Gencom Readies for Hotel Shopping Spree with Completion of $1B Portfolio Recapitalization

August 26, 2010
By Barbra Murray, Contributing Editor

With the wrapping up of the recapitalization of approximately $1 billon of its high-end portfolio, Miami-based luxury hospitality investment firm Gencom has financially regrouped and is now in acquisition mode.

Founded in 1987 by hospitality industry veteran Karim Alibhai, Gencom had been riding high until the tide turned for the company when its main lender, Lehman Brothers Holdings Inc., began the downward spiral that ultimately led to the global financial services firm’s demise in 2008. The recapitalization has now put Gencom back on track. The company is not disclosing the details of the financing effort, which involves a list of properties that includes The Ritz-Carlton, Bachelor Gulch in Avon, Colorado; The Ritz-Carlton, Philadelphia City Center Hotel; The Residences at The Ritz-Carlton, Philadelphia; and the 450-room The Ritz-Carlton, Key Biscayne Resort in Florida (pictured).

Gencom points to The Ritz-Carlton, Rancho Mirage Resort and The Residences at The Ritz-Carlton, Rancho Mirage in Southern California’s Riverside County as the object of one of its most recent transactions. The company had commenced a $600 million redevelopment of the property before financial issues caused construction activity to come to a halt in 2008.

But the restart button has just been pushed. In July, Gencom–reportedly assisted by the cash infusion it received when Magna RE, an entity led by Buenos Aires, Argentina-based investor Alfredo Roman, acquired a 50 percent share of the company last year–purchased the loan on the property in a foreclosure auction.

Gencom’s new investment plans extend well beyond the resumption of the Rancho Mirage project. The company is already in talks to buy several luxury properties, and will continue to pursue a strategy of acquiring premier assets in North America, South America and the Caribbean, as well as purchasing distressed notes. “Gencom in an ideal position to increase its stake in other world-class properties that align with our focus of acquiring prime properties in high barrier-to-entry markets,” Alibhai, company founder and principal, told CPE. “Our partnership with Magna has enabled us to capitalize on the unprecedented number of opportunities in the market place today and augment our existing portfolio of four- and five-star branded properties at exceptional values.”