On Thursday, September 6, 2018, the Baker Program in Real Estate had the privilege of hosting Derek Olsen, Class of 1992, for its Distinguished Speaker Series (DSS). Derek is a Senior Vice President with CHMWarnick (CHMW). CHMW is a highly regarded hospitality asset manager and provider of owner advisory services. Derek’s responsibilities include overseeing “financial modeling and valuations associated with the firm’s value enhancement, lease negotiations and redevelopment strategies.”[1] During his visit Derek wowed students with reflections on his career trajectory, overviews of exciting CHMW projects, discussion of challenges and opportunities facing the hospitality industry, and advice for professional success.
Derek quickly captivated the attention of DSS attendees with a presentation slide titled “adapting to change.” Featured prominently on this slide was a chart showcasing “U.S. Hotel Performance, 1989 – 2018” overlaid with symbols signifying key milestones in his academic and professional life. It became readily apparent that many of Derek’s achievements, accomplishments such as graduating from Cornell, completing his Master’s degree at MIT, and even starting new jobs, occurred during downturns. Derek went on to state that forging a successful career in the real estate industry requires adaptability and a willingness to apply your skillset to new areas of focus. With this segue, Derek shared about his diverse work experience in the areas of appraisals, feasibility analysis, brokerage, acquisitions, and restructuring.
Through his work with CHMW, Derek has provided development advisory oversight for many prestigious hotels throughout the United States. Derek showcased several example projects during his presentation to expose students to the vast array of services that development advisory work entails. The Candler Hotel Atlanta, part of the Curio Collection by Hilton, was the first example discussed. This 265-room hotel is scheduled to open in March 2019. CHMW is providing lead hospitality advisory services for the hotel and will serve as the asset manager upon project completion. As an advisor, CHMW has assisted the client with tasks such as concept development, facility programing, management and brand selection, developer selection, investment analysis, and due diligence. Since this project involves the conversion of the historic Chandler Building, CHMW also assisted the client with securing Historic Tax Credits.
Through its advisory work, CHMW is often at the forefront of innovations within the hospitality industry. Its work on W & Element Hotel, a dual-branded hotel underway in Philadelphia, PA, is a keen example of this. CHMW serves as the lead development advisor and anticipated asset manager for this project. Once complete, the W & Element Hotel will boast 755 rooms and 45,000 SF in meeting space. The hotel will also contain separate lobby areas and amenities for each brand. Students were very intrigued with this project, which, for some, was their first exposure to the dual-branding concept. Derek went on to explain that dual-branded hotels can be a great way to increase an asset’s occupancy, create operational efficiencies, target various market segments with a single asset, and diversify product offerings as a hedge against economic downturns.
During the question and answer portion of the discussion, students were curious to learn Derek’s perspective on the biggest challenges and opportunities facing the hospitality industry. In response, Derek shared that securing adequate labor is a significant hurdle for the industry. Historically low unemployment rates, rising labor costs and turbulence in the immigration system have all culminated in an environment that makes it hard for hotels to maintain adequate staffing levels. In discussing opportunities within hospitality, Derek highlighted how advances in artificial intelligence (AI) are changing how hotels operate. Examples of this shift he cited were growing use of self-check-in kiosks, robotic vacuums, and applications of AI for security.
Derek concluded his presentation with sage words of advice drawn from his 20 plus years of experience in the real estate industry. This advice included:
- Develop broad-based skills to help you navigate through all phases of the real estate investment cycle.
- Listen to your lawyers and other business advisors – you are paying them because they know more than you do.
- Real estate is not rocket science, success is largely driven by how hard you work.
- Create projects that you are proud of and make the built environment a better place to live, work and play.
- Give back to the community and stay involved as alumni whenever you can…it’s your biggest network.
- And most importantly…enjoy the ride!
The Baker Program in Real Estate tremendously enjoyed Derek’s visit and is incredibly grateful for the time and valuable insight that he shared with students.
[1] “Derek Olsen.” CHMWarnick, https://chmwarnick.com/team-member/derek-olsen/.
