Patrick Deming has spent 20 years working in real estate in Los Angeles. He has been involved in the sale or financing of many notable hotel projects, including the Fairmont Miramar, Shutters on the Beach, Hotel Casa Del Mar, Terranea Resort, Langham Huntington Pasadena, Loews Hollywood and, most recently, London West Hollywood. Deming, who works in the Santa Monica office for Eastdil Secured, said L.A. hotel projects make up about 35 percent of his office’s volume.
When and how did you get started in the hotel business?
I first started working in the business through an operational internship at a large hotel during my senior year in high school, and then I pursued a hotel administration degree in college. I was inspired to enter the hotel business by my maternal grandfather who enjoyed a successful career in hotel operations and marketing.
What do you like about the Los Angeles hotel market? How does it compare to other major U.S. markets?
The Los Angeles hotel market benefits from a diverse mix of demand generators in the corporate, group and leisure space: Attractive long-term supply and demand dynamics; superior visitor serving infrastructure; and scenic beauty with year-round temperate weather.
What makes hotels a good investment now? How long do you see the construction boom lasting? Why?
For the most part, hotels can still be acquired at a discount to replacement cost, and most sub-markets within L.A. County still present substantial barriers to new supply. As an investment, hotels can provide higher yields than other forms of commercial real estate. The construction boom, primarily concentrated in downtown Los Angeles, can be expected to last several more years, though there still remain substantial regulatory, physical and economic barriers to entry in many of the key West L.A. markets.
What is the most challenging part of putting together a hotel transaction?
The most challenge aspect of hotel transactions typically involves the operating nature of the business. Transactions involve not only the real estate being transferred but also the operating business, which includes assets and potential liabilities attributable to personal and intangible property, employees, operating licenses and permits, inventory, brand names and often hotel management agreements.
What is the most rewarding?
Due to the complex operating nature of hotels, it takes a full team approach from ownership, management, broker, respective legal counsel and the buyer to consummate a transaction. Working together with all these disciplines is the most rewarding aspect of most transactions.
What is your favorite hotel that you have not been part of?
There are so many great hotels in Los Angeles, but my favorite hotel is a little further north – Ahwahnee Hotel in Yosemite National Park. As a native of the Sierras, I love the hotel’s pristine setting combined with the classic California architecture and design. Enjoying an early evening drink on the back patio of the hotel is definitely memorable.
– Bethany Firnhaber
