Bisnow Hotel Summit Oct. 19: How Extended Stay America Developer Launched With Blockbuster Video

Blockbuster Video might be gone (mostly), but the team that handled its real estate lives on in a big way. OTO Development founding partner and VP real estate Todd Turner, who will be a speaker at Bisnow's 4th annual Lodging Investment and Innovation Series, tells us that the company's leadership has been together since their Blockbuster Video days.

"Upon the sale of the video business to Viacom in 1994, we created the Extended Stay America concept and developed 475 hotels over the next nine years," he says. "We didn’t know much about the hotel business when we started ESA, we made a ton of mistakes, but learned along the way."

"When we sold ESA in 2004, we kept the same team together to form OTO Development," he recalls, "but this time developing upscale select-service hotels as franchisees under the Hilton, Hyatt, Marriott and Starwood brands." Todd's snapped during a tour of the Google offices in Chelsea.

Looking ahead, Todd says that the pipeline of new supply presents the greatest risk to the midterm performance strength of many major markets. The brands have record pipelines and they're all growing their footprint through the creation of new (and similar) concepts, and intensifying their presence in the core of the major markets.

"We haven't seen it happen yet in this cycle, but at some point soon in many markets, the new supply will have a meaningful performance impact," he explains, though there are a very few markets in which the barriers to entry are truly high enough that the amount of new supply will likely never create a meaningful performance impact.

Bisnow's 4th annual Lodging Investment and Innovation Series will be at the Renaissance Washington DC Downtown Hotel on Oct. 19. Sign up here.