This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.
A self-proclaimed “forever optimist” by nature, Arbor Lodging Partners CEO Vamsi Bonthala has learned over the last few years that sometimes worst-case scenarios can actually come to pass.
“The pandemic took any assumption about how bad we thought things we could get and multiplied it by 100,” said Bonthala, who co-runs the Chicago-based hotel investment and management company that manages 36 Marriott, Hilton, Hyatt and IHG properties across the United States.
Yet despite a challenging environment that has only grown trickier given current economic winds, Bonthala does not fear the future, pointing to strong fundamentals he expects will prevent a hard landing.
Since co-founding Arbor Lodging with fellow CEO Sheenal Patel in 2008, Bonthala has led efforts facilitating approximately $1B of transaction volume. He leads general corporate strategy for the company, dealing with acquisitions and dispositions, capital markets and joint venture partnerships while overseeing over 1,000 employees nationwide.
Prior to this, Bonthala practiced corporate law at Kirkland & Ellis and for the real estate group at Cadwalader, Wickersham & Taft.
The following has been lightly edited for clarity and style.
Courtesy of Vamsi Bonthala
Bonthala traveling this past summer.
Bisnow: Baron Rothschild once said the “time to buy is when there’s blood in the streets.” Where is the blood today?
Bonthala: I’m not sure there is “blood” anywhere quite yet, but we believe there will be opportunities that arise from the recent increase in interest rates. In particular, we are looking at ways that we can play in different parts of the capital stack as well as identifying acquisition opportunities that arise because of sellers that have challenges refinancing.
Bisnow: What is your most controversial CRE opinion and why are you right about it?
Bonthala: I’m not sure that I have any really “controversial” opinions. I suppose my best answer for this is that I believe things won’t be as bad as the experts are predicting for the economy in the coming year. There are certainly a lot of challenges ahead, but I believe there continue to be a number of strong fundamentals providing support and I am hopeful that our economy will navigate all of this without a hard landing. I guess it helps to be a forever optimist!
Bisnow: If you weren’t in real estate, what path would your career have taken?
Bonthala: I was a private equity attorney prior to co-founding Arbor Lodging, so the easy answer is that I would still be doing that today. However, given that path clearly wasn’t meant to be for me, I believe I would have still done something entrepreneurial. I was always interested in building something from the ground up.
Bisnow: If you could make one change to the industry, what would it be?
Bonthala: There is a crisis of affordable housing in this country. I would love to see zoning become more flexible so that more housing units can be created.
Bisnow: What is one thing you would do differently from early in your career?
Bonthala: Given that I was young when I started my business, I was particularly apprehensive about asking questions out of the fear that it would make us look like we did not know what we were doing. As a result, some decisions were made less efficiently than they could have been. If I did it all over again, I would ask a million more questions in the early days!
Courtesy of Vamsi Bonthala
Bonthala with his family at his alma mater, the University of Michigan.
Bisnow: As a leader, how do you decide who is worth mentoring and who is simply not a good fit?
Bonthala: I enjoy mentoring and I’d like to think I don’t make a decision about who is not a good fit. My goal is to be available to all and become a mentor to those that seek such mentorship.
Bisnow: What are your thoughts on the metaverse? Does it have any relevance for CRE?
Bonthala: I only know enough about the metaverse to be intrigued, but not enough to really opine on it yet. That being said, like most things, I think it can have relevance to CRE. Anything that affects the way we interact with the world ultimately also affects the way we interact with physical spaces.
Bisnow: What do you see as the lasting impacts of the pandemic on CRE?
Bonthala: Now that the dust is starting to settle, it’s becoming clear that we will not work exactly the way we used to work before the pandemic. As a result, it’s inevitable that we are going to see an impact on the office sector. That will ultimately affect how office space is used and how much is used. Additionally, as investors, I think there will be some lasting impact about how we think about a “worst-case scenario.” The pandemic took any assumption about how bad we thought things we could get and multiplied it by 100.
Bisnow: As you know, there is a massive conversation underway regarding advancing more people of color and women into the C-suite. What are you doing to address those voices and that movement within your own organization?
Bonthala: Given that my co-founder and I are both people of color, we can’t help but regularly think about this issue and how we can contribute to solutions. We are committed to a diverse workforce and corporate team, and deeply believe that such diversity helps us make better decisions, which ultimately helps grow our company.
Bisnow: So, this is the weekend interview. What’s your typical weekend routine?
Bonthala: My typical weekend routine these days runs around my kids! I have three very active boys and the weekends regularly involve their sports and other activities. I also always make some time to exercise or find other recharge time so that I can start the workweek refreshed — not always successful, but I try!