Founder's Story - Unbranded to Unforgettable: How Korosh Farazad Reinvents Hospitality | Ep 210 with Korosh Farazad Founder of Farazad Advisory

Episode Date: May 2, 2025

Korosh Farazad traded a UK law career for two decades of pioneering structured finance in hospitality real estate. Today, his Farazad Advisory specializes in value-add hotel acquisitions—85–200 rooms, no global brands, 3–5-year hold—in gateway cities across North America and Western Europe. From SLS Dubai to a sudden Swiss relocation, Korosh reveals the deal architecture, market pivots, and hard-won lessons behind his boutique empire.Key Discussion Points:The Spark: How a people-person’s obsession with behind-the-scenes hotel value drove Korosh from courtroom to keys.Deal DNA: Why only sub-200-room, unbranded hotels qualify, and how minority stakes plus franchise tie-ins deliver 1.8–3× returns.“SLS Dubai” Benchmark: The guest-experience blueprint that turns check-in into a 24-hour mousetrap of F&B and nightlife options.Market Pivot: Exiting a cooling UK scene, relocating to Switzerland in five weeks, and sealing first Swiss deals in record time.Architects of Upside: Balancing debt-serviceability and in-house expertise to self-power roll-off trucks, paving rigs, and franchise roll-outs.Failure → Fuel: Why every crash taught him more than success, and how relentless iteration builds the confident dealmaker.Key Takeaways:Start Small, Crawl First: Deeply master every back-and-front-of-house nuance before running.Value-Add Over Core: Seek the “unfinished canvas” hotels that reward hands-on branding and operational revamps.Crystal-Clear Criteria: 85–200 rooms • no legacy brand • three-to-five-year hold • gateway city tourist flow.Speed to Market: Quick pivots (e.g., Switzerland in five weeks) beat protracted, high-cost transformations.Closing Thoughts:Korosh Farazad’s journey reminds us that hospitality deals aren’t hotel-chain clones but stories begging to be rewritten. Tune in to discover how structured finance, guest-obsessed engineering, and bold market moves can redefine real estate success—one boutique acquisition at a time.Our Sponsors:* Check out Indeed: https://indeed.com/FOUNDERSSTORY* Check out Northwest Registered Agent and use my code FOUNDERS for a great deal: https://northwestregisteredagent.com* Check out Plus500: https://plus500.com* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

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Price marries, based on product and subscription plan. See website for full details, restrictions, and important safety information. Hey everyone, welcome back to Founder's Story. Today we have Kharosh Farzad, the managing director of Farzad Advisory. We're going to talk through all things real estate, hospitality, investments. I know you're in Europe, North America, Asia Pacific. You are a veteran in structure financing, engineering, challenging structures within real estate transactions. We're gonna go into all these things. I'm very interested to

hear the state of how everything is. I know you recently moved to Switzerland. We can talk through that too. But first though, I'd love to understand what the state of how everything is. I know you recently moved to Switzerland. We can talk through that too. But first though, I'd love to understand what was the spark around your obsession with hospitality and real estate? And was it a specific moment that influenced you? That's actually a very good question.

I've always been involved. I've always had a passion for real estate, but I've always had even more of a passion for hospitality. Seeing different hotels, I mean, I travel a lot, but prior to getting engaged with the hospitality arena and on the real estate side, I just had this passion that putting real estate and hospitality into one sentence just sparked my attention. One of the elements was there's a lot of work that goes behind the scenes to create a value of a hotel. And that's really what that drove me into getting involved in the business. And more specifically, being in the hospitality industry, you have to be hospitable, so to speak.

So that was also another drive because I'm a people's person, or at least I think I'm a people's person. And it carried weight for me to explore the idea and tap into it and I tapped into it about almost two decades ago. Hey, well that's nice. If you're into hospitality, you can travel around the world

and going to all these amazing hotels is really information you need. So you're kind of working and having fun at the same time. When it comes to hotels and hospitality, when you look at what you want to invest in, are there certain things that you're looking for? Yes, 100%. First of all, we look for opportunities that are value-added upside.

We don't look for core assets. What that means in plain simple English is any hotel that is just brand new and is already stabilized, it's not for us. We look for hotels that don't have a brand on it like your Marriott's, your Accors, your Hilton's, so on and so forth. We go in, we look at the opportunity, we see how we can revamp the opportunity by bringing in a franchise operator. We don't deal with long-term relationships like hotel management agreements. We look for 10-year operators or 10-year franchises implementing food and beverage concepts that

correlates with that hotel, with that region, and gives options for the guests to have a variety when they come in to experience the hotel. And then we keep it for about minimum three to five years is our objective and mostly gateway cities in Western Europe. We do case by case other destinations, but it's really the gateway cities where there's a high penetration of of inward Tourists. So let's say you have some hotel owners out there who are like, you know, I would love to I would love to be involved in this You know, I would love to get either an investment or roll up or however you would structure it What would you say to these owners as to something that you're looking for?

Is it do they need a certain amount of locations? Does it need to be a certain amount of rooms by their certain metrics that you're looking at very good question again? Yes, we look for at least a minimum of 85 rooms and above Maximum is 200 because anything above 200 becomes a room factory as we call it Okay, it's just you're not gonna be able to get that relationship, the hospitality experience. Of course the larger hotels can, but we're not those large groups. We are more smaller and we're leaner and we care for the assets. And therefore, what our objective is, if a hotelier, a current owner says,

listen, I don't have the bandwidth to do what you guys do, okay, we don't go and purchase the hotel 100% outright. We give a minority stake as our local sponsor, unless we have other local sponsors within the parameters of that hotel or within that region, I should say. And if it makes sense, then we keep them on board for let's say 20 or 30% of the ask price. So for example, if a hotel is,

for the sake of this conversation, if it's $10 million, we say, okay, we will pay you 8 million, 2 million, we won't pay you, and the 20% remains yours, but then you get the upside of it. What is that upside? It's post stabilization and the value adds, the elements that I've already described by re-revisioning the food and beverage concepts, putting a brand in there, putting it into a reservation motor or engine, then what happens is that you automatically generated a good revenue post the investment. And that could range from subject to jurisdictions, it can go from anywhere from 1.8% to 3%

or 3X of your money. So that's a pretty good return if you think about it. Is it always like that? No, it's not always like that. We try to be very, very conservative with our numbers, but achieve the end results and to make sure that not only we're satisfied, but the exit buyer that's going to purchase that hotel from us is satisfied knowing the fact that they're getting something that can run for at least a decade post the post us selling it to them. Being in the hospitality industry previously myself I can relate to the fact that many of these companies they they don't stay up with technological trends or like you said building a brand marketing there's a lot of things that they don brand marketing there's a lot of

things that they don't do. I know a lot of people that say I want to just open up a hotel but don't realize how hard it is and how much work goes into it. So if you were to look at you know the perfect hotel that you visit what are you looking for or what or maybe even an example of a hotel that that really wow's you. Customer experience or guest experience is the most important thing. The moment the guest enters to check in, that's when you've caught the guest's attention. If you let that guest go, check in,

and then go out to have their cocktails or to have their snacks, you've lost that guest. That's the way I look at it. So technically it's like a mousetrap formula. Once your guest enters your premises, you have to hold them there for 24 hours. By doing that, meaning you have to have options for them. Okay, so options means what type of all day dining

is your hotel providing? What type of a signature restaurant dining is your hotel providing? What type of a signature restaurant that correlates with the brand, that correlates with the region, and the story within that hotel is providing? And on top of that, you have the nightcap. Every hotel must have a decent bar. Because these are revenue generators. must have a decent bar. When you realize you need to hire, it's usually already too late. I've been there wasting weeks waiting for decent

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Pick one or go all in for only $90 exclusively on Dazon. Buy now at Dazon.com slash boxing. Question with regards, what experience have I seen? One of the best experiences I've had Goes to the SLS, Dubai from the from the moment and this this hotel was up was was built several years ago and It's magnificent from the from the moment you enter the hotel, you have options. And the customer care is just mind blowing. Of course, everyone says, well, Dubai has the

best service all around the world. It's like Singapore, blah, blah, blah. Yes, it does. But customer attention is important. Just by providing a service and not attention to detail is not the same thing. And this is where SLS would probably be one of those hotels that I really enjoyed and it has my heart. Of course there are other hotels that I could think of, but that one, yeah, that captivated me to use that as their first brand.

It's amazing how when you think of a trip, I don't really remember much about that trip, but I always remember the hotel. Like, you know, I see so many castles or churches or sites that to me they all start to feel the same. But I really, really pay attention like you like what you're saying to the hotel. And if the experience of the hotel is great, then I tell people to go back to that city. It's not even just about the hotel. Sometimes it's like the whole city is represented by the hotel. I'm curious about your experiences just in business in general. Was there ever a time where you said, you know what, I'm just going to give up or maybe a challenge that was just so big, but you were able to solve it?

A zillion times. And if I told you no you were able to solve it. A zillion times. And if I told you no, I would be lying to you. A zillion times. I have fall flat in my face many times. And I've managed to get up and just clean myself up and get back to business as usual. And I think this is one of the reasons why I, some people call me a bit too abrasive.

It's not being abrasive, I just know the business and that's only because of, of the experiences I've had both bad and good, more bad than good. And those elements of bad experiences and bad decision-makings or bad investments puts you into a better perspective when it comes to the opportunity. So there is no business that in my experience at least, and I think the right players, if you speak to them, they will probably say the same thing. Without failure, there's no success.

And those failures are what got me into the position that I'm gratefully I can say today, relocating the company to Switzerland was a very quick decision. And that decision was based on the fact that we weren't beginning to see limited value add, or as I call it, not to be disrespectful towards the UK, we outgrew UK markets, okay?

So we needed a little bit more opportunities in terms of transactions, in terms of assets, and in terms of transactions, in terms of assets, and in terms of mindset. UK was a little bit, or it still is, is going through a correctional phase. And I think that correctional phase is going to take at least seven, eight, nine years before it revamps itself. So therefore, we didn't want to ride the negative wave. and that's why Switzerland was one of those ideas. With that said, we physically moved everything and relocated in December 2024 and we signed up our first assets in Switzerland last month.

It shows you how quickly things can move if the right decisions are made. The same type of a story when it comes to Switzerland versus the UK, a transaction this magnitude in London would have taken us six months. Over here, it's taken us five weeks. So it kind of tells you the story in a nutshell. One, great partners. Two, great location. Three, efficiency. efficiency and four transparency. These four elements or

these four elements within the formula got us to where we are today and we're super grateful for it. Yeah I heard some news around 10,000, 11,000 millionaires just left the UK. There is a lot of truth in it. I mean we still have offices London, so it's a rep office now, because most of our people have been relocated and actually to Switzerland. We still have a few more people there, which the relocation process is going to take place. But going back to your initial question, you're not hearing false information. When you're physically on the ground, and now when I go back I see what's going on on the ground and I'm like Oh my god, I used to be one of them

Everyone's just miserable and I feel really bad for them. I was one of those people I would go to work like, you know You know another day at the office lie, you know You're just kind of freaking out because you don't know where this is going. So it is a it is a where this is going. So it is a it is a unfortunately as as charming as London is and as always will be a charming city. It's just going through a process and it just needs a little bit of tender loving care TLC. Yeah we were just in Switzerland and a friend of mine he had moved to Zug and he was like I love it here my kids walk to school and it's super safe and it's amazing. And we went around the lake and I was like, this is a beautiful and absolutely beautiful

place to live. Probably the most expensive place I've ever been on vacation. It was pretty it was Zurich was quite expensive, but great experience with hospitality. People were amazing. I'm curious though. My last question to you is around inspiration. So if somebody comes to you and they say, look, I'm not, maybe I haven't started my hotel or restaurant or I don't have the real estate for you to invest in yet, but I want to get there. I want to get to a place where you see us as something. I'm just starting out. What advice would you give to them? Start small and believe in what you're doing. That's really what I can say.

Just start small. It's, you know, a baby doesn't start doing, you know, marathons from the day they're born. They have to crawl first and then walk and then start running. So the same scenario here. If you believe in the passion that you have, learn it inside out. Don't just learn the facade. Learn the back of the house. Learn the front of the house. Learn how to speak with people. Just learn, read, understand. You can't have a passion without knowing what you have a passion for. That's how I look at different things. In hospitality,

you must either really have thick skin for it because it's really hard, and more importantly, you must have a good passion for it. I can see that. Shout out to all those people that work in hospitality. It is not easy. You have to put up with a lot of things, and then you have to at the same time

make everyone's experience, like I was saying before, is really ride, their entire vacation or trip is riding on you and your service but if people want to get in touch with you they want to find out more information how can they do so? They're welcome to send me an email and you can they can contact ferrizadeadvisory.com one word. Amazing well this has been great I'm super inspired maybe one day day I'm going to create that hotel and then we can chat about it. You never know.

Always welcome, Drew, my man. I'll see you out in Switzerland at some time, but I really enjoyed it today and congrats on the move, all the success. I can't wait to hear from a year from now how just amazing all the things are that you're working on. And thank you so much for joining us today on Founder's Story. Thank you very much my man. I appreciate you.

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