Executive Spotlight: Raoul Thomas, CGI Merchant Group
- Apr 14, 2015
Raoul Thomas is bullish on Miami’s future.
The CEO of CGI Merchant Group, which has several prominent projects underway in Miami and Coral Gables, sees the city as an international destination – not just for tourism, but for investment and development.
“I think that as Europe comes back in force, Miami is only going to get stronger. Miami is going to become one of the premiere gateway cities in the U.S., comparable to New York,” Thomas told Commercial Property Executive.
CPE talked with Thomas about his ongoing projects, which include bringing the first ME by Meliá Hotel – an international lifestyle resort chain with a strong track record in Europe — to the U.S.
CPE: ME by Meliá will open its first North American property at your property at 1100 Biscayne Blvd. Why did you select them to operate this hotel?
Thomas: They are not a typical brand. At every corner you have a Marriot, a Hyatt, or a Starwood. We were enamored by Meliá. Their ME brand was new; they had just opened ME London, which is the strongest lifestyle and luxury hotel in that city. They’ve now expanded to nine cities across the world, including Ibiza, Milan, Dubai, Madrid, and Caracas. It’s turned out to be a brand comparable to the W Hotels of the world.
CPE: I understand there were some challenges with the hotel property when you bought into 1100 Biscayne. How did you resolve those?
Thomas: The hotel was flawed because there were only 56 rooms in the property, so it was difficult to attract a major manager. We saw the opportunity to reconfigure some of the rooms, as rooms on certain floors of the hotel were oversized, up to 1800 square feet. We were able to extract an additional three rooms from each floor, from floors 5-11, and there were also 14 vacant townhomes that were being sold as residential units, which we purchased. Each townhome had three levels, all cascading around the pool. They were ideal to incorporate into the envelope of the hotel rooms. We extracted 42 rooms from those 14 townhomes, which brought us to 129 rooms.
CPE: And the Miami HEAT has designated this as their preferred hotel?
Thomas: Yes, we’re right across from American Airlines Arena. That took six months to get approved, because we needed to go through the collective bargaining requirements of the NBA. The partnership will give the property great visibility in the community.
CPE: You’ve also invested in a marquee property in Coral Gables, 55 Miracle Mile. What changes have you made there?
Thomas: We decided that we wanted to have a footprint in Coral Gables and even though we would be paying a premium for this asset because we were buying from a highly qualified institutional investor like Fortress, we saw value. Our strategy is local ownership, local management and local investors. We were able to capitalize on that plan by increasing the value of the property by 15 percent in just over a year. Vacancy is down, rents are up, and the feedback from the homeowners association, which manages the 298 units above us, is a resounding endorsement.
CPE: What is the overall size of your Florida portfolio?
Thomas: CGI Merchant Group is currently managing more than $400 million worth of assets in the South Florida market. We have been very selective of the properties we buy in the city. We are opportunistic, but at the same time very selective.
CPE: You’ve lived and worked all over the world. What prompted you to call Miami home?
Thomas: I have an international background, but most of my professional career has been centered in Miami. This city is at the crossroads of two hemispheres, and allows access to Europe as well as Latin America. I’ve found the best of both worlds. Many of my partners, from a capital perspective, are global. I have investors from Latin America, from Canada, and roots that go into the Miami community. Miami happens to be one of the most exciting, emerging gateway markets in the U.S.
CPE: What do you see for Miami’s future?
Thomas: I have a very strong outlook for Miami. A lot of the new investment and development is coming from equity capital. We continue to have a strong Latin American/Caribbean influence. As European economic recovery and investment comes back in force, Miami is only going to get stronger. I think Miami is poised to become one of the most exciting cities in the world.