From Japanese Foreign Affairs to Disneyland Paris to Owning Hotels with Heather Turner

Summary

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Episode Summary: Real Talk – “From Japanese Foreign Affairs to Disneyland Paris to Owning Hotels” with Heather Turner

Podcast: Real Talk: Real Estate Discussions with Andrew Kirsh
Date: November 7, 2025
Guest: Heather Turner, CEO and Co-Founder, Tamarack Capital Partners
Host: Andrew Kirsh
Episode Theme: A wide-ranging conversation tracing Heather Turner’s unique, global career path—from Japan’s Ministry of Foreign Affairs to the Walt Disney Company to co-founding a successful hotel investment firm. The discussion covers navigating market cycles, lessons from hospitality, and strategic insights for new industry entrants.

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Main Theme / Purpose

Andrew Kirsh welcomes Heather Turner to the debut of his upgraded podcast studio for a deep dive into her unorthodox career journey and current perspectives on the hospitality real estate market. The episode explores how international experiences shaped her, key strategies in hotel investment, responses to COVID disruptions, and actionable career advice for real estate newcomers.

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Key Discussion Points and Insights

1. Heather Turner’s Career Path: From Japan to Hospitality (03:01–12:53)

• Early Background and Education
  • Born in Chicago, raised outside Nashville, studied international business & Japanese at Florida State (03:39–05:27).
  • Chose Japanese due to Japan’s economic influence in late '80s/'90s: “If I’m gonna do international business, why not do it in Japan?” (06:31, Heather).
• First Job: Japanese Ministry of Foreign Affairs
  • Moved to Kyoto, worked in international relations (05:38–08:42).
  • Memorable experience: Helped set up an engineering university in Nepal instead of sending direct aid.
    • “Rather than paying for a bridge, we paid for a school.” (08:48, Heather).
• Transition to Disney & Los Angeles
  • Joined Disney in international retail, then Parks and Resorts—entry into the hotel business (09:27–10:09).
  • “Disney’s a great place to be from… It’s a huge network, tremendous people, and a great calling card, particularly in Los Angeles.” (09:45, Heather).
• Restructuring Disneyland Paris
  • Managed a billion-dollar transaction; left after realizing big achievements didn’t move Disney’s stock, sparking her move to hotel private equity (13:05–14:04).

2. Insights from Hospitality Real Estate & Hotel Operations (15:11–22:20)

• Founding Tamarack Capital Partners
  • Launched in 2018 with former team, motivated to keep talented team together (15:11–15:58).
• Investment Focus
  • Focuses on full-service hotels, value-add strategy: under-capitalized, mismanaged, or complicated assets, renovate and reposition for long-term owners (16:10–17:13).
  • “We buy complicated, not underperforming assets with higher cost of capital and we clean them up and simplify them…” (16:10, Heather).
• Hotel Ownership 101
  • Explained the distinction between owning vs. branding/managing hotels for non-hotel audience (17:46–18:45).
• Value Creation in Hotels: What Moves the Needle?
  • Public and F&B spaces create the most impact (bar, vibe, local relevance as key draws) (19:25–20:47).
  • Example: Revamped the Fairmont Seattle’s lobby to lower average guest age and boost business from tech companies.
  • “Rooms have to be at a certain standard, but you can really move the needle in the public areas—whether it’s food and beverage or the lobby.” (20:47, Heather).
• Industry’s ‘Amenity Arms Race’
  • Luxury hotels invest heavily in amenities (spas, lagoons, design) to ‘pull everyone up’ in standards (21:25–22:20).

3. Revenue Management and Market Philosophy (23:04–27:57)

• Unique Hotel Market Dynamics
  • “We release 100% of our square footage every night.” (23:04, Heather).
  • Discussion of strategies for occupancy vs. rate, including last-minute deals via third-party platforms (HotelTonight, Expedia).
• Revenue Management as a Career
  • Presents it as an ideal role for analytical graduates, especially as AI innovations loom (23:53–25:04).
  • “There is a magic formula for every night, for every room.” (24:19, Heather).
• Heather’s COVID Strategy
  • With revenue dropping to zero, Tamarack renovated during shutdowns to emerge stronger. Decisions were case-by-case; acknowledged not all proved correct (28:10–31:17).
  • “Our theory was, let's come out of COVID stronger than we went into it.” (29:23, Heather).
• Capital Partner Relationships
  • Managed capital partner relationships during disruptions, sometimes facing pushback over CapEx decisions (30:17–31:17).

4. Post-COVID Trends & Market Observations (31:59–42:37)

• Travel Recovery Patterns
  • Leisure travel rebounded quickly; corporate travel lags and may never return to 2019 shares (31:59–32:58).
  • “Leisure travel came roaring back… People using their wallets more for experiences, less for goods.” (32:58, Heather).
• Tamarack’s Early Growth
  • Unique transition: negotiated to bring portfolio and partners from previous firm, ensuring continuity and trust (33:15–34:43).
• Current Market Challenges: LA & Beyond
  • LA is viewed as “untouchable or the best contrarian bet,” due to regulation, costs, and union activity (39:09–40:50).
  • “Between the mansion tax and the wage ordinance and the union activities—it’s really tough to see how anybody earns a reasonable return on a hotel here.” (40:16, Heather).
  • National RevPar is flat/negative, costs rising faster than income (37:44–39:09).
  • Highlights need for micro vs. macro bets, focusing on asset-level stories.
• Capital Appetite & Investment Strategy
  • Shift from debt back into equity, hotel returns compelling vs. other assets, but underwriting is asset/market specific (40:57–42:37).
  • Focus on “barbell” approach: beat-up markets for basis, and high-yield “after capital cap rates.”

5. The Competition from Short-Term Rentals (43:08–44:37)

• Hotels vs. Airbnb/VRBO
  • Consistency, compliance, service, and amenity “arms race” are hotels’ advantages (43:20–44:37).
  • “The amenity creep is precisely there to compete with Airbnb and VRBO…” (44:10, Heather).
  • Personal anecdote: Courtney (Andrew's wife) only stays at hotels for service and design.

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Notable Quotes & Memorable Moments

• On Starting Out in Japan:
  “I was a kid who was unreasonably fearless... My interview for the job was in Japanese, and it was horrendous. I thought, there’s no way they’re going to hire me, but… the offer came over and I was like, all right, I’m going to go.” —Heather (07:03–07:52)

• On Value in Hotel Investment:
  “We buy complicated, not underperforming, assets… and we clean them up and we simplify them and we do big renovations.” —Heather (16:10)

• On COVID’s Impact:
  “There’s always been this theoretical risk that revenue goes to zero... In 2020, that theoretical risk was proven out.” —Heather (28:23) “Our theory was, let's come out of COVID stronger than we went into it… while everyone else is backing down, we're going to double down and put money into the assets.” —Heather (29:23)

• On LA Hotel Investments:
  “LA right now is either untouchable or the best contrarian bet anybody's going to make... For our capital, most of our capital partners are kind of five-year hold funds, and if you can't see the turn yet, then it's a little hard to invest too early.” —Heather (39:09–40:50)

• Career Advice for Industry Entrants:
  “Don’t lock in too soon. Don’t take the direct path… The more interesting path will serve you well in the long term.” —Heather (50:14)

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Timestamps for Key Segments

• Heather’s background and move to Japan: 05:27–08:42
• Work at Disney; transition into hotels: 09:27–14:04
• Why launch Tamarack Capital: 15:11–15:58
• Hotel investment philosophy/value-add: 16:10–17:13
• Revenue management and occupancy strategy: 23:04–25:04
• COVID renovation strategy: 28:10–31:17
• Market challenges: LA & current hospitality outlook: 37:44–40:50
• Hotels vs. Airbnb/VRBO: 43:08–44:37
• Advice for newcomers: 50:14

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Lightning Round Highlights (45:05–51:18)

• Alternate career: “I’d probably work at Diesel Bookstore—we bought it a year ago. I love spending time with writers and readers…” (45:28)
• Favorite hotel: George V Paris—memorable visit with then-boyfriend/husband (46:10)
• Favorite vacation spot: “South Africa or Tanzania—I’m a huge safari fan.” (47:13)
• U.S. market to watch: “Salt Lake City… easiest lift to great skiing, clean, well-run, Olympics coming” (48:26)
• Current TV show: The Diplomat (49:20)
• California vs. Florida? “California, 100%.” (49:46)
• Industry advice: “Don’t take the direct path… you can take a wide and varied route and end up in real estate.” (50:14)

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Tone and Flow

The conversation is warm, lively, and candid. Heather is insightful and conversational, mixing deep industry wisdom with engaging personal stories. Andrew’s tone is friendly, deeply knowledgeable, and occasionally playful, especially during the lightning round.

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For Newcomers

If you’ve never listened to Real Talk before, this episode offers both personal and professional value—blending global perspectives, real estate acumen, and actionable career guidance in an engaging, accessible way.

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End of Summary

Transcript

[A]

Welcome to Real Talk Real Estate discussions with Andrew Kirsch. In each episode, Andrew interviews industry leaders. We'll hear their real time opinions on today's market, their background and unique career highlights and guidance for newcomers into the industry. You can find this [e-mail] and on YouTube, LinkedIn, Apple Podcasts, Spotify, Google podcasts and more. Now here's the host of Real Talk, Andrew Kirsch.

[B]

Episode 83 of Real Talk. Well, as you could tell, I'm sporting my Dodger jersey back to back World Series champions. If you know me just a little, or if you've listened to all 83 episodes, you know that there's one thing that I am and that is a gigantic Dodger fan. Ever since I was probably a baby where my parents took me to Dodger Stadium, 13 years old, being there for the Kirk Gibson home run, being there for the lean years of my 20s and 30s, and being there for the Freddy Freeman home run last year in game one with my son. This year was an epic season and an epic World Series which culminated with probably the greatest game seven. You know what I think? Greatest baseball game ever. In the final game between the Blue Jays and the Dodgers. So to all my Dodger fans out there, I know this is a happy day. And on this episode of Real Talk, I have Heather Turner, the CEO and co founder of Tamarack Capital Partners. Heather's a good friend of mine. She's in YPO with me and she helped me debut my new podcast studio with new furniture. And we have a wide ranging conversation about her background, a very interesting background that took her to Japan, Kyoto, Japan, where she started her career and now is the co founder of Tamarack, which owns and operates hotels, throughout the country. I'm sure you're going to enjoy my conversation with Heather Turner. Welcome to another edition of Real Talk. And we are in yet a newly designed podcast studio. I'm here with my good friend and Heather Turner, co founder of Tamarack Capital Partners. Heather, welcome to the new podcast studio.

[A]

Thank you. I'm thrilled to be your first guest in the studio.

[B]

Yeah.

[A]

Fantastic.

[B]

This is now, I think, version 3.0. So I think we finally got it right.

[A]

I think so too.

[B]

The motif we wanted was a living room and a little more professional setup. And no better guest to debut our new podcast studio than Ms. Heather Turner.

[A]

Thank you so much.

[B]

So in case people don't know Tamarac, we're going to get into it later, but just sort of an overview. What is tamarac?

[A]

Yeah. So Tamarack Capital Partners is a private real estate investment firm and we focus in the hospitality space. So we typically partner with large institutions or family offices to go buy value add hotels across.

[B]

Across the US have you always been in the hospitality space in commercial real estate?

[A]

I've almost always been in the hospitality space, but I have a very circuitous route to commercial real estate.

[B]

Well, let's get into that.

[A]

Your typical origin story.

[B]

I love it. Well, you just set up my next question, so first, let's bring it back. Where, Where'd you grow up?

[A]

So I was born in Chicago and I grew up outside of Nashville, Tennessee.

[B]

I was in Nashville a couple weeks ago. I think we may have talked that after the fires, without ever being in Nashville, Courtney was convinced that we should move to Nashville.

[A]

You know, we have very good friends who move after the fires to Nashville and they're having, you know, their daughter's in high school there now. They're having a great time.

[B]

Yeah, I think lots of my friends.

[A]

Were from when I grew up there.

[B]

It was one of these quintessential beautiful days. It was mid October, so the weather was perfect. So it wasn't like July or August. And my client, her house is on a lake. And we went wake surfing and it's 20, 30 minutes away from downtown Nashville. And we spent an evening on Broadway and listening to great music. And I called up Courtney, did we make the right decision by staying in la or should we have moved to Nashville? But you moved out of Nashville.

[A]

I moved out of Nashville, yeah.

[B]

But Nashville was a little different.

[A]

It was so different then, and it has been on such a tremendous run lately. And I have to say, from a hotel perspective, we sort of missed it because when hotels first started getting hot in Nashville, I would look at it and be like, no, I don't see it. But it has just really exploded and kind of become, I think, a huge competitor to places like New Orleans and even to places like Orlando and Las Vegas. From a tourism draw perspective, I said.

[B]

If New Orleans and Las Vegas ever had a child, it would be Nashville. It's just a cleaner version with my personal taste, I think better music and I don't know, just usually some really nice weather as well.

[A]

Yeah.

[B]

So, okay, so after Nashville.

[A]

So after Nashville, I went to undergrad at Florida State where I studied international business and Japanese. And then my first job out of undergrad, I went to work for the Japanese Ministry of Foreign Affairs.

[B]

So do you speak Japanese?

[A]

I do.

[B]

I don't think I knew this about you. Like, do you keep that low profile?

[A]

I did because at this point, my Japanese is good for ordering sushi and giving directions to a taxi driver. But at the time, my job was in Japanese.

[B]

Well, we're on satel, so after this, we need to go to a great Japanese restaurant.

[A]

I'm feeling very much at home here.

[B]

So when you listen or watch Dodger games and sh. Or Yamamoto or Sasaki are being interviewed, do you not even need the interpreter?

[A]

I listen to it in Japanese. I have to shush my family so that we can listen in Japanese first. And I would say I get most of it. The interpreter.

[B]

Yeah, I was going to say he.

[A]

Simplifies a little bit, both directions, as most interpreters do, but the nuance is definitely there.

[B]

When did you start taking Japanese?

[A]

In college?

[B]

Not until college. Okay. What. What brought that?

[A]

You know, I was studying international business, and at the time, this was the late 80s, early 90s, the Japanese were sort of taking over. They had just bought Rockefeller Plaza, Pebble Beach. And I thought, well, if I'm gonna do international business, why not do it in Japan? And I ended up moving to Kyoto for a couple of years right out of undergrad to work for the Japanese government.

[B]

That's amazing. Now, did you have that, like, know how or intuition, you know, as a child? Is this brought to you through your family and your upbringing or that it's just internal?

[A]

Probably a little bit of both. You know, my. My family definitely brought me, like, you know, listening to motivational at that time, tapes on cassette for, you know, how to sort of set goals and that type of thing. But I also was a kid who was unreasonably fearless. I would jump off high dives and went skydiving and would, you know, as very young, would knock on doors of people I didn't know and ask them if they had kids my age. Just, like, completely fearless as a child. And I think that sort of lent itself to wanting to try something outside the box and move abroad and that type of approach. When I was young, I mean, my interview for the job was in Japanese, and it was horrendous. I thought, there's no way they're going.

[B]

To hire me, but.

[A]

And then the offer came over, and I was like, all right, I'm going to go.

[B]

So you went from Nashville to Tallahassee to Kyoto, Japan.

[A]

That's right.

[B]

What a culture shock. Yeah.

[A]

And I did not fit in in Japan any way, shape or form.

[B]

You stuck out.

[A]

Yeah.

[B]

And so how. What was the experience like?

[A]

It was fantastic.

[B]

I haven't. I've never been to Japan. I want to go, yeah.

[A]

Really? Such a beautiful country, such a great culture. I think if I had been a Japanese woman in my early 20s, I would have had a very different experience. But being an American woman In my early 20s there, I was invited to do a lot of things I otherwise would not have been able to do had I been, you know, sort of born and raised there.

[B]

Such as. I mean, you're just.

[A]

I mean, it was. It was a phenomenal experience. Such as there was a flood in Nepal, and my job was to do international relations.

[B]

And who are you working for?

[A]

I worked for the Japanese Ministry of Foreign Foreign Affairs. So the Japanese government. Think of it like the State Department for. In the United States.

[B]

Okay.

[A]

And my job was to help them in international relations. So there was. There was a flight in Nepal and they asked for money, and instead of sending the money, we sent. We set up a university there to sort of teach engineering and how to rebuild bridges and things like that. Rather than, you know, be able to teach them to fish. Rather than paying for a bridge, we paid for a school. So I got to go to amazing Kathmandu and. And translate, negotiate between the Nepalese government and the Japanese government, setting up this new university that's, I think, still there today.

[B]

Oh, and you're 22, 23 years old at the time. This is incredible. I had no idea. And how long were you there?

[A]

I was there a little over two years, so it was a short stint. And then when I moved back to the States, I went to work for the Walt Disney Company here in Los Angeles.

[B]

Okay. That's how you.

[A]

International retail. So that's how I found my way to LA the first time.

[B]

Got it. So international retail. And. And what was that experience of working for Walt Disney Company?

[A]

You know, it was. It was a lot of fun. And I actually was there twice. Once in retail and once in parks and resorts, which is how I got into the hotel business, ultimately. And I always say Disney's a great place to be from. It's a great calling card. It's a huge network, particularly in Los Angeles, and tremendous people that I met there and got to work with and learn from. So it was a terrific experience.

[B]

We were just in Orlando together, although we didn't. Right, we didn't. Yeah, we didn't. Yeah, we didn't see each other. Yeah. Yeah. I think those conferences are getting a little bigger. They're supposed to be, you know, more manageable in size. But what did you think? Or did you go to the Universal Epic event?

[A]

Yeah, I did. Did you go?

[B]

Yeah, I Went and I made the mistake. So that roller coaster that they were touting, I forgot what it's called, but so it was Malcolm Davies, Omar Ivanier and Jessica Levin and myself. And I went on the first one time and survived. Did not even open my eyes. 62 miles an hour, tons of loops, corkscrews. And here was the mistake. Heather. We got off and we had the buyout. And so there were no lines. And so you feel like you're 12 years old. Let's do it again. That was literally the worst, one of the worst mistakes I have made, because as soon as I got off the second time, my equilibrium said to me, andrew, I let you go once, I'm not letting you go a second time. And surviving unscathed. And I felt so nauseous for an hour in the. We took an Uber back. I had to have the Uber driver pull over. It wasn't until we got to the hotel room and I turned the shower on for 20 minutes. I. I finally calmed down. Like, my equilibrium finally resettled an hour after that ride. It was intense, but Six and a half billion dollar park, I know it's.

[A]

Impressive, and I do think with that park, not to throw any shade. I've always thought the Disney parks were a more immersive experience than the Universal parks. And with that park, I feel like Universal is. I don't know if they've caught Disney, but they are darn close. Yeah, it's very impressive. But, yeah, it's fun to be back in the parks at night because we used to do that when I was at Disney and we were building hotels in Tokyo and launching the cruise business.

[B]

Yeah. How about the hotels? Not the one that we were staying, which was what, 20, 30 minutes away, but they were building these unbelievable hotels at different, different price points to be part of, immersed within that park. I thought that was quite fascinating, having.

[A]

Them integrated from the beginning.

[B]

Right.

[A]

Smart. And it's interesting moving from working with Disney to being in the hotel investment space. You know, the hotels at a park like Universal or Disney are a tool to keep people on property longer. They're not necessarily designed to be a profit engine themselves. It's a big transition.

[B]

Yeah. So how long were you at Disney?

[A]

Oh, gosh, I was at Disney combined before and after business school for about five years.

[B]

Okay. And then. And then what was next?

[A]

So I. I went to HBS between my stints at Disney, and then the second time I'm there, I'm working for the Parks and Resorts group and we did a. A big restructure of Disneyland Paris, partially publicly traded, partially owned by the French government, partially owned by the Walt Disney Company. And it was like a billion dollar transaction. And I'd been flying back and forth for a year to get it done. And we announce it in the press and the Disney stock price doesn't move at all. And I looked at myself and I thought, I get paid primarily in stock. The only upside for me in this is if I can do something at this company that really moves the stock price. And having just done what I thought was a pretty great transaction and not move the stock price, I decided I needed to move on. And so I found a group based here in LA that did hotel private equity for luxury hotels. And so I parlayed the Disney experience into working with them, which was fantastic.

[B]

And what was that company?

[A]

That company's called Merritt's Wolf.

[B]

Okay, just touching on the amusement parks sitting here in 2025, are you surprised or what is your reaction of how central these parks are to Disney and other similar corporations compared to the other content that they have? The parks, I feel like, have become one of the most important aspects of their revenue.

[A]

Yeah, I think you're right. And I think we're seeing this sort of across the board in leisure travel. People love experiences and people are spending more of, you know, the share of wallet is shifting more to experiences than from things. Particularly as people across the world really gain wealth and gain comfort in their everyday necessities, they're looking for experiences and richer, more immersive experiences. And I think that's what those parks offer.

[B]

And so when did you decide to form your own company?

[A]

So we formed Tamarack Capital Partners seven years ago. Seven years ago this month, actually.

[B]

Oh, all right. Happy anniversary.

[A]

Thank you.

[B]

What was the impetus of that?

[A]

The impetus of that? So my team and I were at a firm called DiNapoli Capital Partners, and it was a great platform, a great group of people, and I was a partner there running the hotel group and for a period of time running the senior housing group as well. But one of the things I realized was that the team that I had working for me was really fantastic. And there probably wasn't enough room at the top for everyone to stay together in terms of how the economics got split up, who was doing what. And I felt like if I was going to keep that team together, we needed to go out on our own and give it a shot. And so we did.

[B]

And so obviously there's so many different aspects of the hospitality asset class, from resort style hotels to select service Hotels, where do you guys focus?

[A]

We focus in full service hotels primarily. So we've done a lot of independent properties, a few limited service properties, but most of what we do is your full service Marriott, Hilton, Hyatt assets. And we look for kind of what I would call deep value add opportunities. So something that's been under capitalized, poorly managed, poorly branded, it might have some difficult capital structure with a ground lease or something else. And we try to come in, our cost of capital tends to be at the higher end. Right. Hotels are pretty volatile. So people who are investing in hotels out of private equity funds are looking at kind of the top end of their range. If they're trying to deliver high teens blended to their investors, then the hotels need to be pulling their weight kind of in the high teens, low 20s. And so I sort of think about it as we buy complicated, not underperforming assets with higher cost of capital and we clean them up and we simplify them and we do big renovations and we get them running in a place where someone with a lower cost of capital will come in and want to own it long term.

[B]

Yeah. And I'm sure most of my audience are, will understand that when you're buying these hotels, you know, you're not the Marriotts, you're not the Westons, you are owning the real estate. And there's usually a flag that is attached to the hotel in case there is a segment of, of my audience who may not understand. They don't focus in hotels, they focus in other asset classes. You just want to just simplify, simply, you know, describe the hotel transaction and who all the players are. Sure.

[A]

The interesting thing I think about the hotel space, if we think about a branded asset, is that typically you'll buy an asset, we call it encumbered, a brand. Right. So that can be a positive or a negative encumbrance, depending on the brand, the duration, the cost associated with it. But what most of the typical traveling consumers may not know is when you go to a Four Seasons or you go to a Marriott Four Seasons and Marriott don't own those hotels. Those are owned by either a public REIT or a private equity fund or a group like ours or a high net worth family office, and we own the P and L. So within commercial real estate, it's one of the most operationally intensive. I mean, you're buying a piece of real estate and a business, and in that business, oftentimes we'll hire a brand and a manager to operate it for us and we pay them percent of revenue to do that. But we own all the decisions that kind of make up the P and L. What kind of capital do you want to invest to drive different revenue? What's the staffing model, what's the marketing? What's the approach to try to get to profitability?

[B]

You know, in the multi family world, it's kitchens and bathrooms and maybe some common areas that get the biggest bang for your buck. Maybe if it's retail, it's making sure there's a grocery anchored center and then the inline. You know, maybe you cut a good deal with that grocery center anchor and the inlines are where you're making your money. When you're buying a full service hotel and you want to do a value add project, what do you look for? Whether it's the pool, whether it's F and B, whether it's the rooms, whether it's the common areas, maybe it's all of the above, you know, where do you see the most value?

[A]

Yeah, it depends a little bit on the deal and a little bit on the asset market it's going after. Right. So I would say food and beverage tends to be the lowest margin part of the hotel business, but can bring you the most edge. So if you have a great bar in your lobby, if you have a great chef, you're going to drive better vibe, better experience and that kind of thing. You know, excitement begets excitement. Nobody wants to sit in an empty lobby, nobody wants to sit in an empty restaurant. And that type of thing really does drive, drive business. We saw that we owned and renovated the Fairmont in Seattle recently and we put a phenomenal bar in the lobby and the average age of the guests and the groups and the corporate travelers that went to that hotel from before when it was kind of your grandmother's lobby with violin music and a floral arrangement to this sort of hopping place with some a good beat in the background and you know, a lot of energy. I think the average age of the guests there dropped like 20 years. And that drove a lot of business because then we started to get more corporate travelers. Sure, the Amazons, the Zillows, the tech companies who were coming to Seattle, all of the young people wanted to be there and that drove what we call Revpar index. So revenue per available room relative to other hotels really benefited from that.

[B]

And maybe even a local market where they want to come to the hotel. They may not be staying in the hotel, but they want to partake.

[A]

That drives a local market, not just for people who want to come in and have a drink. But then you want to have your child's bar mitzvah there or your parents anniversary party or your company's holiday party there. Those types of things to bring in sort of local catering also benefits us. So to answer, go back to answering your question. Where do we see value add? I think rooms have to be at a certain standard or you're going to lose market share. But I think you can really move the needle in the public areas whether it's food and beverage lobby. When I was at Merritt's Wolf, we were the largest owner of Four Seasons in the US at the time we co owned Rosewood Hotels, the management company as well as a lot of the real estate and we co owned Fairmont Hotel Management company as well as a lot of the real estate. So in the luxury space there's sort of this never ending amount of money that people are putting into these assets. Right. We don't invest as much in the luxury space these days in part because it's dominated by ultra high net worth individuals. But what we're seeing is that end of the market is pulling everybody up. That end of the market is continuing to perform very well. It is a little bit of an arms race of amenities. You know, what else can you install at your resort? Whether it's a new Crystal Lagoon or an expansive spa, something like that. We're seeing capital go into these higher end assets that are really kind of pulling everybody up.

[B]

So yeah, speaking speaking of Crystal Lagoon, how about that body of water, whatever it was at the hotel where we stayed in Orlando, Crystal Lagoon, that thing was insane. That color. I felt like I was, I don't know, in the Mediterranean or not in Orlando, not in Orlando.

[A]

It was eight acres and it had motorboats on it and you could go stand up paddling.

[B]

Yes, it was pretty incredible. So in the industrial world or retail world, you know, leases are 10 years. In the apartment world, you know, one year leases in hotels every night is essentially a different, a new tenant.

[A]

We release 100% of our square footage every night.

[B]

Every night. And so what is the philosophy of keeping rates at a certain level but occupancy may be lower or having, I don't know, last minute bargains on hotel rates through these third party expediters. The expedias the hotel tonights because you don't want a low occupancy and rates are going to come down. If you have a lot of vacancy for 2448 hour period. What is your philosophy on that?

[A]

Revenue management, which is what you're describing there is I think one of the.

[B]

More that was a more eloquently succinct way of saying it.

[A]

Revenue management, I think is one of the more interesting jobs in the hotel world right now. Like if you're an analytical young person coming out of college, I think hotel revenue management is a fascinating role because it depends a little bit on what else you have to offer. Right. So if you're charging a resort fee or you're getting good capture in food and beverage or golf or spa or things like that, then you might want to have a little bit more of an occupancy forward strategy because you're going to have all these add on ways to make money. If you are a limited service hotel and you really just need to fill the rooms, you don't have anything else to sell people, then you have to have a little bit more of a rate forward strategy relative to your band. Right. I'm not saying that the resorts have a lower rate than the limited service assets do, but it is sort of a daily art becoming more and more complex. And I think it'll be interesting to see what AI does to that space because there is a magic formula for every night, for every room. I know someone I met through YPO has a hotel in Florida and his goal is to fill every room and he'll drop right until he has to do it.

[B]

I may have stayed in one of those. There's a story. So when we. So that Tuesday night when I'm sure you left to go to la, I needed to go to Palm beach to meet a client for dinner. I actually took the Brightline train from Orlando to West Palm. Unbelievable experience. I felt like I was in a European style train that was may not be as fast as a Japanese bullet train, but we were hauling. It was a gorgeous train station experience, great food, the train itself, clean, brand new. It was a fantastic, a quality experience that connects right now from Orlando to West Palm, all the way down to Miami. And I'm thinking why can't we do this in California? And they probably spent a fraction as to what we've spent and, and have nothing. And they, they privatized it. Fortress owns it. So anyway, there's a long winded way of saying so I went to Palm beach, had dinner with a client, then had a drink at the Breakers Hotel in Palm Beach. The most gorgeous hotel I've ever seen. But I had an early morning flight the next morning to, to go to LA and being a little frugal running a law firm want, can't you know don't want to break the bank. I said, okay, I'm not going to spend.

[A]

Not staying at the Breakers.

[B]

12, 1400, 1600 a night at the Breakers. And I was an hour and a half away from, or they said maybe even more in the morning to get to Fort Lauderdale, where my train, or, excuse me, my flight was leaving to go to la. So I looked on my Hotel Tonight app in Fort Lauderdale, a Westin on the beach before resort fee.

[A]

Yeah.

[B]

$145.

[A]

Wow, that's a great deal.

[B]

My resort fee was a third of my hotel rate. It was like $45. So for $200, now, granted, I hope your friend doesn't own, nor do you own the West End in Orlando or in Fort Lauderdale. It was not the Breakers.

[A]

Oh, yes.

[B]

Okay. But it was an ability to get a decent business type hotel on the water. I ran on the beach the next morning for $200.

[A]

Great experience, right?

[B]

It wasn't a great experience, but it was a good deal.

[A]

Yeah. I think, you know, the, the ability for that hotel to capture you at the last minute is what they, you know, they were trying to be as attractive to you at the last minute as they could because otherwise that inventory goes to waste. Right. It's just like an airline seat. It is. It expires and you're never going to get that night back.

[B]

Yeah.

[A]

Kudos to them for getting it done.

[B]

Yes. My wife thought I was crazy, though. She said, spend the money, stay at the Breakers. So if I'm doing my math correctly, if you've had your company for seven years, that means you founded it in 2018.

[A]

That's right.

[B]

And so about 18 months into it, there was a little thing called Covid.

[A]

That's right.

[B]

So how did you deal with COVID when your focus was in the hospitality business and nobody was traveling?

[A]

Yeah, it was, I mean, it was brutal. Just completely brutal. Because in the hotel space, as you said earlier, we release all of our inventory every night. And so there's always been this theoretical risk that revenue goes to zero. And in 2020, that theoretical risk was proven out and revenue went to zero and we closed most of our hotels. I think we had a dozen or so hotels at that time. And, and I'll tell you that story how we got to a dozen that quickly, because that's a little bit of backstory how we transitioned the company. But we, we ended up, we and the management companies that we've hired ended up having to furlough and lay off a lot of people. And that was a really really difficult, difficult decision and really difficult time. And then very slowly we started bringing them back. One of the things that we did in almost all of our hotels was we renovated during COVID So we said, we believe in this asset, we believe in this market. We have a business plan to try to improve that hotel. So we're going to do it now while everyone else is backing down. We're going to double down and put money into the assets while no one is traveling, while no one's here, while we're not disrupting any business and we're not displacing anybody's holiday. You know, nobody likes to be in a hotel that's under construction. And so we, our theory was, let's come out of COVID stronger than we went into it, at least from the physical asset perspective, and see what if we can't steal some share right when we start building back.

[B]

But did you, you had to have conversations with your equity partners in spending this type of capex and having the belief that Covid will not be permanent, even though some people thought this was the end of, not the end of the world, but the end of travelism, the end of travel, the end of socialization. Was there pushback in spending this type of capex on your hotels?

[A]

I would say there was not any uniform pushback. There were certain places where our capital partners would say, maybe we shouldn't do that now or maybe we should hold back. We ultimately ended up going forward on, I think, all of them. And it wasn't always the right decision. You know, there are some markets that took so long to come back that that extra drag on the investment of having invested the capital and have the long duration drag was not the right decision, but the assets are better for it. The investment wasn't necessarily better for in every case. I think overall, let's hope we never have a situation like Covid again where we have empty hotels and plenty of opportunity to renovate them. I think the lesson that we learned from that is that the way the local government, local community reacts to the situation has a profound and long term impact on the speed and, and height of the recovery.

[B]

Sure. Desantis spoke to us at that conference and he was definitely touting his Covid strategy compared to what we were experiencing in California. Definitely a different way. I want to get to how you guys built up Tamarack, but were you surprised of how quickly the demand for travel occurred shortly after Covid? And I know that that was different in, in each market depending on how pervasive the lockdown was. But the two to three years coming out of COVID what was that like for you?

[A]

Well, it was interesting because our resorts and our leisure assets were on fire and our city center assets were still pretty empty because corporate travel was slow to rebound. Group travel was a little bit better to rebound. I think corporate travel is going to stabilize below 2019 on a relative basis. Meaning what percent of the business overall in the hotel is corporate travel? Because people have gotten more comfortable, the road warriors in particular have gotten more comfortable not being on the road every day. So the McKenzie's and the IBM's of the world, that's no longer their business model, but leisure travel came roaring back. And I think that goes to what we talked about earlier. People using their wallets more for experiences, less for goods. The demand for travel and people having felt like they missed out in that period of time when they weren't going has that. And the demographics are really great tailwinds for us as we continue to invest in the space.

[B]

Yeah, I know we've jumped around a little bit, but. So let's talk about those first early years of Tamarack. How did you build up the company? How did you capitalize your deals? Because I know you said you got to, what, 12 assets pretty quickly.

[A]

Yeah. One of the things that we did, we realized when we were sort of planning our exit, because we invest on a deal by deal basis, we tend to do repeat business with a lot of our capital partners. And so I sort of came to the conclusion pretty quickly, I'm not going to be able to leave dinapoli on Friday and start Tamarack on Monday and call any of those capital partners from dinapoli if we don't figure out how to take care of them. Because I was taking the whole team with me. And so what we were able to do, and kudos to my partners on both sides of the transaction, we were able to structure essentially an earn out where I brought the business with me. So the assets that we bought under the prior firm, we brought with us, and we continue to portfolio manage asset management, manage and maintain those relationships with the capital partners. So that the very first deal that we did under Tamarack was a partner that we had done prior deals with under DiNapoli. And several of the first deals that we'd done were people that we had been working with for several years. So we didn't leave them high and dry on the things they had done with us before. We kept taking care of those investments and everybody, you know, maintained their percentage interest. And we figured out A way to make it work between the two firms. And that sort of helped us start with a little bit of Runway, which was great for us. Also take care of our capital partners, which was the most important aspect of it. And that helped us then with regard to those relationships, wanting to continue to go forward with us.

[B]

What a respectful, mature way of handling it. Because as you know, look, I've seen a lot of companies form that from their pre existing companies and it's not always seamless and there's some infighting and resentment and some jealousy.

[A]

And.

[B]

You were looking at it from both a short term perspective and a long term perspective, and it sounded like it was a win. Win for everybody.

[A]

Yeah, I think so. It didn't happen in the first conversation.

[B]

Okay, sure. I'm not so.

[A]

Yeah, but I think we all got to a really good place and I'm, I'm really happy with how that transition went and really grateful to my old partners and my new partners and all of, all the folks who invest with us. And you know, I would say we're also, you know, we talked a little bit about COVID which was a low point. We're also now seeing, you know, yesterday we had that extra long Dodgers game, which we haven't even talked about.

[B]

Oh my God. I mean, I am, by the time this gets published, we'll, we'll know if the Dodgers did win the World Series or not. But yes, we are. What, just 12 hours from probably one of the most epic game threes of, or any World Series game ever and ending at midnight. And we're taping at 11am just 11 hours later. So what a, what a great game that was.

[A]

So I do feel a little bit like I was thinking about it this morning. I'm like, this cycle that we've been in has been a little bit like last night's game.

[B]

Oh, geez.

[A]

We know we're going to win at the end.

[B]

Oh, we didn't know, but okay.

[A]

It's taking kind of twice as long as it should with where, you know, between Covid and interest rates. Yeah, it's like, I know there's a great, we're very optimistic about the opportunities going forward and you know, sort of see that win at the end of the duration, but it's taken a long time.

[B]

I'm glad you were that optimistic that the Dodgers would, would win and prevail, and I'm glad you're optimistic about the hospitality market in general. And I think it's a great segue to talk about where we are in Today's market for the hospitality sector, I represent a lot of folks who, who own hotels and especially those that own in Southern California and in the city of LA specifically. They're struggling. It is not easy to transact in the city. And I've my podcast, we've talked about it a lot from the union perspective, from the 30 million. 30 million. 30. It seems like 30 million $30 minimum wage. From a federal perspective, a lot of people don't want to travel into the United States. So I know you made an analogy as to last night's game, but what is your feeling of the hospitality market right now?

[A]

Yeah, I think so. Starting at sort of the national level, revenue per available room is flat this year. It's probably going to go negative before we end the year. That's really tough for margins because costs are going up and revenues flat to negative. But that's on the macro basis and that's largely driven by policy and things. You know, you alluded to folks not wanting to come to the U.S. we've got government shut down. We've got all kinds of reasons that, you know, government's not traveling. International inbound is, is way down and international outbound is up. So that I think is going to come out in the wash. The tariff wars are going to get resolved. Hopefully we see some good news tomorrow out of the meeting with China. I think the tariff wars eventually are going to settle in and that's going to become more normalized and so the international imbalance will get back to a reasonable place and hopefully policy follows. But for us, we are not, we don't make macro bets, we make micro bets. So we buy individual assets. And those individual assets need to have a story and a reason and a way that we can come in and add value. And so that's where we try to focus. But when we look at markets, you know, you have to make your bet in certain markets and LA right now is either untouchable or the best contrarian bet anybody's going to make.

[B]

Oh, wow.

[A]

And at the moment, I think, you know, most of us probably lean towards the untouchable side.

[B]

Most of my clients and the capital clients and capital partners that we work with, with, they put a red line through Los Angeles.

[A]

Yeah.

[B]

And I don't think our political leaders truly grasp that.

[A]

Yeah, I don't either. And I think San Francisco had a similar, not quite as clear red line through it a few years ago and they've had a change of leadership and that cities has a lot of positive momentum right now and it's also got AI sure huge force there. But I do think that long term Los Angeles is not going away as a prime global destination for people to come and visit. And I think it will sort of have a renaissance at some point. It's going to take, I think, a change of political will here to make it a really attractive investable market again. Because between the mansion tax and the wage ordinance and the union activities here, it's really tough to see how anybody earns a reasonable return on a hotel here. And so they're just not underwriting right now. And for our capital, most of our capital partners are kind of five year hold kind of, you know, funds. And if you can't see the turn yet, then it's a little hard to invest too early because you're going to drag out your IRR or have to wait for another cycle before you can exit. And that is tough on the type of capital that we typically work with.

[B]

And what is the capital's appetite for hotel today, for buying hotels?

[A]

Yeah, it's interesting because we have seen a lot of people who had legacy assets who sort of went through the last cycle, have pulled back a little bit on the hotel space and there are a ton of new entrants. But we're also seeing for the last few years a lot of our partners had more emphasis on the private credit side than they had on the private equity side. So they were deploying a lot of their capital into debt and less into equity. And now with the yield curve coming down and the debt capital markets being so open with CMBS and Life Companies and all the participants there, we're starting to see people go further out on the risk scale. And that pushes people into the hotel space because returns are typically stronger than they are in other parts of commercial real estate. Again, I think it's an asset by asset, location by location decision. But supply has, it's looking really good. Supply is going to be very low for the next several years. Not been a good time to build hotels and demand. Fundamentals long term are very good. Again, we've got some policy things and some local issues, but we are spending time sort of at the what I would call the barbells of value add. One being great basis place. So really beat up markets. Portland, Seattle, San Francisco, maybe la LA is a little bit of a unique bird, but. And then the other end is places where we see really nice yield. So the after capital cap rate looking very attractive. Sort of high single digits, low double digits, kind of after capital cap rates.

[B]

Because my Last question before we get into the world famous lightning round of Real Talk. How do you compete with extended stay? Whether it's Airbnb, vrbo. I've got a client who builds condos, sells them for. With the business plan of renting them out for short term rentals. What's your thoughts on. On. On that segment of. Of, I wouldn't call it hospitality, I guess. Short term rentals.

[A]

Yeah, I think, I think it depends on the use case. Right. Those folks tend to be most competitive with leisure travel. So a lot of people like to rent a house in Hawaii instead of.

[B]

Go to a resort.

[A]

But what I think what the hotel space has that those don't is they've got consistency. They are actually compliant with ada. They pay their taxes, like all the things that sort of make it a real business as opposed to some of these other types of things that long term makes it safer, better for the guest. But there's service, right. You've got a concierge, you've got restaurants, you've got housekeeping, you've got all of these things. And there's a lot of hybrid out there, right. So the inspirados of the world will bring in anything you need, including housekeeping, every day. But you're renting a house from them. A lot of those happen to be at resorts. And we talked earlier about the amenity creep in the luxury space. And the amenity creep is precisely there to compete with Airbnb and VRBO and these short term rentals.

[B]

Well, you're just listing all the reasons why Courtney, my wife, has never stayed in an Airbnb and will only stay at a hotel.

[A]

Thank you, Courtney.

[B]

Yes. You need more of Courtney's. But yeah, she just loved. There's nothing greater for her greater satisfaction than walking into the lobby of a beautiful hotel, going into a great room and having the service that you cannot replicate.

[A]

I agree. And you have, I think, much better design, like much more interesting architecture, design, art, music, ambiance. Like the whole experience is so much richer at a resort than it is at a condo somewhere. You're gonna go in with your digital key and unpack your eggs.

[B]

Very true. Are you ready for the lightning round?

[A]

I am.

[B]

So the only time I bring out a piece of paper is for this lightning round. All right, let's see what's in sword. You do not know ahead of time of these questions. Okay. Just wanted to make sure that the audience knew that this was not. Yes. All right. Heather.

[A]

Yes.

[B]

If you weren't in the real estate industry, what Would you be doing?

[A]

Oh, you know, I used to say architect, but my husband and I bought Diesel Bookstore about a year ago. And so, honestly, I would probably work at the bookstore. I love spending time with writers and readers, but the writers are particularly interesting to me because they, you know, that's sort of the genesis of so much creativity that we use in film, television, all of those types of things in pop culture. And Nugent just. I find writers very brave, put themselves out there.

[B]

It's a great bookstore. I've been there in the Brentwood Country Mart, so I love going there. All right, someone in the hotel industry, you must have an opinion as to your favorite hotel that you've ever stayed in.

[A]

Ah, my favorite hotel. I would have to say the Georges San in Paris. It's a great hotel, and it was a great story. I was there for business with Disney. We were staying there, and my boyfriend at the time, now husband, was working in Brussels, and he met me there. And we all roll up. You know, there's like, 20 people rolling in from Disney. We all roll up in the cars to check in, and he comes walking down the sidewalk waving at me with, like, a bag of, you know, cheese and wine and those types of things. And I'm like.

[B]

Not here.

[A]

I get to the front desk, and they're like, oh, Mademoiselle Castell Delari, your guest has arrived. I was like, I don't have a guest. And, like. Right, you don't have a guest. Like, you people have done this before.

[B]

He was there a little early.

[A]

And. Yeah, so that was. And it's a beautiful, fabulous hotel.

[B]

Oh, yes. No, it is. And so is Paris your favorite vacation spot, or what is your favorite vacation spot in the world?

[A]

Oh, my favorite vacation spot might have to be either South Africa or Tanzania. I'm a huge safari fan.

[B]

Okay.

[A]

So we went last year to South Africa and stayed at a Place Londy for one of our safaris. And they understand hospitality, like, almost no place. I've been highly recommend.

[B]

Have you been to India? Yes, yes. I think we talked about this. I'm going in, like, six weeks.

[A]

You're down. Love it.

[B]

I can't wait for a wedding.

[A]

It's a phenomenal experience, especially for a wedding. I went last year for a wedding.

[B]

I think I should do a podcast in India. How about that?

[A]

I think you should.

[B]

That would be fun. Ashley, want to come with me in your.

[A]

In your wedding garb?

[B]

Oh, you have no. You have no idea, Heather, of what Courtney and I are going through to. To get these Authentic Indian clothes.

[A]

Have you been to Artesia? To the store?

[B]

Courtney has, yes. She's. She has scoped out every. Every place. I have an appointment tomorrow on someplace on Pico to go to. So. Yeah. How about an under the radar location domestically that you think is primed for growth in the hospitality market to the extent you want to talk about it.

[A]

Oh, to the extent I want to talk about where it's going to grow. I really like the fundamentals in Salt Lake. I think Salt Lake City has so much to offer from an outdoor perspective. It's the easiest lift to great skiing in the country. And they've got, you know, the silicon slopes. Goldman has a huge office there. There's a lot of tech startups. It's clean, well run. It's a, it's a great town. And Olympics are coming again soon, so I think Salt Lake's interesting.

[B]

I think it's the best airport in the United States. It's unbelievable. That's why we go to Deer Valley to ski. It's. Even if there's, you know, storms, you get in, you get out. It's fantastic. Yeah. Hour and a half from. From la.

[A]

Faster than driving a mammoth.

[B]

It is indeed. All right, how about the best show that you're currently or just finished up watching?

[A]

We just are watching the Diplomat.

[B]

Oh, yes. Courtney binged that new season within two days.

[A]

Yeah. I really like that show.

[B]

It's a great show. Black Rabbit for me.

[A]

Oh, really?

[B]

Yeah. Jason Bateman.

[A]

Yes.

[B]

Jude Law. It's. It's dark, but it's great. It's great. If you can take Jason Bateman with long hair, then, you know, California or Florida, what's better?

[A]

California 100%.

[B]

Okay. Just making sure that last.

[A]

And my parents live there and my sister and her husband have a place there. So I do spend a lot of time in Florida.

[B]

Yeah.

[A]

California 100%.

[B]

So let's say you're talking to your 22, 23 year old self. But today, in 2025, or someone who's just coming out of college and they want to be in the real estate business, what advice would you give them today?

[A]

Don't lock in too soon. Don't take the direct path. I think the more interesting path will serve you well in the long term because I think it helps you. At least I feel that way because I feel I've been very fortunate in my career. I think it helps you to see the bigger picture. So don't. I don't think if someone wants to be in real estate that they have to go to the best real estate program in the country for college and focus on real estate and get their, you know, first internship at eastil and, you know, do all that good stuff. I think you can take a wide and varied route and end up in real estate and have a good time doing it.

[B]

You could end up in Kyoto, Japan or somewhere else in the world and have a successful career in real estate. Heather, I am so glad that our paths have crossed through YPO and that you have been able to sit down with me and debut our new studio. Much like the Dodgers success last night, hopefully they win the World Series and a lot of success to Tamarack and just keep it going.

[A]

Thank you. A few great success with the firm and the podcast and go Dodgers tonight.

[B]

I appreciate it. Go Dodgers. And that is another episode of Real Talk.

[A]

You've been listening to Real Talk real estate discussions with Andrew Kirsch. You can catch prior episodes@skalar kirsch.com and on YouTube, LinkedIn, Apple Podcasts, Spotify, Google Podcasts and more. Thank you for your positive reviews, comments and for sharing the show with others.