With a background in real estate and finance, Brian Nudd, WG’19, came to Wharton’s MBA Program for Executives to gain the skills and network to “take the leap” into entrepreneurship. A year after graduation, Brian took that leap when he joined classmate Joe Magliarditi’s, WG’19, venture, Gemini Hotel Group, as chief investment officer.
Working on class projects together at Wharton, Brian and Joe got to know each other very well. Brian recalled, “The first thing I noticed was how well Joe and I complement each other at a fundamental level. We share the same business philosophy and values, and we care about people and relationships. We view ourselves as creative people, which shows up in our work. We hit it off right away.”
Joe agreed. “As Brian and I worked together at various points in the program, I quickly realized that we share similar core values, in addition to always approaching business from a strategic standpoint. We are both inspired by attempting to execute complex business opportunities, while creating long-term relationships in the process.”
During school, Joe started running investments by Brian for feedback. After graduation, he continued those conversations and was struck by how well they worked together. When Joe decided to take Gemini Hotel Group to the next level, he called Brian. “We continued to analyze deals together and he recently came on board as my partner and chief investment officer,” said Joe.
For Brian, this role is fulfilling his goal of becoming an entrepreneur. “It’s very exciting. At this stage of the firm’s development, Joe and I are involved in every aspect of the business, so it’s entrepreneurial and rewarding,” he said.
Growing a Business During a Pandemic
While it may seem like a surprising time to start a business, Joe and Brian believe this is a good time to “stress test” their acquisitions.
Brian explained, “The targeted hold period for our investments is seven to 10 years or more, which is much longer than many real estate private equity funds. We target institutional-quality, select-service hotels that exhibit multiple durable demand generators and that are located in markets that exhibit strong long-term growth fundamentals. If a property is performing modestly well right now, that may be a signal that it fits our investment thesis. Of course, there are challenges to starting a business now, but Wharton prepared us to thrive in uncertain environments.”
He points to his Negotiations class as an example. “That course stressed the importance of searching for win-win solutions in negotiations and focusing on the interests of all parties. This philosophy is even more important during these tough economic times.” he said. “If we push too hard in this environment and operate with a mentality that someone else’s loss is our gain, we will lose a lot of good deals. After all, owners of high-quality hotels do not necessarily have to sell their properties right now. They can ride out the storm versus accepting a significant value discount. And after a deal is over and funds are exchanged, relationships endure. We value the relationships we have with the groups sitting on the other side of the table. That’s the difference: we are building a company and reputation, not simply a collection of hotels or investments.”
Joe noted that their Leadership class is particularly applicable now, as a big focus was leading in uncertainty. “We studied how various leaders managed different tragedies and economic shocks. The case studies emphasized communication, collaboration, and discipline, as well as the importance of being transparent.”
Despite the current environment, Joe and Brian noted that the company is in growth mode. In March, Gemini purchased a property that fits their investment thesis: a hotel located directly across the street from Children’s Hospital and Medical Center in Omaha, Nebraska. Founded during the polio crisis, the hospital is undergoing a large expansion, which is expected to nearly double the hospital’s demand for services, significantly benefiting the hotel.
“We’re in the middle of arguably the biggest financial downturn in the history of the country, but we bought this property because our investment thesis shows that once the crisis is behind us, we are confident the investment will generate very attractive returns for our capital partners.” said Joe.
Benefitting from the Wharton Network
Joe and Brian credit Wharton with their confidence and ability to grow the company. “The EMBA framework provided a natural launchpad for this business. And we are able to leverage the Wharton network. In almost every city, there is a Wharton alum on the ground who we can call and be confident that they will pick up the phone,” said Brian. “The same can be said for the involvement and support we receive from Wharton professors.”
Joe added, “You not only get a world-class education, but you get the opportunity to build relationships with the entire cohort. The pedigree and dedication of the professors combined with classmates who come from various industries and practically every part of the globe translate to a unique and invaluable experience. I walked away from this program with a new partner, ready to apply what we learned and experienced together. It’s no accident that the color of our logo matches the official Wharton blue.”
— By Meghan Laska
Posted: April 22, 2020