S1E17: Building Success with Community in Mind: Zach Kupperman
January 25, 2021
Jeremy Wells: Hey, Zach. Thank you so much for joining us today. We’re really excited to have you on the podcast.
Zach Kupperman: Thank you guys. I really appreciate it. Glad to be here.
Jeremy Wells: Yeah. We’re really excited to chat to you today. We’ve been following some of the properties you’re working on and we’re really inspired by a lot of them. And after kind of diving into your portfolio of work and all that, we just really wanted to have you on a podcast, kind of talk about who you are, what you’re up to, and just kind of get some of the methodology and the vision behind what you’re trying to accomplish. So yeah, we’re super excited.
Zach Kupperman: Very cool. It’s great to be here. Pumped as well.
Jeremy Wells: Yeah. So for those listening that might not be familiar with Zach and Zach Kupperman who’s with us today, how would you kind of introduce Kupperman Companies and your portfolio and kind of give someone a brief introduction?
Zach Kupperman: Yeah, absolutely. Kupperman Companies is a real estate investment and development firm. We’re based in New Orleans. We have projects throughout the Southeast, primarily Louisiana, Texas, and Georgia at the moment. And a lot of our work has focused both on hospitality and hotels and also with a lot of historic redevelopments. Most everything we do is urban infill. So in the heart of the city, a lot of it involves kind of the historic properties and full repositioning of historic venues.
Dustin Myers: Awesome. Yeah, that’s really cool. I’m sure that comes with a lot of challenges and hurdles to overcome with the historic side.
Zach Kupperman: Yeah. That’s part of the fun though. For me, a lot of these buildings, it’s literally a living piece of history and in a place like New Orleans where the architecture and so much of the culture is kind of built off of and based on the past. It’s pretty cool to go through that and have a very small part and kind of preserving and changing that in a very positive way.
“For me, a lot of these buildings, it’s literally a living piece of history and in a place like New Orleans where the architecture and so much of the culture is kind of built off of and based on the past.”
Jeremy Wells: Yeah, absolutely. You see, in New Orleans, I mean, like you said, the architectures are so unique and so kind of integrated into the landscape there and just the lifestyle and everything. Is that something that you think is pretty unique to that area? Or what have you seen?
Zach Kupperman: Yeah, I do. New Orleans, a lot of the built environment I think is in part what differentiates it and makes it special. There are a lot of cities with pretty unique architecture and New Orleans is certainly one of them. It’s not just the places like the French Quarter that you would typically think of, but the kind of old and the historic fabric permeates literally every neighborhood in New Orleans. And so you can always kind of go through into the residential neighborhoods, the commercial spots and find little historic gems. And a lot of what we’ve done over the years, New Orleans, like many cities, has gone through hard times. It goes through cycles. Over time, especially before Katrina and then right after Katrina, there was a lot of buildings that needed some love and needed to be repaired and a massive amount, especially after Katrina, there was a very large risk of having a good chunk of the historic stock of New Orleans destroyed or not rebuilt or deteriorated. And so one of the things that I’ve personally enjoyed and that we’ve been really proud of, and there’s a lot of other great developers in the city doing this work is all about bringing a lot of historic buildings back and repurposing them in new ways.
Jeremy Wells: Yeah. You mentioned a lot of your portfolio in the hospitality and hotel industry. Did you always know that you wanted to be involved in that way, in the real estate and the hospitality side? Or how did that evolution take place?
“I didn’t grow up wanting to […] necessarily do hotels.”
Zach Kupperman: Yeah. It’s a good question. I didn’t grow up wanting to say necessarily do hotels. I was always interested in real estate and I was always very entrepreneurial and I liked starting new businesses and going through the process of evaluating opportunities. Even in middle school and in high school, I was starting a basketball league with friends and little side businesses and same through college. After Katrina hit, I was living in Austin at the time and I wanted to come back to New Orleans. I went to law school at Tulane University. And that was literally the year after Katrina, 2006. I then worked in a boutique real estate and corporate firm here for about five years doing a lot of real estate legal work. And that was at a time when there was a large influx of state and federal money for rebuilding Katrina, rebuilding the city after Katrina. There was a lot of kind of rebuilding and community work being done. And so really I sort of cut my teeth doing that side of work on the legal side of things. And then throughout, as I mentioned, I was kind of doing entrepreneurial things on the side. I started buying little tax sale properties in law school and kind of just kept on growing it from there. I really liked the hospitality world and I eventually left the practice of law to start a company called “Dinner Lab”. And Dinner Lab was not a real estate company. It was a startup that was a membership-based social dining club where we basically produced pop-up dinners and events with up-and-coming chefs in kind of off the beaten path locations, like a helipad or a motorcycle factory.
Jeremy Wells: Oh, that’s cool.
Zach Kupperman: Yeah. Every single meal was different. We had chefs flying around. Ultimately, we raised several million dollars. We had operations in 30 cities. We had about 90 employees. And so that was really my first entree into both the sort of explosive growth, high growth startup world and also hospitality, primarily kind of food and beverage. But the idea that your product is built for a customer and you have to be literally every single moment, every touchpoint, you’re only as good as your last kind of touchpoint. I learned that through my time at Dinner Lab. Eventually, we ran out of money. We couldn’t raise any more. And so my partners and I shut the business down in 2016. I had been doing kind of real estate on the side and that was a big kind of pivotal moment for me, trying to figure out what I wanted to do next in life and go back to practice law, do a new startup. I really, really was into real estate and decided to essentially launch Kupperman Companies and go into real estate development full time. I had been looking at a lot of hotels and the market in New Orleans in particular, the hospitality market was very, very strong. And relative to other asset classes, it was by far the strongest.
The office market here had been pretty stagnant, multi-family stagnant. There are little pockets of opportunity here and there, but it was not like in Austin or in Nashville or in New York or something where everything was booming. And so hospitality kind of was the natural fit. I had the background in hospitality. Dinner Lab, that was kind of where all the growth was in New Orleans to start. At that time, the hotel kind of ownership market was in the process of the shift. I didn’t know it at the time, but there was a pretty big shift going on from what you had in New Orleans from primarily mom and pop and kind of family office owned hotel market to an institutional hotel market. And so it took me a little while to actually find a deal and close on a deal because it was kind of the wrong time to be doing it in that. Because the market was doing so well, a lot of the family-owned assets were selling to national and international institutional buyers. But it worked out and really the first one, the first one that we bought was an old motel on a little stretch called Tulane Avenue. That eventually became The Drifter.
Dustin Myers: Yeah, that’s really cool. It’s just a neat story of like the legal background, the food and beverage experience, and then kind of the real estate interest and all of that coming together in hotel and hospitality concepts. The Drifter Hotel is I think the first one that we had seen in your portfolio and just really impressed by it. What were some of the lessons that you learned or hurdles you had to overcome in getting that first property off the ground?
Zach Kupperman: There were a lot. There were a lot. I mean, first of all, the location, Tulane Avenue as I mentioned, is a stretch of the city that more recently was known for prostitution and heroin addicts than any sort of area you’d want to spend a meaningful amount of time. That little stretch is a part of Highway 61, which goes all the way from Chicago down to New Orleans. And at one point, it was the main thoroughfare into downtown New Orleans until I-10 was built in the ’60s and basically from then on, it kind of went downhill. And so this hotel, it was originally called “The Crescent Motel” and it was built in 1958 when motels were popping up all over the place. And it made sense because, like I mentioned, this was kind of the main thoroughfare in the city.
Once the interstate was built, the whole area deteriorated. And when we bought the hotel, it’s a motel, and when we bought it, it was known as The Rose Inn. It was an hourly motel. They’re kind of two buildings. One is in the exterior corridor. Twenty rooms are in that building. And then there was basically a single-family home that was completely boarded up, bulletproof glass. There was a pool that was filled in with dirt, surrounded by barbed wire. We found this old postcard when it was built, I think in 1962. Four years after it was built, we found a postcard in eBay and bought it and we were able to show and kind of look at what the motel was originally built, like how it was originally built, the design. And so we work to restore it and bring it back to that.
But in terms of the challenges, the main one being this location, all the lenders thought we were insane trying to go do this. Nobody wanted to give us a loan. That was the big one. There was a bank we had worked with quite a bit. I’ve worked with that bank quite a bit. It’s IBERIABANK. There’s a loan officer there, Vice-President Meghan Donelon, who I have worked with a lot on other deals and we went to her. I think the bank, my guess is, they didn’t say no, but they didn’t jump right at the opportunity either. They pass this around to some other lenders. We went through a lot and eventually came back to IBERIA and Meghan, I want to give her credit. She fought for us to get this initial loan and ultimately we’re able to get it after kind of a long slog talking to a whole bunch of different lenders, primarily because it was a first time hotel, my partners and I doing an actual hotel and it was in this location and it was run down and it was known as not a particularly good area of town and certainly not an area for tourists. So I’d say that was the biggest challenge by far.
Jeremy Wells: Sure. And have you found that you mentioned that was your first early jump into the hotel industry and your first hotel for you guys. I mean, has it gotten a lot easier in the properties after that or have you faced the same challenges?
Zach Kupperman: The lending side’s gotten easier. My projects have all increased in kind of scale and scope and they have had each a unique set of challenges, some of them, same as The Drifter, some of them different. In some respects, it’s gotten easier because I know a little bit more, what I’m doing, but the projects have all increased in complexity as well. So I’m still learning a lot and there’s a lot of just new things that pop up on each project that keeps it interesting.
“I’m still learning a lot and there’s a lot of just new things that pop up on each project that keeps it interesting.”
Jeremy Wells: Yeah. Yeah. I mean, it sounds like, I mean, your whole life has kind of been spent learning and growing and that’s really neat to hear that. Seeing New Orleans going through Hurricane Katrina back in 2006 and then the housing market collapse a little bit shortly after, now the pandemic and like the results of that, there’s a lot of lessons and things that you’ve probably seen in that time. What lessons have you been kind of learning and what’s similar between the pandemic now and Katrina back then and how have you been pivoting and adjusting?
… The people of New Orleans are incredibly resilient.
Zach Kupperman: Yeah, definitely. I think there’s a few different lessons there. One, the people of New Orleans are incredibly resilient. And going back to September 11th that crushed the hospitality and tourism industry, New Orleans is so dependent upon that. That had an outsized impact here. Then we had Katrina, then we had the financial collapse, then we had the BP oil spill, which a lot of people forget about. That was a major deal. It didn’t necessarily impact the physical built environment in the city, but it had far reaching impact on a lot of the industry, especially right outside of New Orleans. And that was pretty significant, and the pandemic.
And so New Orleans keeps getting knocked down. We keep getting back up. I think in the years since Katrina, Katrina was of course terrible and lots of people lost their lives and everything was destroyed and lost loved ones and loved things. But in the end, I think the silver lining is that for the first time in maybe 40 or 50 years, the city, it was an opportunity to look at everything through a fresh lens and say, “Hey, all this stuff has not been working for decades. We have been in the slow decline since 1965 of our population and businesses left.” And it was really this catalyst to start fresh and rethink and there was a new wave of civic engagement and optimism.
I feel it up until the pandemic, the last 10 years have really been some of New Orleans’ strongest periods of time where we have seen a lot of growth. Not just economic growth, but there’s been a diversification in the economy. Traditionally it’s been tourism-hospitality and the port and oil and gas, and those things are still kind of the pillars and very strong, but there’s been a lot of stuff in kind of the art side, digital media, tech, biotech. There’s been an advancement in a lot of jobs and that side of things. I think public education and crime have always been major issues here and both have been making really incredible strides. I think last year was the lowest murders we’ve had in about 45 years, and public education, while there’s still certainly long way to go, that it’s been getting better and better and it’s probably the best it’s ever been, at least in my lifetime, my adult life.
So I think there’s a lot that we’ve learned from that and how to keep on going. And I think New Orleans, those lessons generally have served us well through the pandemic. I think the city here has taken a particularly outsized hit because so much of the economy is based on tourism and hospitality. And so we have an outsize depression relative to other cities in the economy and significantly more job loss in those arenas that are not necessarily coming back anytime soon.
So I think the downside is we’ve been hit hard, but the upside is we’ve learned a lot and how to be resilient, how to bounce back. I kind of deal with these thing. New Orleans is the kind of place a lot of people love being here for the quality of life and for the culture and for the non sort of job stuff. The problem New Orleans has always had is it’s a city with a bunch of fortune 500, hiring a ton of people every year. And so figuring out the job element has always been the challenge. And perhaps one of the things that comes out of the pandemic is if people have a little bit more freedom to work where they want, hopefully they’ll choose to work here in New Orleans. That’s my hope at least.
just my own personal journey, it’s just kind of getting out there and taking risks
And I think other kind of lessons, just my own personal journey, it’s just kind of getting out there and taking risks and doing stuff and looking back on what I’ve done. There was a big jump making, making the jump from practicing law to start a company, that took a lot. That was a lot of faith and a leap there and a lot of support from my wife, frankly, who was extremely supportive in making that call. And the same thing going from when Dinner Lab closed, instead of going back to a corporate setting or to practicing law, starting Kupperman Companies and going the sort of entrepreneurial real estate path was also a big leap. And I’ve learned so much of success and business’s momentum. Just keeping the momentum, the energy, getting your name out there, opportunities, creating opportunities for yourself by taking risks and over time, opportunities will start coming to you.
So I think the pandemic was a major hit to the momentum that we as a firm had and we’re still facing quite a few challenges with our existing hotel portfolio and some of our music venues and frankly, everything. But overall and all things considered, I feel lucky about where we are and grateful that we are where we are and that things are still pointing in the right direction.
Dustin Myers: Yeah. That’s really cool. Just hearing your background, I think you’re a Renaissance man or something like that. You’re into everything. That’s really cool. I also noticed that you invest time into kind of the art scene there in New Orleans, as well as the tech startup scene. It seems like you’re really committed to building that community. On those topics, what kind of led you into that and what’s the value that you see there?
Zach Kupperman: Yeah. Yeah, definitely. I think both of those are just areas of personal interest for me on the tech side of things. When I was in law school and I found myself wishing that there was something like a tech crunch for New Orleans somewhere, I wasn’t in the tech world, I was a student at the time, but I wanted to find a way to kind of follow along with the people and the companies and the players and the products and there’s really nothing like that. And so the idea to just do that, it stuck with me for a while and a few years later, still nobody had done it. I graduated law school, nobody had done it, and I was getting more and more involved in the startups. I’ve started another company at the time and finally just decided to sit down and do a blog. And I created Silicon Bayou News, which is designed to do that very thing. And that’s kind of the source of record for tech and startup news in New Orleans.
I started it on a Sunday. It took me like five hours to figure out how to do this really ugly blog and just get it up on WordPress and the next day was the beginning of what was a program here. It still is called New Orleans Entrepreneur Week. We just got a lot of traction and took off, got a lot of writers. And since then, it’s been around almost 10 years now. So that’s been very cool. That’s been a way to stay involved and then jumping more into the startup scene with the Dinner Lab and other things. It’s an interesting path for the city of New Orleans and the people here to create those jobs, generate wealth and build a city that hopefully my kids one day will not just want to live here, but will have the opportunity available to them to stay in New Orleans. So that’s interesting to me on that front.
I love art
On the art front, I love art. And music and culture is a major part in New Orleans. I have zero artistic talent. And so the way I find that I can help contribute to that aspect of the city is just supporting it how I can. I’m on the board of a school here called NOCCA, which is the New Orleans Center for Creative Arts. It’s a public high school that supports and has this really incredible curriculum. You can be a full-time student there or you can go to a different public high school, but spend a portion of your day there. There’s a lot of really incredible tracks to go down. I would describe it as unusual for a high school curriculum. There’s a whole culinary program. There’s a lot of art, music instruments. There’s a big aspect on that. And I’ve really enjoyed helping and participating on that side of thing. And that has produced some pretty incredibly well-known folks out there, Trombone Shorty and Jon Batiste. There’s a lot of well-known artists, musicians throughout the country that have come out of NOCCA.
Jeremy Wells: So cool. You have your hand and interests in a lot of different things. And I love the entrepreneurial spirit that you have and just the risks that you’ve taken apparently have paid off and that’s really cool to see that. As you’re kind of talking about dreaming of the future and building a home and a place for your kids, just out of curiosity, we were wondering, just kind of a fun question of if there were no hurdles or you didn’t have any issues with financing or like municipal approvals or any of that type of stuff, what would your dream projects look like?
Zach Kupperman: Yeah, that’s a good question. I’m working now on what I would say is my dream project and that’s Hotel St. Vincent. It is a hotel here in New Orleans. It’s in the Lower Garden District, which is a really cool neighborhood. There’s a lot of historic character there. So it’s under construction right now. It was an old orphanage and infant asylum originally built in the 1860s. There’s actually five historic buildings on a relatively large piece of land here on a street called Magazine Street, which is kind of the primary shopping and dining destination that runs throughout the Garden District, Lower Garden District, and Uptown New Orleans. And it’s a really cool story. The woman who founded it is named Margaret Haughery. She was an Irish immigrant that came to New Orleans in, I think, the 1840s, was an entrepreneur, started a baking company and built this baking empire in New Orleans. And her children, she had two children and a husband that all died of yellow fever, and she donated the money in the early 1860s to start the St. Vincent’s Infant Asylum. And the original building was built in 1864. And it was basically a place for children to go with yellow fever.
And over the years, it has served a variety of kind of similar purposes from an orphanage to a birthing center, to kind of a charity birthing center and home for unwed mothers. And over the years, just kind of has always been something like that until the gentlemen we bought the building from, he converted it into a kind of a rundown hostel in the early ’90s. And my partners and I, we had been trying to buy the building literally for years, and finally we were able to get it under contract in 2016, closed on it in 2017, and had been working on it since then. And we’re about six months out now from opening. So that is my dream project. It’s a very, very cool series of historic buildings on an amazing street, Magazine Street, in one of the best neighborhoods in the city, the Lower Garden District.
The project itself is going to be a 74-room boutique hotel. There are five buildings, 74 rooms. There’s going to be three bars, two restaurants, there’s a membership swim club element to it, and then there’s one new construction building that we’re building that’ll be an event center for receptions and some backhouse space. The team we have has really just been an incredible team we put together. My partners in the deal and the designers on the project are Liz Lambert and Larry McGuire, who are both out of Austin, Texas, and have done plenty in the hotel world and food beverage world before. We’ve got a great local architect, MetroStudio, that’s done a lot of hospitality work. Our landscape group, VIDA, who’s out of Costa Rica, and they actually worked with us on The Drifter and did an incredible job. And so the team is really incredible, the project’s incredible, very excited to get that one open.
Dustin Myers: That sounds amazing. So much history and just texture to pull from as you build out that brand, that’s going to be awesome. Can’t wait to see how it all comes out.
Zach Kupperman: Yes. Yeah. And that that’s been a long slog. We first looked at that building I think in 2011 and finally got it closed 2017. And then it took a lot to finance, same kind of story. A lot of lenders said no. Finally, we were able to work out a deal and it’s actually the same lender who I worked with on The Drifter. They’ve been incredibly good partners, IBERIABANK, which is now part of First Horizon Bank. I can’t say enough about the partnership we have with them. They’ve been really incredible through the whole process and there’s a big tax credit element to the historic restoration of this one. What we’re doing on the interior is bringing the buildings kind of back to really preserving the historic fabric and enhancing it, but doing it in a way that sort of keeps all of the real historic elements of the building in place. The big tax credit element, state and federal historic tax credits where it was necessary to get the project done. Otherwise, it would have been too challenging without that.
So I’m really, really excited. New Orleans, for all of the amazing hotels and such an emphasis on hospitality, it’s only been very recently and it’s still few and far between for the type of hotels that I really enjoy, the kind of lifestyle properties not necessarily change, but interesting stuff in New Orleans. So it’s only been recently that a few of these have popped up and there’s some great examples out there, in addition to The Drifter Hotel, Hotel Peter & Paul in the Marigny is a pretty incredible one. There’s a new one that opened on St. Charles Avenue called The Hotel Chloe. So those are there, but St. Vincent is designed to really push things forward in New Orleans that the hotels really don’t have a similar product coming online. So we’re really excited about that.
Dustin Myers: That’s really cool. So I know St. Vincent will be a huge emphasis for you guys in the next six months. Do you have any other projects or initiatives for Kupperman Companies that you’re looking forward to in the near future?
Zach Kupperman: We do. We’ve got a pretty full pipeline of a bunch of really exciting stuff. There’s one project in the heart of the French Quarter on Royal Street that we closed on in May and we’re very excited about that one. We haven’t quite announced what that is, but it’s going to be kind of a boutique retail and F&B project that the type of product does not exist in New Orleans at all. And Royal Street, for those of y’all that don’t know, that’s, that’s the main sort of high-end shopping street in the French Quarter, all of the really incredible antique and even more than antiques, like antiquities and incredible art, that’s the main street where everything, all the real high-end and authentic stuff is sold in the French Quarter. So we’re really excited.
The building itself was actually the home of Zachary Taylor, who’s the 12th President of the United States, and the building literally goes back 200 plus years. It’s an incredible, very cool building, same type of thing. The owners of it, downstairs was leased to an antique shop, but the rest of the building and the upper floors, the family that owned it didn’t put any money into it. There’s really this incredible carriageway and courtyard that we’re really excited about restoring. So that’s one of them. And then another is this project, Uptown, that’s going to be a new multi-family project we’re working on that’s going to involve some micro units and some technology features, what would be the first of its kind in Louisiana. So both of those, we’re very excited about.
Jeremy Wells: That’s really cool. Well, super exciting to hear about the upcoming future for you guys and can’t wait to see how it all plays out and appreciate Zach you spending some time with us. What’s a good way for people to check you guys out online?
Zach Kupperman: Yeah. You can find us at kuppermancompanies.com. It’s my last name, K-U-P-P-E-R-M-A-N, companies.com.
Jeremy Wells: Cool! Well, Zach, appreciate you taking the time and we really enjoyed the conversation and looking forward to continuing it and seeing what’s ahead for you guys.
Zach Kupperman: Yes. Jeremy, thank you so much. Really appreciate it. This has been incredible. Yeah. Thank you very much.
Jeremy Wells: Thanks, Zach.