S.E.C. Real Estate Observer

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When I was a little boy—in fact, all throughout the years as I grew up—my Mother had a saying that used to drive me NUTS!  Anytime I was anxious for something to happen (ie., Christmas, birthday, school to get out, etc.), she would always say to me, “Nick, patience is a virtue, and one that will pay off for you someday.”  As I said, this used to drive me absolutely nuts, but the older I get, as with almost everything I can recall my parents saying to me, I now realize the truth and value of what I was told/taught every day.

In this message, I want to share with all of you a perfect example that has happened recently in my professional life.  In early 2015 I was working on a transaction with Bill Stonaker, CCIM, S.E.C.  Bill had a major development in the works in Ft. Worth and needed a hotel developer to build a hotel within his project.  Knowing that one of my professional areas of expertise is hotel development and operations, Bill reached out to me to see if I had interest in the project.  After some initial due diligence on the project and area, I decided it was a project my company would like to pursue, so we proceeded to put the tract under contract.

As we proceeded with our formal due diligence on the site, Bill called me one day with a unique request.  Bill was motivated to get the project going quickly, and had been contacted by another hotel developer about the site.  Now, Bill knew that I was diligently pursuing the site, but he also knew I had some hurdles in front of me to secure the “flag” or brand for the site, which was Marriott, because I wasn’t yet a Marriott franchisee.  The other developer was, and had a much higher chance of getting approved by the brand to build the hotel, and quicker than I could.  Bill asked me if I would consider letting my contract go on the site so that he could sell to the other developer and keep his project moving.  In the spirit of friendship and wanting not only what was best for me, but also for my S.E.C. “brother,” I agreed.

The other developer proceeded expeditiously and was able to close on the land and get approved by Marriott to build the hotel, just as expected.  Here’s where things get interesting: About 60 days ago, Bill called and said that due to some significant changes in the personal life of the original developer, he had not been able to actually start construction on the hotel as previously planned and was at risk of not only losing the Marriott flag for the site, he was also at risk of Bill exercising his right to repurchase the site due to inactivity.  Bill’s question for me was simple: “Are you willing to reengage on the deal?”  By this time, I had become a Marriott franchisee and had acquired a different Marriott hotel, so I was now in the position to get brand approval quickly and had the ability to do the deal.  After several weeks of negotiations with the previous developer, and several moments where I nearly walked away from the deal because the previous developer was being somewhat unreasonable in his pricing expectations, I am now back in position to acquire the site and build a great hotel.

All of this has occurred over a two-year period, almost to the month, and it only happened for a few reasons:

1. First and foremost, I didn’t think or function selfishly the first time I had the land under contract and allowed Bill and his partners to go in a direction that was more advantageous to them.
2. When things didn’t work out as expected—and, I believe, because of the way I handled things in the first round—Bill had the confidence in my company to reengage and get the deal done.
3. We both exercised patience.

So, my parting thought to leave with all of you is this: When the opportunity arises to put someone else’s needs and desires ahead of your own, take it, and secondly, exercise patience!  As the saying goes, the best things come to those who wait, and in the words of my mother, “Patience is a virtue that will pay off someday!”