With a focus on hospitality as well as a diversified portfolio in other areas, Bilgili has managed the challenges of the Covid-19 pandemic and unstable economic issues both at home in Turkey and abroad. In doing so, his firm is responsible for some of the most popular and well-known travel investments in different cities of the world.
The BLG playbook demonstrates how the company can build and grow luxury travel brands quickly and profitably. He shares how BLG has fared during the tough pandemic times, but also the pockets of opportunity he sees for investments in travel and hospitality both in Turkey and the United States.
What are some of BLG’s more prominent tourism developments?
One of the biggest projects for Istanbul has been the Galataport development, which took a derelict area that was also being used as the cruise port and transformed it. Today, it is a world-class cruise port with a patented design that creates an underground terminal (much like an airport facility) funneling passengers efficiently by using panels that can electronically open and close to separate the secured area.
This creates a waterfront promenade area that can be used by both visitors and locals and has reenergized an important neighborhood for the city. The architect responsible for the High Line in New York was part of this redevelopment project, which can host any size ship in Europe today.
Also part of the development is the new Istanbul Modern Museum, numerous restaurants and shops, and a park area. In many ways, it changed the social life of the city and became a destination that locals are proud of and enjoy year-round.
Does BLG invest in hospitality projects?
On the tourism front, the city’s newest luxury hotel, The Peninsula Istanbul, opened there as one of our investments. Already, it boasts one of the highest average daily rates (ADR, a hotel benchmark for profitability) in the city proving its success and strong reputation.
BLG is one of the only real estate companies in the area to have such a wide range of luxury brands including Aman in Bodrum, The Ritz-Carlton Residences Istanbul, Soho House Istanbul and the first W Hotel on the European continent in Istanbul, which opened in 2008. It is part of the Akaretler Row Houses in central Istanbul. These were created by Sultan Abdulaziz prominent guests visiting nearby Dolmabahce Palace in the late 1800s.
When Soho House opened in Istanbul, which is housed in four buildings including a former Italian palazzo that was later used as part of the U.S. consulate, it was the only one outside of the U.S. and United Kingdom. BLG has blazed a trail when it comes to travel luxury brands, and it’s something we are proud of about the portfolio.
Past projects have included Mandarin Oriental Residences in Beverly Hills, Mandarin Oriental Residences Fifth Avenue in New York and in Miami’s South Beach, properties like The Raleigh and The Richmond.
What is one of your secrets to success?
One thing we do well is taking historic or less-used buildings and repurposing them for new use. This type of conversion includes old office or residential buildings as well as structures that need a lot of reworking. It’s about finding a new life for them and updating them structurally and technologically while retaining many of the structural elements that made them special.
The Peninsula, for example, is within the old cruise terminal, which was almost entirely gutted and rebuilt from scratch (while preserving its historic and protected elements). The Ritz-Carlton Residences was once a bank building, but now home to the city’s premier residential complex with indoor pool, spa, cinema and rooftop gardens with retail at the base.
Following the pandemic, there is huge potential for conversions across the United States, and we have many projects in the works in New York and Los Angeles already. Many office buildings are seeing less use with major tenants pulling out paving the way for alternative or mixed use development.
One exception to that is in Miami, which is one of the few cities that still needs high-quality office space due to demand from people moving there outpacing supply. It just has a different mix of dynamics than other U.S. cities. It’s very similar to Bodrum on the Turkish coastline where a development boom has shown no signs of slowing down. The real estate market there has exploded and is continuing on its upward trajectory as people continue to move there (at least part time, after fleeing large cities during the pandemic). BLG has four ongoing projects there at the moment.
Does food and beverage factor into these investment projects?
Whether it’s for hospitality, an office building or residential use, food and beverage is always key for a successful project. This is both from a revenue side as well as from the enjoyment perspective of the people that use the building on a daily basis.
There is opportunity for more than just mixed-use development. BLG already has a student housing concept in Istanbul that is more like a hotel with gym, co-working space, recreational areas and modern housing. This idea could also work with elderly housing by creating an upscale and well-equipped development where older people enjoy living.
Why did BLG invest in the membership club concept?
Any big city needs membership clubs where like-minded people can gather to share ideas. Here in Istanbul (like at other Soho House properties), it is a hub for creative minds, artists, musicians and other innovators. These types of clubs have only grown in popularity since the pandemic, and Soho House today is boasting a record level of membership.
BLG has plans for additional membership clubs in places like Los Angeles among others. Soho House is also related to The Ned brand, which has properties in Doha, London and New York.
What is the biggest challenge in development now?
The hardest thing for BLG in the U.S. is being a foreign company since we have to manage a lot of things from overseas. Time differences and distance challenges add complexity. Financing can also be a challenge since interest rates are high and banks are reluctant to lend cash. Some investors are even becoming lenders themselves because they see a higher rate of return right now.
Construction is always a local game, but development is an international one. BLG can bring a mix of backgrounds and cultures to a development, which is something that has proven quite valuable. Right now, the potential is huge in the U.S. and around the world.