Local Hotelier targets Los Angeles for next opportunity
Midas Hospitality has been tapped to develop a hotel in the Los Angeles area, marking a shift in strategy from the company’s focus on undeserved markets.
Midas will co-develop a $25 million, 107-room Residence Inn in Lancaster, California, after the brand’s parent, Marriott, referred Midas to the local developer, InSite Development. The project is currently in the pre-development stage, but Midas will manage the hotel once complete, co-founder J.T. Norvillesaid.
The Maryland Heights-based company developed a niche building and managing hotels in under served markets like Kentucky, Ohio and the Carolinas, which helped to push Midas to one of St. Louis’ largest privately held companies with $124.8 million in revenue last year. And Norville had said in 2018 that “you’re not going to see us in Manhattan or Chicago.”
But Norville said the Lancaster project was appealing because it was a Residence Inn, one of the strongest brands in Midas’ portfolio; the area is home to a major aeronautics market with companies like Northrup Grumman and Boeing, as well as Edwards Air Force Base; and its location within an “opportunity zone,” which allow investors to reinvest capital gains in federally designated economically disadvantaged areas.
“It’s a good investment opportunity for our investors,” Norville said.
Midas is launching an opportunity zone fund and is aiming to raise $12 million for the Lancaster project. Its first OZ fund in Midtown raised $35 million in four months.
With any of its markets, Midas will seek out more opportunities.
“Whether third-party management or continued ownership, we will want to scale out in the greater Los Angeles area,” Norville said.