David Redfern, Consolidated Holdings President, Majority Owner of the New WaterWalk Franchise
- Nov 25, 2014
Houston—A new residential franchise will be arriving in 2015 in select cities across the United States. Real estate pioneer Jack DeBoer, the man behind the extended-stay and all-suite hotel industry, recently announced the company’s fifth franchise, WaterWalk Hotel & Apartments, a new project that combines the features and amenities of the extended-stay hotel industry with those of apartment ownership.
The idea for a new franchise was spurred by the tremendous success of DeBoer’s WaterWalk Hotel in Wichita. In the first months after opening, the WaterWalk was fully booked. The concept has generated so much interest that plans are already underway for new WaterWalk hotels in Houston; St. Louis; Charlotte, N.C.; Indianapolis; Atlanta; and Louisville, Ky.
MHN talks to David Redfern, president, Consolidated Holdings, which is the majority owner of WaterWalk Hotel & Apartments.
MHN: As Vice President of Sales and Marketing for Candlewood Hotel Company, you helped the firm grow from one Candlewood Suite in 1996 to 125 in 2003. In five years’ time, where do you see WaterWalk as a franchise?
Redfern: Mark Skinner, CEO of The Highland Group, a consultancy and extended-stay industry analyst, has projected WaterWalk will exceed 400 locations nationwide. Given the brand’s early results and the banking industry’s acceptance of this multifamily product-type, WaterWalk shows promise to reach over 400 locations, and potentially do so within the next five years.
MHN: In the third quarter of 2014, Houston’s average rental rate reached the all-time high of $1.05 per square foot. Considering your business model, how do you think WaterWalk will fare in the Houston market?
Redfern: WaterWalk is specifically designed for markets like Houston! WaterWalk Hotel & Apartments is designed to meet the needs of those going through corporate relocations, training, or long-term projects assigned by large and growing companies. Houston alone houses 26 Fortune 500 companies, 103 Fortune 1,000 companies and consular offices for 92 countries, all of which have demand for a lodging establishment like WaterWalk.
MHN: What makes WaterWalk a better investment option considering the competition?
Redfern: As the first national franchised apartment brand WaterWalk achieved 83 percent occupancy within weeks of opening its first property and was appraised for $4 million more than its $12.4 million cost in just two months. This new hybrid property type commands the higher revenues of an upscale extended-stay hotel and the financing and reduced operating expenses of an apartment building. Thus, WaterWalk receives a higher loan to value ratio from being a multifamily product and receives lower cap rates on sales and renovations. Franchisees also enjoy the zoning flexibility, financing leverage, and resell advantages of multi-family properties. This product has options. The ratio of furnished to unfurnished apartments can be adjusted depending on market demands. Alternatively, it can easily be transitioned into singular uses like an extended-stay hotel or an apartment complex.
MHN: No product or brand is perfect. How do you plan to improve the WaterWalk franchise in the future?
Redfern: The WaterWalk Hotel & Apartment concept wasn’t innovated overnight, but developed over time in order to continue advancing the extended-stay and multifamily industries that our founder, Jack DeBoer, has been helping lead for decades. As the brand moves forward we will continue to find new ways to deliver more revenue to each WaterWalk location—looking at opportunities among guests who need furnished apartments and residents in search of unfurnished apartments. We know from experience that franchises are only successful if the franchisee makes money, and we are focused on delivering revenue and being extremely efficient in our product and operations.
MHN: How would you describe your corporate culture?
Redfern: WaterWalk Hotel & Apartments believes in and delivers on our interpretation of the Golden Rule; that is, treating others the way we would want to be treated. We take care of one another with the belief that our guests and residents will recognize and benefit from this type of respectful corporate environment.