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Dayssi Olarte de Kanavos is the president and COO of Flag Luxury Group, which owns several Ritz-Carlton properties, including the newly completed Ritz-Carlton NoMad in Manhattan, which Flax Luxury developed and opened earlier this year.
The company also owns the Ritz-Carlton Residences in Coconut Grove, Fla., and the Ritz-Carlton South Beach, a historic Florida hotel that recently underwent a $100 million renovation after Hurricane Irma damaged it in 2017. Flag Luxury was recently approved to build a high-rise condo near that South Beach hotel on Lincoln Road.
In conjunction with that development, Flag Luxury is pitching a makeover for the famous Lincoln Road promenade that would pedestrianize the last few blocks leading to the ocean and improve the area, which has become seedy in the last several years. It would also complete the vision of Maurice Lapidus, the Miami Modern architect who designed Lincoln Road and much of Miami Beach.
Olarte de Kanavos, who was born in Colombia and briefly made headlines as a New York socialite, fell in love with real estate during college, and started Flag Luxury with her husband — who came from a family of real estate developers — in the late `90s. Olarte de Kanavos, who is a champion for women in commercial real estate, chose to raise her two children full time and work part time while they were in school. Now the children, both in their twenties, have joined the family business, with daughter Sophia teaming with her father on the finance and acquisitions side, and son Peter working with his mother on construction and development.
Commercial Observer met with the executive in October at the Ritz-Carlton NoMad in the club room, where guests are treated to rotating delicacies from chef Jose Andres, who manages the hotel’s two restaurants, its rooftop bar and all its food offerings.
Olarte de Kanavos discussed the South Beach developments, completing the NoMad hotel during COVID, and how she chose to balance being a mother with being a real estate developer.
This interview has been edited for clarity and length.
The Ritz-Carlton NoMad was completed earlier this year. Is it your first project of this size?
Dayssi Olarte de Kanavos: No, we’ve done other developments. The Ritz-Carlton in Coconut Grove was one of the first — maybe the first — branded Ritz-Carlton residences. So it was a really important strategic project for them.
I’ve also done a lot of historic renovations. We did the Ritz-Carlton in South Beach, and that’s more complicated than ground up. What was really interesting about South Beach was that that was the very first project that Ritz-Carlton ever did away with the old Queen Anne-style furniture like they had in Boston. They thought that it was part of the brand to always have this style of furniture. But we had this Miami Modern building, so we spoke to Bill Marriott, and told him we can still make it elegant like a Ritz, but we have to be true to the Miami Modern design and to the Maurice Lapidus essence of that building, which they agreed to do. So it was really one of the first Ritz-Carltons that had a sense of place.
That was completed in the early 2000s. What was there before?
It was a small two-star hotel, the DiLido. I mean, it was important when it first opened, but, over the years, it just got kind of run down like a lot of Miami Beach at the time. There were even a lot of hotels that were crack houses that were not great places to be, even though there were some residents still there, during that whole time, and there were a lot of retirees next to unsavory places.
And, at the time, the Delano was really the first one that opened as a nicer hotel in the market, and then the Lowes, and then we came along with luxury. And what was really important. The Ritz gives everyone the sense of propriety, safety. It gave the stamp of approval to this area in Miami Beach that, you know, felt a little dicey. And, sure enough, all the stores got better, Lincoln Road got better, and then we welcomed all these new great hotels that opened in our neighborhood.
So is history repeating itself?
Unfortunately, for the part of Lincoln Road that is not pedestrianized, a couple of things happened, right? Before COVID, there was Hurricane Irma, which actually destroyed two hotels: ours and the Raleigh, which has been closed ever since, and that was 2017. So we were closed, Raleigh was closed. And what happens when things are closed for so long, unsavory people kind of start taking over the neighborhood a bit. But then COVID happened, and, when the whole country was closed, before the rah-rah opening of Miami Beach, it just really took a bad turn.
What happened to the Ritz-Carlton?
We had catastrophic damage. And we had to close for two years, one year just to remediate — the water just kept on finding its way throughout the entire building — making sure that there’s no more damage and making sure that there are no pathogens in the water. It was a $100 million job that we actually pulled off, redoing and restoring in record time. We opened in two years.
You’ve been advocating for more residential development in the neighborhood as well as to pedestrianize the part of Lincoln Road that would link it to the beach. Why do you think that’s necessary?
When we first opened our hotel, we actually had people that worked in our hotel that walked to work; they lived in our neighborhood. Now people can’t live in our neighborhood because it’s too expensive. We have so many short-term rentals that push up the rental prices for everybody else, and they create a shortage. And, so, that stock of residents has not been replaced.
I don’t think it’s a question of supply, it’s a question of overtourism. When you have overtourism, it really damages the look and feel and infrastructure of a city because it has way too many people at the same time using the infrastructure; it contributes to pollution; it’s really damaging. And it leads to not having full-time residents that have eyes on the street to be like, “Hey, how come we’re not cleaning this up?” Or “Where’s the police for this?”
There is a balance between tourists and residents, and I think we need to find what the right balance is, and make sure that we’re keeping the infrastructure great for everybody, for tourists and visitors too.
So we’re working hard to push for more residences to be built, or alternative uses, office buildings. I don’t have more land there, so it’s not gonna benefit me. I don’t own anything else, besides the Ritz-Carlton and the Sagamore. But we’re very supportive of anybody who wants to build full-time residences specifically. Because we think we need to change that dynamic.
You are looking to build residences on the land that you do have, and you just got approved in October to do so. Can you talk me through that project?
We have this additional 100,000 square feet that we’re entitled to; we’ve never built up to our full potential. And we’re also allowed to go up to 100 feet. We never asked the city for anything, just to build what we have as of right. We could have built another hotel. But instead, we want to build residences, because we think it’s going to be a better mix.
People were really rooting for this project to happen because they knew that because we’re investing so much money in the residences, and we have so much already invested in this property, we really do care about our neighborhood. We do care what’s right at our front step, and we’re sincere about wanting to improve it.
All the improvements that we set out to do on Lincoln Road are basically all for the public. We’re contributing our own money to improve the rest of the street for pedestrians, residents, people that live there.
Tell me more about the Lincoln Road project.
This neighborhood doesn’t have one developer, there’s, like, a million developers here. We thought that we needed to try to show the neighborhood a vision for what the neighborhood could be. And, so, we did that. We came up with a vision to really put the pedestrian back into the plan, and beautify it and create an area where not only is it beautiful, but it would have the right traffic and the right pedestrian access for tourists, for residents, and it’s going to improve all of the real estate values there.
The Lincoln Road project, which will be financed by a mix of your funds and public funds, still requires approval. Right?
We have to go back in December, because they had a lot of comments, that were really good comments and that were valid. They wanted us to show a little bit more detail with our monument, a Maruice Lapidus monumental arch that he started sketching, but we tried to reinterpret it, and they want to see more what that is going to be, and some of the materiality on the walkway to the beach. So they have a lot of questions.
And we’ll come back prepared with all of the answers, and the budget will get approved. I mean, the option would be them not approving and then deciding to pay for it themselves. Which I doubt. … Why would they do that when I’m offering to pay for it?
I heard that Maurice Lapidus originally viewed the Lincoln Road promenade stretching from the bay to the ocean. Tell me a little bit about how your project fits in historically?
Maurice Lapidus was known as the hotel fixer. He started his career by going into hotels that were poorly designed, and then figuring out how to fix them by adding drama, changing the entrance, adding staircases to nowhere, you know? And then he started getting his own commissions and his own big projects, and he loved the idea of architecture always progressing. He felt great about being able to add on to an older building or a historic building or things like that. So the part of that he built on our property is an addition, he wasn’t even the original designer. But anyway… .
What he envisioned for Lincoln Road was that it would be pedestrianized on one side all the way through, and that he would connect to greenbelts, from the river all the way to the ocean. So when he was commissioned for the project, somebody in the city center said we’re only going to go up to the 300 block. And he said to them, “You are going to regret this, you’re going to wish that it was pedestrian all the way through.” And, sure enough, they did regret it.
Let’s talk about NoMad. The Ritz was completed last year, which means a lot of the construction was done during COVID.
So much. We wanted to kill ourselves. It was really bad.
What did it take to get this completed in 2022?
I say blood, sweat and tears. And then I always take back the tears part because we didn’t have time to cry. Building in COVID was just trying to put out fires everywhere, because as you can imagine, if we had, let’s say, plumbers on one floor, and one of them got COVID, then anybody that was on that floor would also have to leave for two whole weeks. Can you imagine what that does to the scheduling of a job? And then getting materials — even though we had pre-ordered, all of a sudden, so much stuff got lost, stolen, so we had to reorder again, at much higher prices, and to fly things in all of a sudden — it really blew up the budget.
It delayed us, but, when I think about the fact that we opened within, like, nine to 12 months of when we set out to open, despite the fact that it was COVID — it’s herculean. It was everybody’s passion and drive to make it happen, because so many projects in the city just closed. People just stopped. Other hotels that were supposed to open way before us, sadly, they just kind of shut down. We didn’t stop, we were committed to opening, and we did, knock on wood. It was painful, but seeing the result of this hotel — it’s sort of the culmination of 30 to 40 years of experience in building hotels. To see how well received it is by our guests and our customers — I pinch myself.
Did it affect your financing for the NoMad hotel at all? Did it change the financing costs as well?
Yes. Sadly, yes. It really did.
At the same time, we’re long-term holders. So we’re going to hold on to this property until — I don’t know — ’til I die. I don’t think I’m gonna ever sell it.
I mean, even the Ritz in South Beach, we had a catastrophe there when we first did it because in 2001, our contractor had all his offices at the World Trade Center. So, he was decimated, and he went bankrupt. And our job stopped. And to stop a job is catastrophic. Most people don’t open up after that. We managed to, nine months later — reopen the job, got our bond paid, etc. And we actually met our third year of stabilization in the first year, which was incredible. And we were underwater then, too. So I feel that we can navigate these waters.
And we’re in a position of having this incredible asset designed by Rafael Viñoly. I wanted the building to withstand the test of time, so that people aren’t gonna just want to demolish it. The ultimate in sustainability is that you want your building to stay, that people aren’t just gonna knock it down to build something better. So that’s why we hired someone like Rafael.
Let’s go back in time a bit. You went to Cornell, and then got your master’s in real estate at NYU. And that was before you met your husband. So what initially got you interested in hospitality or real estate?
My mother owned a restaurant, my uncle owned a hotel in Bogota, a little bed and breakfast; but my sister really was the one that inspired me because she really wanted to be in hospitality. At the time we were in Colombia, and it just sounded so glamorous, right? But I was also interested in other things. When I applied to college, I applied to Cornell for hospitality. And I applied to another university for anthropology.
At Cornell, I loved the program, but I really felt like I could never be in operations, day to day. Luckily, it’s a business degree so I knew I could apply it to something else. But we had a class that was called “Cookies With Clark.” Clark was a TA, and if you went to the class every Friday, we would get an A. So, of course, everybody shows up to that class to get their easy A. And we get lectured by visiting people in the business about their careers, about what they do, about what inspired them, what their daily lives are, so you really learned a lot. And that taught me about a lot of these people in operations and how much I really disliked them.
But then there was the one developer that came and showed the picture of this piece of land and how he envisioned this incredible hotel and how he put it together and the team that built it, and opening day. … I was like “Bingo!” This is what I want to do. I want to build hotels.
So I went to work for a commercial leasing firm, to learn about the real estate market in New York, and, then, when NYU did their first program, I applied to it. That was an incredible program, we learned from people who are in the business; they were in the real world, teaching us real world tools to use.
And then I met my husband, who was a developer also.
Did you meet him through the developers you knew?
No, we met socially. But we decided that we were going to work together because his family business was winding down and he said, “There’s going to be a time when I’m going to be your partner.” We started our business a few years later.
How did you guys work together? What were the roles in the beginning, and did it stay the same?
No, it changed a lot. I was more junior. He’s not much older than me but I was definitely more junior in my career. In the beginning, I was almost like his financial analyst, and I would put together his offering memoranda and things like that. As time went by, and we really started looking at the projects that we wanted to do together, then I really got to sink my teeth into those projects.
I also worked part time for a while as I became a mom, and I wanted to be home with the kids. I wasn’t full time in the business until they were in school all day. I did it in phases; I didn’t do everything at the same time.
That’s hard to do.
I knew that I didn’t want to be full time at work and a part-time mom. I wanted the opposite. And I don’t regret it, it was the best, but it’s a very hard decision to make. And a lot of women grapple with that. People have been telling us for years that we can do everything and all at the same time. In my experience, I felt like, no, that’s really hard to do. The expectations that society has of women is so high, and we push it all on to ourselves, right?
I learned that I wasn’t going to do everything at the same time, that I was going to do it in phases and see how that would work. And for me, it worked. And when I really got to sink my teeth into our business, it was a really exciting time to finally get there.
Are there any women in your life who were role models for you?
My mother. My mother was incredible. My mother always worked, she had to work, she didn’t have the luxury of just staying at home. Even if she could stay, she wouldn’t because she really loved working. But also, there were times when she was the only breadwinner. She worked, double shifts, she worked all the time.
I just loved her work ethic — the drive, the drive to improve herself, and her family. She was really smart with all of the choices that she made for us and sacrifices to get us to the best schools that she could afford, or that she could make sure that we lived in the right neighborhood and get access to quality education. She moved us into Forest Hills, Queens, so that I could go to a good public school, but still be close enough to the city, where she could also work. And I always admired that drive and that clarity of vision of knowing that education is the most important thing you want to give your kids.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
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