also operates in a variety of other areas such as land development, renewable energy projects and more. At its heart, however, Tharaldson Hospitality Development is a family company that’s been developing hotels for many years. “We’ve built and operated just over 400 hotels, so we’re not a construction company soliciting business, but rather a family legacy office that does development for our own purposes, without third party development,” Cape says.
Hedging its assets, the company only invests in the most talented people to run its multidimensional operations. Its focus is on perpetual improvement on all levels and part of its strategy to achieve this goal is allowing its teams initiative and creativity, giving them free rein in implementing ideas and systems that outperform existing ones. Tharaldson Hospitality Development has proven that hiring the brightest and the best delivers phenomenal bottom lines as well as unsurpassed customer and staff satisfaction.
Its development team does everything from property acquisition, entitlements and permitting to construction. Once a building is complete, it is handed over to the operations team, which is run by Aimee Fyke, Chief Operations Officer. The two teams work together seamlessly throughout the process to improve overall guest experience. Cape’s team integrates the operation team’s requests into the project plan, making it part of the design. Its input plays a definitive role in final developments as this team’s frontline experience and knowledge of current trends ultimately combine to anticipate guests’ needs.
These projects demand scores of skilled professionals working around the clock to deliver the best possible final product. To this end, one of the company’s collaborators is a firm of architects who, while not exclusive to THD, form an integral part of the business’ in-house design and planning process, providing professional architectural support and advice throughout. Development and construction is handled by Tharaldson Hospitality Development’s small in-house team, while everything else is taken care of by a team of hand-picked, independent consultants. “It’s hard to get in with us, but once a consultant is accepted, they never leave because we’re like a family. We treat our consultants like our own employees,” says Cape.
Good communication is paramount to project success and constant dialogue between teams in design, construction, and in the field ensures the final quality of each product, for which the ultimate proof is in return guests. “We pride ourselves on our repeat customers. Guest satisfaction is always our main focus,” says Cape. For Tharaldson Hospitality Development, the secret is in the details, which really boils down to the tiniest things – even as simple as where coffee and tea are laid out in a room and how the layout functions within the greater space. While the company’s intimate understanding of superb design – and especially of hotel ergonomics – has won the team multiple awards for its sterling work, the process of bringing projects to fruition is rarely glamorous, exciting though it may be.
In an exceptionally robust market where suitable, undeveloped land is rare and expensive and utilities and entitlements are challenging to obtain, building limited-service hotels is undeniably not for the faint-hearted. Yet despite inhospitable market conditions, these high-bid entry acquisitions are exactly what the Tharaldson team focuses on, and once such markets display high demand and brand availability, it sets about locating the ideal property to develop.
Understanding the complexities and environmental challenges that inevitably come with these developments allows the company to explore its ingenuity and creativity to the fullest. When bringing these demanding projects to fruition in areas where others may have neither the expertise nor the resources with which to develop optimally, the going can be as tough as it is rewarding. In California alone, the entitlement process can keep developers waiting for three to four years in some areas, and up to five years on the coast. As a result, and as with anything worth waiting for, patience and perseverance are indispensable.
Finding ideal properties can be as precarious as developing them. To ensure a steady stream of available sites, Tharaldson Hospitality Development has formed close relationships with major mall and office developers as well as brokerages and municipalities who assist in the business of tracking local real estate, mainly in the western United States. Acquisitions can range from city-owned properties to sites that form part of major retail developments. To this end, the company has become a trusted partner in many mixed-use projects based entirely on its prize performance and consistent history of delivering on commitments.
Tharaldson Hospitality Development is thriving, as everyone at the firm shares Don Cape’s passion for bringing wonderful hotels to life. “All our hotels are my favorites,” he shares. “I can’t actually single out any one project – they all have different nuances. They’re all difficult projects that most people would look at and say, ‘I’m not sure you’re going to be able to pull that off,’ but then we always bring them to market.”
In addition to this contagious passion, his take on grabbing seemingly lackluster opportunities with both hands and turning them into valuable legacy capital is not only inspiring, but also refreshing. “Hindsight baffles them,” he laughs. With its Midas touch, Tharaldson Hospitality Development knows exactly how to turn insurmountable dreams into legendary hospitality – indeed a rare and precious skill in a world filled with ‘ordinary.’