At the 2025 NYU International Hospitality Investment Forum, held at the New York Marriott Marquis, Michael Bluhm, managing director, global head of real estate, gaming and lodging, Jefferies LLC, and Mit Shah, CEO, Noble Investment Group, discussed the pressing challenges and emerging opportunities in the current landscape.
Their conversation centered around one key theme: how smart capital is positioning itself to capture long-term value in a fundamentally evolving lodging sector.
Bluhm highlighted Noble’s performance and approach. “It just seems to kind of flow into Noble,” he said, referring to the group’s ability to attract capital. “It’s that confidence that people have in you to navigate these tough environments and cycles.”
Shah explained how the firm has stayed ahead of the curve. “Leading up to the fourth quarter of last year, we really felt like there were strong secular demand trends emerging in our business,” he said. “We grew rates in our upscale select-service and upscale extended-stay business by 3x the pace of inflation. Because of that, we were actually able to have margin expansion.”
He added, “In the fourth quarter, we were up 7%. In January, we were up 8%. In February, we were up 7%. This is all just select-service and upscale extended-stay—whatever wind we’re in.”
He emphasized the core math behind Noble’s investment thesis. “It’s an eight-cap business,” said Shah. “If you can buy things between seven- and eight-cap and create operating leverage, you can turn that into a ten. You deliver half of the equity back through cash flow over five years, and the other half when you sell. That’s a 2x return—and that’s been our business.”
Shah laid out his vision for branded long-term accommodations—a term he prefers over what he called the outdated “midscale extended-stay.”
“When you get that 30-plus night stay, you’re able to really run these with six to eight FTEs, housekeeping once every two weeks,” he said. “It’s an operating model that’s very different. And for $2,000 to $2,300 a month—about $75 a night—this is where you live.”
According to Shah, this isn’t just another hotel segment—it’s a new class of real estate. “It’s not extended-stay,” he said. “The average length of stay at a Residence Inn is 3.4 nights. What we’re talking about is truly an apartment alternative, from 30 days to a year, perhaps longer.”
Bluhm highlighted the momentum behind the trend: “Every major operator has jumped into this space in the past two years in a meaningful way,” he said. “It’s obviously a big driver of unit growth.”
Shah pointed out two drivers for this growth: a massive housing shortage and the rise of lifestyle ecosystems. “There is a real housing need, and you can deliver a product that solves for that,” he said. “But let’s also talk about brands. Ten years ago, Marriott and Hilton had 50 million loyalty members. Today, they have over 250 million.”
He likened it to Amazon’s evolution from a bookseller to a lifestyle platform. “Amazon had 53 million Prime members 10 years ago,” he said. “Today, they have 260 million. What happened? Electronics, groceries, gaming, streaming—touchpoints. That’s what Marriott and Hilton are after.”
He added, “The next progression for these brands is: Where do you live? Where do you experience other parts of life? Their kids will be in branded student housing, they’ll live in branded multifamily, take branded cruises and stay in branded active adult living. That’s the escalation of growth opportunities.”
Shah was blunt about how institutions approach the space: “I don’t think anybody wakes up across the globe as an institutional LP and says, ‘Man, I gotta get my hotel fix.’ The reality is they want safety. They want security. They don’t love volatility.”
Still, he explained that in today’s environment, investors see a “barbell” strategy—luxury and irreplaceable assets on one side, and resilient, middle-market, cash-flowing assets like Noble’s on the other.
“They understand this sector can generate positive leverage without having to rely solely on market growth,” he said. “You can deliver both cash flow and appreciation.”
Bluhm echoed the sentiment, pointing to macroeconomic shifts: “Thirty-five percent of the population is now over 55—and that’s where all the wealth resides. So luxury has pricing power. But the other side of that barbell? The branded long-term segment—it’s sticky, it’s scalable, and it solves real-world problems.”
Looking ahead, Shah said Noble will continue to scale rapidly in the branded long-term space. “Two years ago, we had none,” he said. “By the end of the year, we hope to have 100. These are achieving double-digit unlevered yields. That’s pretty compelling in today’s environment.”
He also hinted at broader innovation in the investment structures themselves. “If you can lower the volatility based on market and demand segments, you can create vehicles that belong. A lot of our REIT friends don’t feel like that’s the route anymore. There’s not the growth story there.”
Shah stressed the importance of precision in this market. “I like to not think about just the generalization of our sector. It’s about sharpshooting in specific areas,” he said. “It’s no different than the difference between high-street retail and suburban malls, or A-plus office vs. everything else.”
Bluhm summarized the significance of the shift. “All those developers over the years have tried to figure out the hospitality algorithm, but no one’s done it as well as the U.S. operators,” he said.
And Shah agreed: “We’re not just going to use the word ‘lodging’ anymore. It’s going to be an entire ecosystem—and it’s just getting started.”
