• David Grammig

An Interview With Benjamin Habbel - Tech Entrepreneur & Hospitality Investor

Updated: Sep 25, 2020

Benjamin Habbel is hosting a Virtual Investors Meetup for family offices and private investors who cannot attend his lunch series and wish to learn more about Limestone Capital and its projects.

Limestone Capital Investors Meetup

13 October 2020

14:00 - 15:15 Central European Time

Please register here: https://bit.ly/3j1ZxuA

Benjamin, you were the Chief of Staff at Google in Mountain View, its California Headquarters. Please tell us a bit about your career, because real estate and hospitality came only at a later stage, correct?

Yes, I started my career out at Google in Silicon Valley, joining the team as an intern when I was still in school, and later joined full-time. It was an exciting time to be part of Google, as we were going through hyper-growth at the time — more than doubling in size every year. I worked on products like Android, Google Maps and of course Search — all of which became tools we ended up using on a daily basis. I left Google and followed my entrepreneurial dream to develop technology for hotels. I was always fascinated by hotels since childhood, as my grandparents were hoteliers for five-star hotels in Germany. It was clear to me that the hotel industry was becoming antiquated and lagging behind — so I saw an opening to develop e-commerce technology for large brands and sell them state-of-the-art e-commerce tools — which worked out well. We exited the business in 2016 to a large data science company in New York — Intent Data Science.

What fascinates you about real estate and hospitality in particular? Why something so non-technical?

Every company has to thrive to be a tech company today. You just come at it from a different angle. Instead of developing one single tool and selling it to thousands of customers, you have to orchestrate a technology architecture that delivers amazing consumer experiences to your guests. In hospitality specifically, it’s been quite nightmarish the way hotels used to be run, or implemented technology. Antiquated Property Management Systems — these are the screens the receptionists stare into instead of greeting you — is just the tipping point. But what really fascinated me was the way you can unlock brick-and-mortar real estate value by applying technology and better management practices. Hotel properties are essentially valued by the profitability of its operation. Hence, if you can operate the business efficiently, you create tremendous value to the property owner.

You surely must have had a vision. What was it and has the initial vision survived until today?

Our vision was simple — we wanted to transform physical places and give them a renewed purpose. We saw so many properties in Europe that were mispositioned, badly managed, or simply ripe for a modern renovation, while at the same time the modern traveller was craving a new product — one that is focused on sustainability, mindfulness and relaxed luxury — so we decided to simply do it ourselves.

So maybe you can share a bit about what the beginning of your hospitality venture was like?

In the beginning, as in almost all startup stories, it starts with a rather simple idea. To use technology, modern concept and quality design to turn broken hotel properties into thriving businesses. We decided early on that if we really want to execute as efficiently as we believed it had to be done, we would need to manage the full value creation chain from beginning to end. This allowed us to be more nimble and free of any third party requirements and independent of the often outdated conventional wisdom. As a next step, we pooled some capital between us partners, invited friends and family to invest alongside us, and bought the first couple of properties in Portugal. From then on, with every transaction, we learned a lot about the many dysfunctional sides of this antiquated industry, and every time we try to get better, faster and more efficient — using the extensive tool kit we have built by now.

Today you are the Founder and CEO of Limestone Capital, not a fund per se, but an investment firm for realising your hospitality vision. Please talk a bit more about Limestone Capital.

Limestone Capital is essentially a way for any qualified investor to invest alongside our own family offices and investment activity. We are a small group of repeat entrepreneurs that are investing their own money. Limestone acts as the orchestrator to bring it all together.

Investors Day in Portugal at one of the properties acquired by Limestone Capital

You mentioned Italy and Portugal. Is the Mediterranean your sweet spot?

We use both data and qualitative signals when deciding on our focus areas. Portugal has seen a tremendous growth vector over the past decade, that is leading the country into a sustainable transformation of its tourism sector. Four and five-star products are in very high demand, and supply is limited. Investing at a time when you could still acquire real estate at very attractive prices was another key aspect.

With Italy, it’s a slightly different thesis. COVID has struck Italy and parts of Spain really badly, and the 2020 season (or lack thereof) has left many family-run hotels struggling for their future. This is an environment where we can source extremely lucrative deals, that our transformation team turns into modern, contemporary hotels with a sustainable business model.

As previously mentioned, Limestone Capital is not really a fund but more an investment vehicle. What does that mean for investors you work with?

Investors can invest alongside us in the exact same deals we are putting our own money into. To do so, we have created a vehicle that invests in all deals we pursue. Once we decide to move forward

on a deal, we present them to all partners in the vehicle, and investors can pick and choose the deals they like to see additional exposure. It’s a great way to get a high-quality deal flow for our partners and to invest alongside a great group of experienced real estate investors.

One can assume that you are not a one-man show. Who are the notable partners that you got on board?

We are four partners. Alexander Schütz, Founder and CEO of C-Quadrat. He has decades of experience in real estate investing himself and has invested in our property deals from the start. Christian Angermayer is a repeat entrepreneur and investor in his own right (I have known him for over twelve years now) has created multiple real estate ventures, including COREO, which is listed on the German stock exchange. He brings an incredible network with him and is passionate about hospitality like all of us. Last but certainly not least, my co-founder Jeff Coe, who I started my last company with and who I’ve worked with extremely closely for the last eight years. He runs our asset management side of the business and is plugged into the real estate market like few others. There is a tremendous team working with us, that all bring something to the table that compliments our skill sets. Hotel Operations, Chefs, Designers — you need the full orchestra.

Most people grow tired of talking about Corona, but since tourism is one of the hardest-hit sectors, I have to ask: what effect did the pandemic have on your business model?

To keep it simple, we are glad we didn't have any properties online yet going into the crisis. For us, we believe in the long term health of other global tourism industries and are thrilled to be able to enter now where prices have collapsed and open our hotels, modern and fresh when people return to travelling. Human nature hasn’t changed, and hence there will always be a strong demand for unique, beautiful locations for travellers to explore.

So, did you amend your strategy and what’s the plan for the future?

Of course. Given our background, we are very agile as a team and adopted quickly. Besides the standard health and hygiene aspects of the hotel business, we also doubled down on our focus on the destination and smaller boutique hotels — as more intimate retreats will become an even more relevant hotel category. We decided to postpone one opening in March to August, which was a wise decision in hindsight. The hotel we opened in August, Aethos Saragano, has been off to a great start with many Italians looking for an authentic hotel that allows them to recharge their batteries after a painful lockdown. In many ways, some aspects of our strategy didn’t change at all — such a focus on well-being, healthy food, mindfulness, etc., but rather became even more important.

You are planning on sharing your experience and views on real estate investments with a live audience in Germany and Switzerland. Why?

Even though COVID has made many things harder in our line of business, we can’t just talk on Zoom. Nothing replaces face to face interactions, as it’s a relationship business, after all. Families entrust us with their hard earned capital to invest, so naturally, we have to get to know each other, exchange our experiences, concerns, and answer as many questions as needed. It’s a volatile time, and there is fear everywhere — the only way to make a cool-headed, strategic decision is to have a dialogue and learn from each other's experiences.

Who are you going to address, and what can the audience expect?

We will address mostly peers. Successful entrepreneurs from various business backgrounds that are looking to invest alongside other successful entrepreneurs. It’s not all about the IRR but also about the network. We host these events many times a year, from the World Economic Forum in January, to small events at strategic locations throughout the year. This is a special series as the topic is so time-sensitive. The audience can expect to learn a lot about the current state of the real estate industry in our core markets Italy, Mallorca and Portugal, and get access to investment opportunities in these markets that promise to become extraordinary investments, with a focus on capital protection and high risk-adjusted returns. And, of course, excellent food and wines, given we are hoteliers after all.

In addition to a series of luncheons for investors in

- Geneva on October 1st

- Zurich on October 6th

- London on October 8th

Benjamin Habbel is hosting a Virtual Investors Meetup for family offices and private investors who cannot attend the lunches and wish to learn more about Limestone Capital and its projects.

Limestone Capital Investors Meetup

13 October 2020

14:00 - 15:15 Central European Time

Please register here: https://bit.ly/3j1ZxuA

207 views0 comments