DelMonte, Cobblestone get together for hotel project

When it came to their collection of properties, the DelMonte Hotel Group had always done things on their own.

They built their first full-service hotel, the Marriott Thruway, in 1973. Their next hotel, the Rochester Airport Marriott in Greece, came in 1978 and they still own and operate that property. Nearly four decades later, their most recent Monroe County hotel, the Hilton Garden Inn Rochester University, opened near Strong Memorial Hospital.

Nothing really changed with that do-it-ourselves business approach until last year, when the DelMonte Group made growth more of a priority.

“We’re smartly growing our portfolio—we’re looking in the Northeast and mid-Atlantic,” said Alex DelMonte, president of the East Rochester-based firm. “But if we want to grow at a more rapid pace, we’ll have to bring in equity from outside investors.”

They found their first partner essentially in their East Rochester backyard. Cobblestone Capital Advisors, with headquarters in the Linden Oaks Office Park, believes the right hotel real estate investment can be a wise offering to its clients.

As a result, the AC Hotel Cleveland Beachwood was born. Construction crews broke ground in May 2017 and the Ohio hotel opened to guests two months ago.

“We thought it was a unique opportunity to team up with a premier hotel developer,” John DiPasquale, managing partner at Cobblestone Capital Advisors, said.

“As an asset management firm, it’s important for us to continue to diversify portfolios. The primary purpose of this venture is to provide clients with a diversified investment opportunity. It’s a real estate venture with a proven operator of Marriott and Hilton hotels, and it gives clients direct access to private, cash-flowing real estate.”

For the DelMonte Group, which ranked ninth on the Rochester Business Journal’s list of largest private employers in September, the addition of financial backing allows more rapid growth—if so desired.

“Obviously everyone likes bigger numbers but we want to be sure we’re making the right acquisitions,” DelMonte said.

The hotel project in the Cleveland suburb of Orange, Ohio, wasn’t just the first for the DelMonte Group with a partner, it also was the first AC brand added to the property roster.

Founded in Spain by Antonio Catalan in 1998, Marriott in 2011 obtained ownership in the brand that very much targets millennials.

“It’s a European lifestyle brand,” DelMonte said. “These hotels are very urban in nature and in mixed-use projects. They provide all the upper-tier finishes and fixtures of a full-service hotel experience, but there’s not overkill on amenities in public spaces.”

Attention is paid to the dining experience and bar, as well, he said.

The AC Hotel Cleveland Beachwood features 145 rooms. It’s in the heart of a mixed-use district that provides shopping, dining, residential options and a concert/festival venue.

The DelMonte Group independently owns 11 hotels and has partners in two others. Three new properties are under construction: a Cleveland Residence Inn, in which they have an investment partner, and a different type of venture that combines a Residence Inn and Courtyard by Marriott near the Albany airport.

The Residence Inn and Courtyard buildings will be connected and will share a front desk, pool and business center. There will be 215 total guest rooms.

“It’s two brands in one building,” DelMonte said. “It is unique but it’s becoming more popular in the development community.”

While DelMonte Hotel Group continues to explore growth, Cobblestone Capital will be considering similar partnership opportunities in the future, if they make sense. Cobblestone ranked 10th on the RBJ list of top Rochester-area money management firms.

“We’ll be very discerning about the economic variables and demographic trends,” DiPasquale said.

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