SUN DEVELOPMENT BANKS ON THE NEW
With six hotels in the pipeline and a Sun Development and Management portfolio approaching 30 properties, Indianapolis-based lodging magnate Bharat Patel is “busy, busy, busy.”
Bharat and his brother, Harshad, founded Sun in 1989 in Indianapolis. Most of Sun's hotels are limited-service and all but six are new-builds. And new-builds are all Sun will develop in the future, Patel says. The six acquisitions Sun made last year present challenges his closely held company doesn't want to deal with, he says.
The only advantage to acquisition is cutting down on development and construction time, he says. But existing properties come with “a lot of baggage,” including employees conditioned to another culture, and depressed income streams. “You have to employ all your best people to turn the property around,” he says. “It doesn't measure up to new development. We are going to stay on course with new development only.”
At present, Sun is about to build one Candlewood, two Hampton Inns, three Hilton Garden Inns and a Courtyard. Construction will begin on three this year, and Sun will develop and manage all of them.
“We have grown this company by building everything new, and out of 27 hotels, we have built 21 ourselves,” Patel says. “We also do third-party construction for other hotels.”
The branches of Sun are development, construction and management. Three people work in development, 16 each in the other two branches. There is no overlap, but the branches “pass the baton,” he says. Goals and responsibilities are well defined and loyalty is a key value.
“A lot of our employees have been here since Day One, and we have minimum turnover at management level,” he says. He notes that Sun Development offers its nearly 1,000 employees health insurance, vacation and a 401k program that's totally company-funded.
“Our culture is passion, loyalty and teamwork,” Patel says. “I coach and teach the company's culture.”
David Neff, of Chicago law firm Piper Rudnick, has worked with Sun on its real-estate acquisitions and considers Patel a “very impressive guy.”
“You get the sense that this guy is living for his company,” Neff says. Sun “is in all facets of hotel development, management and operations and it seems to do all the facets well.”
Mike Leven, president and CEO of US Franchise Systems, sold Patel Sun's first Holiday Inn Express. “He's a very talented builder,” Leven says.
How does Patel do that? “I wish I knew,” Leven says. “He's a great buyer and he's got a talent for finding ways to save money in the construction process. He picks good sites and does his own construction at very, very good quality levels.”
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