Genghis Hadi

You’re active in both South Florida (we’re thinking of the Raleigh Hotel project) and the L.A. area such as the Rosewood Residences Beverly Hills. Compare and contrast those two markets.

They’re almost opposites, which is part of what makes working in both interesting. Beverly Hills is an extraordinarily mature luxury market. There’s an established definition of quality, scarcity and value, and the challenge is to create something exceptional within that context. Miami is much more dynamic. The city is still defining what it wants to become, and there’s an energy that comes with that.

But, at the very top of the market, buyers in both places are surprisingly similar. They’re sophisticated, global and increasingly uncompromising. They don’t just want an expensive apartment. They want something they couldn’t easily find again.

What’s the hotel development market like now? Is the post-pandemic demand sustainable with the dropoff in international tourism?

I’m probably more bullish on truly exceptional hotels than on hotels generally. There’s an important distinction.

Travel has become more experiential, and the best hotels increasingly function as restaurants, clubs, social spaces and cultural institutions as much as places to sleep. At the same time, they’re extraordinarily difficult and expensive to build, which creates real barriers to new supply.

That doesn’t mean every luxury hotel works. Quite the opposite. I think the middle is a difficult place to be. But, if you can create something genuinely special, in an irreplaceable location, I believe there will always be demand for it. The hard part is actually creating it.

How do you pick a location for a new luxury condo? What are the prerequisites?

We start with a fairly simple question: Can this be replicated? Location matters enormously, but scarcity matters even more. We look for places where the combination of the site, neighborhood, views, architecture and lifestyle would be very difficult to reproduce.

The other test is whether we would personally want to own there. Luxury real estate can become overly analytical — you can build a spreadsheet to justify almost anything. But, at some point, someone has to walk into the building and fall in love with it.

Our best projects tend to have both: an investment thesis that makes sense on paper, and something emotional that doesn’t fit neatly into the spreadsheet.

Where’s your financing coming from? You have a long background in private equity.

I spent seven years at the Carlyle Group before starting Nahla, so institutional capital is very much part of my DNA. But one thing I learned in private equity is that the capital structure should serve the investment, not dictate it.

Our projects tend to involve a combination of private equity capital, institutional equity and traditional or private credit, depending on the opportunity. We’re less interested in finding the cheapest dollar than the right dollar.

Real estate development has enough ways to surprise you already. Your capital partners shouldn’t be one of them.

Any asset classes that you’re looking at? Or that you avoid? 

I’m less interested in asset classes than I am in circumstances.

We tend to gravitate toward complicated, high barrier to entry opportunities where design, development or repositioning can create value. If the thesis is simply “Buy this because cap rates will compress,” it’s probably not for us.

I also think specialization can occasionally become an excuse not to think. Some of the best opportunities appear when conventional investors say, “That isn’t what we do.”

That said, we have to believe we can add something beyond capital. If our only contribution to an investment is writing the check, somebody else can probably write it cheaper.

Is the opportunistic window open or closed? How long does it remain open?

It’s open, but it doesn’t look like the opportunistic windows people became accustomed to after 2008. There hasn’t been a universal clearing event. Instead, distress is appearing slowly and selectively as capital structures mature, loans need refinancing, and owners have to confront a very different cost of capital.

That actually makes the environment more interesting. The opportunities require more work to find and more judgment to understand.

I don’t know when the window closes, and anyone who gives you an exact date probably has a fund to raise. We’re trying to remain patient enough to recognize the difference between something that is cheaper and something that is actually a good investment.

Lightning Round:

Your AI platform of choice? ChatGPT for questions. Claude for analysis.

Who would play you in a movie? George Clooney. I assume I get to choose.  

One prompt you’d never give AI. “When is the end coming?”

Jalen Brunson or Aaron Judge? Brunson. New York loves an underdog — even when he’s no longer one.

“Oppenheimer” or “Odyssey”? “Odyssey.” I’m a developer. Apparently I’m attracted to projects that take 10 years to finish.

Tom Holland, Andrew Garfield or Tobey Maguire? Andrew Garfield. International, New York — and, of the three, most likely to have opinions about the façade.

Have you ever eaten pizza with a knife and fork? Yes. But only in Europe, where somehow it feels less criminal.

The most money you’ve ever spent on a hamburger? Whatever the burger costs at 4 Charles. Getting the reservation was more expensive.

Bank or non-bank? Whichever one reads the documents.

Last book you read? Currently reading Unreasonable Hospitality by Will Guidara. In our business, the title is practically a job description.

Borrowing costs — up or down in 2027? Down. I just won’t tell you by how much.

What was your nickname when you grew up/started out? I had a couple. None that I’m willing to put back into circulation.

How long do we have before AI kills us all? Long enough to finish the Raleigh, I hope.

Where’s your secret escape compound? (Think Peter Thiel’s New Zealand Plan B.) Nice try. The first rule of a secret escape compound is not publishing the location in Commercial Observer.