GF Management Founder Ken Kochenour Talks Growth

In early March, GF Management sealed the deal on its fifth acquisition in the last 28 months—the Westin Chicago Northwest in Itasca, Ill. The 408-room hotel, built by Trammell Crow, has more than 35,000 square feet of function space and is surrounded by a 3.5 million-square-foot office park. The Philadelphia-based hospitality management and ownership company plans to conduct a comprehensive renovation to reposition the Westin as the premier hotel in the western Chicago suburbs. “It was the perfect acquisition to fit into our national footprint,” says Founder Ken Kochenour. With 105 properties in its portfolio and total gross annual revenue of $540 million, GF Management looks forward to continued growth in acquisitions, as well as third-party management deals, asset management, and consulting.

How did you first get involved in the hotel industry? When I graduated from York College in 1974, I was a police officer for four years in Doylestown Township (Pa.). I had received federal grant money and worked it off over time. Then, after a year of doing private work, I got into the hospitality business. In 1987, I decided I wanted to create my own company. I found an individual who loaned me money to buy my first property in 1988—a Holiday Inn in Harrisburg, Pa. And from there, I built GF Management.

It must be gratifying to see the company grow? It really is rewarding. In large part, it’s because I have great people to work for me. I have such a strong group of senior management people. I have several senior executives who have been here for more than 22 years. They get the opportunity to buy into deals from time to time, which helps them on their longevity. I think one common denominator with my senior people is they all have an entrepreneurial flavor.

Where is the company headed? Since the company started, we’ve turned around, dealt with, or touched more than 500 properties in 45 states. During that time, one of things we became really well known for is the fact that we’ve done a lot of receiverships and turnarounds, small and large. But what I see us focusing on in the future is the core properties, the long-term third-party management contracts, and our owned properties. Most people don’t realize the size of the properties we own. For example, the 488-room Valley Forge Casino Resort in King of Prussia, Pa.; a 465-room Radisson in Rochester, N.Y.; the 393-room Hilton Charlotte University Place in North Carolina; and the 334-room Embassy Suites Orlando/Lake Buena Vista Resort in Florida.

Advertisement

What differentiates GF from other management companies? We’ve been doing this for 27 years, and we have grown our company into a national footprint with 105 hotels in 34 states. We’re one of the few companies that really understand full-service hotels and resorts, as well as limited-service properties. The fact that we own gives us the thought process and understanding of how to operate a property. We then take the expertise we use at our own properties and transfer it to third-party managed properties.

What’s behind the company’s long-term hold strategy? Because we’re great buyers and bad sellers [laughs]. We know how to run hotels, so it’s hard for me to let them go unless I’m getting top dollar for them. When you’re taking over an asset, it’s all about the buy. If you can run it, and you’re right on your market, it’s all about what you paid for. So we’re great buyers, but because we own and operate hotels, we’re more demanding on what we need for an exit price.

Does GF do well in good times and bad? We’ve seen many cycles come and go, so we’ve learned what works and what doesn’t work. We have a great fundamental deal model. We’re very good at workouts and receiverships, so when the economy gets bad, it’s good business for us, because we fit that niche. When the economy gets good, the stuff we own does extremely well, and that’s positive. In the middle, you have consulting, asset management, and third-party management, which we’re also very good at. So we have a balanced footprint and a balanced business plan.

Previous articleKimpton Hotels Earn GreenLeader Status
Next articleBranded Properties Prevail, According to New Report