Oregon hotel owner makes first acquisition in New York
By Robin K. Cooper – Reporter, Albany Business Review
Jul 6, 2023
After a decade operating hotels on the West Coast, David Mogg and Newtro Hospitality made their first investment in New York state, acquiring The Birches Motel on Route 9 in Wilton with plans to convert the property into a boutique inn with a “girls’ weekend getaway vibe.”
Mogg, who grew up in Perth, Australia, and spent several years working in Europe, has renovated, rebranded and operated hotels in California and Oregon. He moved with his wife to Saratoga Springs in May as he was preparing to complete the first of multiple investments in the region.
“We were looking at properties in the Northeast,” Mogg said. “Every state was on our map.”
Newtro Hospitality purchased The Birches, a 12-room roadside motel, last month from Austen Property Management and Robert Howe after Mogg was introduced to the property by broker Mitch Muroff of Muroff Hospitality Group. The acquisition closed June 21. Muroff represented the seller.
Mogg plans to purchase and operate multiple small independent motels in the region. He also has had discussions about purchasing the 77-room Landmark Motor Inn on Route 9 in Moreau, about 10 miles north of The Birches, but has not yet reached an agreement. The asking price for the Landmark is $3.6 million.
“I like the whole 1950s, midcentury boutique, upscale kind of vibe,” Mogg said.
He sees The Birches as a good first step to entering the market. Newtro Hospitality acquired the 1.4-acre property, which includes a two- to three-bedroom apartment, for $625,000. Mogg is renovating and reconfiguring the rooms this summer, while keeping his doors open for weekend crowds as the thoroughbred racing season is about to begin at Saratoga Race Course.
Peak season room rates will likely be around $300 to $400 a night. The apartment could rent for up to $2,000.
The acquisition and renovations were financed through a mortgage with Glens Falls National Bank and a Small Business Administration loan from Pursuit.
“I can fix an asset and renovate tired rooms and rebrand a property, but I have found the fastest way to success is to get to know people in the community.” Mogg said.
Renovations are expected to be finished in August and the property will be rebranded as the Santal Inn in September. Upgrades will include replacement of all beds and furniture, new floors, paint and wallpaper. Mogg also plans to install a fire pit and the rooms have been converted to self-check-in with keyless entry. A future expansion could include bringing some sort of food and beverage component to the property.
“This first deal gets me into the market and gets me living up here,” Mogg said.
Now, he can learn more about the market while continuing to search for future investments.
“My ears are open,” he said. “I am hoping that by next year, or by our second year, we will have an accepted offer on another property.”
While high interest rates and the softening economy have made it more difficult and expensive to finance hotel and motel acquisitions, Mogg said the environment has not deterred him from pushing forward with his plans.
“The rates are brutal, but interest rates are not forever,” Mogg said.
If you invest and build in some additional equity, it can set you up to refinance in a couple years, he said. The high rates also mean fewer potential buyers are bidding on properties, which helps ensure fewer investors are trying to outbid each other, driving up the purchase price in the process.