While most six-year-olds were spending their weekends riding bikes or playing with LEGO, Bleda and Anil Basegmez were touring construction sites. The families of these two cousins had long histories in real estate in their native country of Turkey, as well as in Germany, making the boys feel at home among jackhammers and cranes. At the same time, a continent away in Canada, Gaurav Gupta, was cultivating his own curiosity about hospitality ownership at the knee of his uncle, Ray Gupta, of Toronto-based Sunray Group.
As young men, all three worked for their respective family’s businesses, learning about assets, operations, staffing, construction and deal-making. When the Basegmezes decided to expand into Canada, they acquired the Delta Toronto East Hotel in 2014. When they sold that property a few years later to the Sunray Group, it put the two real-estate giants in each other’s orbit. The aspiring young moguls soon clicked over the same ambitions and ideologies and, in 2019, formed their own company, Montreal-based SageBlan Investments.
The new partners quickly assembled an executive team of 20, mostly 30-somethings like themselves, half of whom are women. “[They’re] strong individuals, young and motivated, who want to make a difference in this industry,” says Gupta on a call with his colleagues from Bodrum, Turkey, where they were on a working vacation. “We’re creating a company culture that we’re very proud of. All of us put in our individual efforts and come to the office extremely excited about what we’re building and the future of SageBlan.”
As for the trio at the top, Bleda says, “Coming from two separate continents, from very different cultures and backgrounds, from the moment we came to Canada, Gaurav was one of the first good friends we made. But since then, our ideology, our family backgrounds have been a very natural fit. In a lot of meetings and decision-making, when we share ideas, there’s always alignment.”
Wasting no time putting that alignment to the test, the three sunk roughly $150 million into the acquisition and renovation of four Quebec properties, encompassing 1,000 rooms and approximately 500 hotel staff. Their first purchase, in June of 2019, was the Hôtel Plaza Valleyfield, a 127-room waterfront property in suburban Montreal that was originally built in 1901 as a cotton mill.
“It has tremendous history in the town,” says Gupta, who plans to re- position the property into an independent boutique hotel that will retain the cotton mill factory style and design. “Just through under-utilization and mismanagement, it was overlooked for quite some time.”
In fact, under-utilized and mismanaged buildings are the partners’ stock-in-trade. “If the property has been overlooked or mismanaged, has absentee ownership, that’s where we find the most opportunity,” says Bleda.
A few months later, they made their largest purchase — the 354-room Hôtel Place Dupuis in downtown Montreal, which they’ve been converting into a Hyatt Place, due to open in December. “This is a very large undertaking,” says Gupta. “It’s a 30-storey tower that’s connected to the only underground metro where all three lines connect. It’s been approximately a 15-month renovation, [costing] approximately $25 million. We’ve carved out some space on the ground floor for a standalone Starbucks that has an exterior entrance but is also connected to the hotel. We’re really excited that this will be our first large completed asset in the portfolio.”
Then came the pandemic, which threatened to derail that excitement — and their high-speed train of investments. “We were in unchartered waters,” says Bleda. “[It was] an experience for all of us, managing all stake holders, including the lenders, the financing partners as well as the brand; it was quite challenging.”
But the young hoteliers’ philosophy of “tough times build tough character and strong partnerships” kept them on track. “When you go through these types of closings, which are challenging, you build strong relationships with your lenders and the brands alike,” says Gupta. “When they see what you’re able to do during low levels of business and how you’re able to pivot and bring these assets to life, it speaks to the management company.”
So, undaunted, during that chaotic summer of 2020, SageBlan acquired two more properties in la belle province: the 148-room Vogue Hotel Montreal, which will be Canada’s first hotel to fly under Hilton’s Curio Collection banner once renovations are complete this fall; and the 377-room Delta Hotels Quebec by Marriott. Ever mindful that COVID-19, in some form, is here to stay, the company is incorporating pandemic-related protocols in all its properties, among them QR codes and mobile check-in. “[In addition], for the Vogue Hotel, we just launched the Clear Air and Water Purification system,” says Gupta. “It’s a military-grade air- and water-purification system in all the guestrooms, corridors and public spaces, that cleans up to 99.9 per cent. That will be a SageBlan standard that is over and above the brand standards already in place for COVID.”
All that’s left is to fill those clean rooms with warm bodies, which assumes tourism bounces back to pre-pandemic levels. The partners are optimistic, especially since Americans were welcomed at the border late this summer and international tourists followed in September. Corporate travellers, on the other hand, have been largely MIA.
“But we believe 2022 will be a better year, possibly at 75 per cent of 2019 levels, which was a peak year for us,” says Gupta. “Without sugar-coating it, it has been a very challenging 20 months to enter into as a new hospitality company — getting hit with COVID after making these transactions and closing them and then finding ways to stay afloat as well as go through renovations . . . it has not been an easy time. But we see a recovery for the hospitality market in the long term, and we believe strongly in the investments we’ve made in Quebec.”
As for any pearls of wisdom he might offer other developers still struggling through these tough times, he says, “It just takes perseverance and pivoting, not taking no for an answer, leaving no stone unturned, and always finding unique solutions to problems.”
Sounds like Sage advice.
Written by Robin Roberts
