The attraction of major hotel companies and financing sources prompted Condor Hospitality to move its corporate headquarters to Bethesda, Maryland, from Norfolk, Nebraska, where it was founded in 1978.
The shift, announced Thursday, will not reduce or change the duties of Condor's seven-person staff in Norfolk or the five-person staff in Omaha, Chief Executive Bill Blackham said.
"There's no effect other than the emotional thing, the prestige thing of not having the corporate headquarters here," Blackham said.
Jonathan Gantt, who became chief financial officer in October, will move to an office in downtown Bethesda. He formerly was in Stamford, Connecticut, as director of corporate finance for Starwood Hotels & Resorts Worldwide.
The Bethesda office "kind of puts you front and center in the mix of where the others in the industry already are," Blackham said, including Marriott International, Hilton Hotels and Choice Hotels International, and real estate investment trusts or REITs, like Condor.
When he is not traveling on company business, Blackham will work mostly from Bethesda but also spend time as needed in Norfolk and Omaha and weekends at his home in Cincinnati.
The Nebraska staff will continue to handle accounting, hotel management oversight, investor and public relations, legal work and other functions.
Blackham said operating expenses and salaries are relatively low in Nebraska, and the workforce is skilled and dedicated. "Why would you change that?"
Mark Zimmerer, president and chief executive of the Norfolk Area Chamber of Commerce, said it was a relief that the headquarters move will not affect jobs in the city.
"For a business to be successful, it has to make good decisions," he said. "However sad it is to lose someone, you want them to be successful, too."
"It's a little bit loss of image and prestige," said John Dinkel, a Norfolk farm equipment dealer who is a Condor shareholder and former board member. "But in reality, everybody's going to stay working and see what happens down the road."
Blackham said Condor will benefit from having its headquarters in the Bethesda area, which is 6 miles from Washington, D.C.
"A small publicly traded company looking to grow needs access to investment bankers and research analysts," he said. "When they come to visit other REITs and hotel companies, it makes it infinitely easier to having meetings with people who are coming to Washington, D.C."
Condor will hire a financial analyst for the new office and may hire two or three others there over the next two years, depending on Condor's growth, he said.
"You have a deep pool of hospitality specialists," he said, who can be hired without having to relocate. "It's easier to build the company."
In 2011 the City of Norfolk bought the company's office building for $1.75 million and converted it for city offices. Condor occupies leased space there and in Omaha.
Condor, formerly called Supertel Hospitality, has gone through a series of changes since the 2008 recession cut its occupancy sharply, causing losses and a plummeting stock price.
The company hired Blackham as CEO in March 2015, changed its name to Condor in July, raised $30 million in a financial restructuring in March and over the past year has been selling its budget motels, such as Super 8s, to buy higher-quality properties.
Condor lost $83 million between 2008 and 2014, a large share of that from writing down the value of its motels, before reporting a profit of $9.5 million in 2015 triggered by a noncash accounting gain.
The strategy of upgrading its hotel properties, which began under then-CEO Kelly Walters, is still in progress. Condor has 15 properties listed for sale and has purchased three of the upper-scale hotels it seeks.
Condor's stock price rose 1 percent to close at $1.94 on Thursday after the early-morning announcement.
Ron Kuykendall, a vice president with the National Association of Real Estate Investment Trusts, said he wasn't surprised by Condor's move to Bethesda.
"It has been a center of major hotel operations for a long time," Kuykendall said, traced in large part to Marriott International.
J.W. Marriott founded the company in 1927 as a root beer stand, entering the hotel business in 1957. His son, John W. "Bill" Marriott Jr., expanded the company into one of the largest in the world.
In 2009 Hilton Hotels moved its corporate office and several hundred jobs to the D.C. region. Hilton's CEO at the time was Christopher Nassetta, who grew up in the D.C. area and had been CEO of Host Hotels & Resorts, based in Bethesda.
Nassetta had cited the region's hotel know-how as an attraction.
"That market is a very sensible place for us to operate," he told the Washington Post. "We are obviously trying to attract and retain talent."
The Hilton move meant three of the world's top six hotel companies are based in the region, controlling 1.5 million rooms.
Maryland's laws are favorable for real estate investment trusts, a form of ownership that gained favor with investors and real estate-based businesses such as the lodging industry. Many REITs are incorporated in Maryland but have their headquarters elsewhere.
Real estate investment trusts can own hotels, but their tax status requires them to hire managers to operate the properties. They are required to pay most of their profits to shareholders as dividends.
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