New England Patriots wide receiver Torrance Small will soon be keeping an eye on more than his touchdown stats. Having recently reached agreements to build several Wingate Inns hotels, the NFL veteran no doubt will be familiarizing himself with revenue per available room (RevPAR), average daily rates (ADR) and other hotel industry numbers.
In this foray into the hotel business, Small has teamed up with former NFL player Tyrone Leggett. Their company, Unity Development LLC, has inked franchisewith Parsippany, N.J.-based Wingate Inns International Inc. to build seven hotels. The first hotel is scheduled to break ground by the end of this month in Lewisville, Texas, and open in July 2002.
So, what are these football players doing in the hotel business? Many NFL players don't have much more on their off-season agendas than tee times, and some have become more famous, or infamous, for brushes with the law than their achievements on the field. Small said he decided to enter the real estate business to line up a second career for himself after his football days are over. He also hopes he can boost the image of NFL players by becoming successful in real estate.
“I think outside of football, people don't understand the players. They just see the bad,” Small said. “We think this will be good for the NFL and professional players, and give people a chance to see that there are some positive things going on, that it's not all negative.”
Geared toward business travelers, Wingate Inns is a mid-market chain that was launched in 1996. Small said one of the qualities that attracted him to the brand is that all of its hotels are new builds, as opposed to renovated or retrofitted properties.
“We walked through some Wingate hotels with a couple of marketing guys, and found out they have a lot of great amenities to offer,” Small said. “The rooms are bigger than most rooms. It's new— everything is new.”
Small and Leggett, who are co-owners of Unity, will be 100% owners of the hotel properties. However, they won't manage the hotels. The partners picked Kansas City, Mo.-based Sunway Hotel Group to operate the properties largely because its owner, Don Culbertson, has 30 years of experience in the hotel business. He also is a partner in Unity Development.
The partners have set up their company to encourage other NFL players to enter the hotel business. By investing a minimum of $100,000, players can become partners with Unity Development in a Wingate project.
Small said he has yet to partner with any other players, but his sales pitch has generated some interest. “We're trying to recruit players. We're getting a lot of response now,” he said.
Life after football
Although real estate investors tend to view the hotel sector as perhaps the most volatile property type in commercial real estate and vulnerable to fluctuations in the economy, Small might find the business to be more stable than his career in the NFL. Despite racking up impressive stats, including 681 receiving yards in 1988 and 655 receiving yards in 1999, he has bounced around to five NFL cities in his nine-year career. This summer, he will suit up with the New England Patriots, which recently signed him as a free agent from the Philadelphia Eagles.
Despite the fears that the current recession will result in a steep decline in business and leisure travelers, New York-based analysts PricewaterhouseCoopers predicts RevPAR will grow by 2.1% this year in the wake of near-record revenue increases in recent years.
Small is excited about his second career. Although NFL players receive whopping paychecks, their careers often last only four or five years. Small expects the hotel business to provide a healthy income for himself, his wife, Denise, and daughter, Kayla, long after his NFL career comes to an end.
“This helped me decide what I wanted to do after football,” Small said. “A lot of guys go from high school to college to the NFL, and they don't have work experience to get a job and make the money they've been earning and to keep the lifestyle they're accustomed to.”
Culbertson thinks the two partners are investing their money wisely. “I see it as Torrance sees it, as an opportunity for players who really need something today to put some money into, but also need something for tomorrow when they stop playing the games.”
Culbertson has heard plenty of hard-luck stories about professional athletes who run out of money after they hang up their jerseys for the final time.
“Thousands of ex-football players have come out of the NFL still having some money, but when they have to start looking for a job they wonder, ‘What are we going to do now?’ Eventually, that money goes away, and they end up working at places that aren't to their liking,” he said.
The five-member Unity Development team can provide players the expertise and information needed to invest in hotel projects, so they don't have to start from scratch when entering business.
“When they get out of playing football, we hope they can take a more active interest in the company,” Culbertson said, referring to the possibility of partners becoming more involved in putting investment deals together and perhaps even managing properties after they retire.
The blitz is on
Unity Development isn't entering the hotel business halfheartedly. Based upon the company's current construction schedule, it will have seven hotels in operation by March 2005.
In addition to the 100-room Wingate Inns project in Lewisville, Texas, scheduled to break ground this month, Small and Leggett plan to break ground in Bentonville, Ark., in September; Fort Myers, Fla., in January 2002; Houston in July 2002; Rockwall, Texas, in January 2003; Austin, Texas, in July 2003; and Woodbridge, Ill., in January 2004. Each hotel will feature approximately 100 rooms and open about one year after the start of construction.
Small and Leggett have no plans for hotels beyond the seven Wingate properties, but they may add other Wingate projects to the list if they discover good opportunities. The duo also is considering ventures into other property types besides hotels.
“We're starting with hotels, and they might open up the doors to other real estate opportunities,” Small said.