Wolfgramm Capital is a real estate investment firm specializing in hotel acquisitions and management, while also seeking, acquiring, and developing opportunistic and ground-up mixed use, residential, and suburban master-planned projects.
The following description of our company describes our approach to real estate investing and outlines our pathway to success, covers our investment thesis and how we manage the inevitability of real estate cycles, our corporate culture and how we hire to ensure adherence to our high standards, our core values, and how we protect investor capital by keeping an eye on the downside.
Some might say that hospitality is in our DNA. And that’s no stretch. Our core ownership team includes a father-son duo who has been working in and around hotels for decades. Co-founder and COO Koloa Wolfgramm started walking properties with his father as a child. His father, Phil Wolfgramm, worked his way up within the industry – from a night auditor job while working his way through law school to general manager, and eventually on to leading acquisitions and building hotels– and always had Koloa in tow. Co-Founder Russ Handy consulted on many of those deals and had become one of the most prolific hospitality lawyers in the nation. This early foundation would be the launching pad for Wolfgramm Capital nearly 30 years later.
A bit about us….
Join the waitlist for our next investment opportunity and learn more about our unique approach to hotel investing.
The Road to Waldorf
Given our intimate familiarity with the hotel industry, we saw an opportunity to capitalize on the downturn brought on by the COVID-19 pandemic. By late 2020, hotel occupancy had dropped by more than 50 percent in some areas. International travel bans, a sudden halt on all corporate travel, and general market uncertainty meant that hotels were struggling.
Further, many hotel owners and operators were new to the business. We purchased the Waldorf in 2022, which happened to be banner years for the hotel industry. Some multifamily investors bought their first hotels during this time as they sought diversification into a different asset class, but lacking the unique operational experience needed to manage hotels, found themselves unable to weather the economic storm.
The hotel industry had been battered, but we were bullish about the sector’s recovery. During this watershed moment in the real estate market, Koloa, a graduate of Yale law school with experience in private equity and venture capital, approached his father, Phil, and his uncle, Russell Handy, and together, launched Wolfgramm Capital to capitalize on this distress.
They wasted no time. Their first deal was acquiring a portfolio of 500 hotels rooms in Texas worth over $40 million. Other deals started flowing in immediately thereafter. We narrowed our focus to select-service suburban hotels like the Courtyard Marriott or Residence Inn outside of large MSAs, as these provide steady cash flow and strong cash-on-cash returns. This type of hotel weathered the pandemic exceptionally well, providing a lower risk entry into the distressed hotel market. Occupancy came down during Covid, but not as severely as it had for full-service or luxury hotel properties.
Of course, the downside to investing in more stabilized limited-service hotels is that these properties do not experience massive exit multiples through forced appreciation . So, to balance the portfolio, we began looking at high-end luxury hotels, value-add situations, and situations that would implicate our deep construction experience.
In August of 2023, the company closed on our first luxury hotel: the Waldorf Astoria in Park City, Utah. In doing so, Koloa became the youngest Waldorf hotel owner in the United States. Almost overnight, Wolfgramm Capital became a known player in the hospitality market. There are only a dozen Waldorf Astoria hotels in the United States and the approval process to become a Waldorf Astoria owner is notoriously selective. This pivotal acquisition elevated the company; we were officially on the map.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss "The Road to the Waldorf'
Our Investment Thesis
At Wolfgramm, our investment thesis is a dual-pronged ‘barbell’ strategy where we invest in both limited-service and luxury hotels in a way that provides strong, risk-adjusted returns for our partners. We target limited-service given our ability to stabilize these properties and implement industry-leading management, thereby increasing cash flow and cash-on-cash returns. We own our own property management company, Wolfgramm Properties, and we pride ourselves on being able to run hotels more efficiently—and more in alignment with ownership interests—than any third-party operator. This allows us to the most granular level of control over a property. Meanwhile, we invest in luxury properties given our ability to execute strategic value-add improvements that can drive substantial appreciation.
Our focus on hospitality stems, of course, from our collective background in the industry. However, we are also bullish on hospitality given its built-in hedge against inflation even in comparison to other commercial real estate investments.
For example, someone who owns an apartment building may be able to make improvements that increase the property’s profitability. However, hotels are fundamentally different in that they consist of both real estate and an entire business operation. We can make improvements to both that drive revenue. Also, hotels are unique in that rental rates can be adjusted daily (even hourly) as desired and can provide an antidote against inflation in ways that a year-long lease, for example, cannot. In periods of rapid inflation, long-term fixed leases (even with built in escalators) can often lag the actual inflated costs. Hotels’ ability to react quickly to rising inflation allowed one of our hotels to increase its daily rate by over 30% in the same period of time that inflation rose by 9%.
In one recent example, we were able to tighten up operations and drive revenue from $2 million to over $3 million in less than 16 months without any CapEx investment—that is virtually unheard of with other property types. Our ability to streamline operations created instant value.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss the Wolfgramm Investment Thesis
How We Manage Real Estate Cycles
While Wolfgramm Capital, as a company, is new, our team has the benefit of having weathered many other economic cycles. Phil Wolfgramm was working in the industry back in the 1990s when the Japanese stock market crashed and there was a widespread sell-off of hotels among Japanese investors. His company responded by investing in these assets during the downturn, repositioning them, and then maximizing profit for the ownership entity.
There was another major, but short-lived, downturn in the aftermath of 9/11. People were scared to travel and there was concern that large hotels in tourist and/or corporate destinations could be targeted for attack.
The more prominent cycle occurred in the aftermath of the Global Financial Crisis in 2008-2010. Here, we experienced a massive recession that many hotel operators simply could not weather.
With each downturn, it is important to understand the underlying themes of inflation, interest rate, and other factors at the macroeconomic level that impact the sector more holistically. Phil Wolfgramm takes pride in the fact that his hotel portfolios have never lost a single penny in investor dollars during these turbulent events over three decades.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss how Wolfgramm Capital manages real estate cycles
The Wolfgramm Avatar
There are two main hotel owner avatars: the first is of the immigrant owner who moved to the U.S., lived in a budget hotel, worked at the property, and then went on to own and operate it. The second is of the high-end investment firm or others from Wall Street who invests in luxury properties or large portfolios of hotels and outsource the management to a third-party operator.
At Wolfgramm, we bridge both these avatars.
Yes, we are an immigrant family and yes, Phil Wolfgramm, from Tonga, got his start working at a Holiday Inn and eventually worked his way up the corporate ladder.
At the same time, Koloa Wolfgramm grew up in hotels that his father worked at and became a Yale-trained former tech founder and Wall Street investor who now works alongside long-time attorney and business owner, Russell Handy. This team has worked alongside investment bankers, high-tech financiers, venture capitalists, and more.
We play in both spaces – limited service and luxury – with ease. In fact, the dual nature of our business makes us more informed and stronger with each respective product type. We can take lessons from one end of the spectrum and apply it to the other, allowing us to realize not only operational improvements but a higher-caliber guest experience.
Wolfgramm’s Corporate Culture
At Wolfgramm, we believe in giving all our employees an opportunity to do well and succeed. Phil Wolfgramm was 7 years old when he first came to the United States. Someone gave him an opportunity and he maximized it. He and so many of his colleagues started small, working the grounds, running the night audit, managing the first desk, providing security, or working in housekeeping. We have similar employees today. And we want to do right by our employees by giving them similar opportunities to climb the corporate ladder.
We recognize that these jobs are our employees’ livelihoods. Their paycheck is what puts food on the table and ensures their children have a new backpack and new shoes each school year. We take our responsibility for our team members to heart and work tirelessly to ensure that our corporate decisions are being made with their well-being in mind. We want them to be safe, to be happy, and importantly, to have upward progression.
To that end, we provide robust training for our employees. We like to promote early and often. This makes us collectively stronger. The more skilled they become, the more likely they are to progress within the company. The happier they are, the higher-caliber service they will provide for guests, which improves the guest experience. We want our hotels to be where guests make exceptional memories. Our company culture creates a virtuous cycle where we all benefit.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss how Wolfgramm Capital's corporate culture
How to Hire Right
Hiring the “right” people is a continuous learning curve. Our hiring process is highly structured and pointed. We identify the criteria (hard and soft skills) that a candidate needs to be a good fit for a specific role, and then rank each candidate against those criteria. Our rubric allows us to rank candidates on a scale of 1 (well below average), 2 (below average), 3 (above average), or 4 (well above average). We have intentionally eliminated the “middle” ranking because we want to be thoughtful about how each candidate fairs against the criteria – they are either above or below average, but never simply ‘average.’ Otherwise, it becomes too easy to classify people as falling somewhere in the middle. If we cannot tell where someone falls initially, we continue to ask probing questions until we can truly ascertain whether they are above or below average for those criteria.
We index strongly on those who have “4s” because our goal is to have a world-class team of exceptional people; that is what differentiates us from our competitors.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss the Wolfgramm Capital approach to hiring
Our Core Values
Transparency, radically aligned incentives, and creativity are at the core of what we do here at Wolfgramm Capital.
Transparency is one of our core values that we cannot stress highly enough. We care a lot about our investors having conviction in the investments we make, and to that end, we are open and forthcoming with all of the due diligence we have done on the deals. We are transparent about risk factors, how we plan to mitigate those risk factors, and the potential outcomes if we fail to do so. At the end of the day, we want our investors going into each deal with eyes wide open and feeling confident that they have made a wise decision.
To that end, we believe in having radically aligned incentives—something we have found to be unique to our company and operating model in the hotel space. Typically, in every deal, we are the largest investor. Rarely is there an investor that has more money in the deal than us. That provides comfort to investors; they know that if something goes sideways, we are most likely to take the biggest loss compared to other equity investors.
Lastly is creativity. We try to be thoughtful and creative in the way we do our jobs. This includes creativity in how we operate our hotels, creativity in how we handle financing, value-add strategies, and more. We tend to challenge the status quo and look for innovative ways to improve our holdings on behalf of investors. We believe we can always find creative ways to deliver even more exceptional results.
Watch Koloa Wolfgramm, Co-Founder and Chief Operating Officer discuss Wolfgramm Capital's core values.
Conclusion
The recent ascent of Wolfgramm Capital is no accident. Our core team has robust hospitality, finance, and legal experience that allows us to think critically but creatively about each opportunity that crosses our desks. We use the lessons learned from operating both limited-service and luxury hotel properties to improve our entire portfolio, thereby enhancing the guest experience while extracting industry-leading returns for our investment partners. While we may be “new” as a firm, we are long-time professionals who remain excited about the opportunities that lie ahead.
