When Steve Schlundt first joined Minneapolis-based CSM Corp. in the mid-1990s, the real estate company had only one hotel. Since then, CSM has built or purchased more than 50 hotels with nearly 7,000 hotel rooms across the United States. One of its latest is in Redmond, Wash., close to Microsoft Corp.’s headquarters. Locally, one of its better-known properties is the Renaissance Minneapolis Hotel, the Depot, which is currently being renovated to add more event space. The company also has residential and commercial properties. On its residential side, CSM is involved in a much-discussed apartment project it wants to build with Bloomington-based Doran Cos. on a parking lot near the General Mills research facility in the Marcy-Holmes neighborhood of Minneapolis. “Having diversity in those types of businesses has allowed CSM to be able to weather downcycles and take advantage when business is strong,” said Schlundt, who is the president of lodging and residential at CSM. He stressed that, whether they are living there or just staying for a few days at a hotel, people are looking for experiences in their homes and also in their hotels. Excerpts from an interview:
Q: What makes CSM unique?
A: Gary [Holmes, chief executive of CSM] has always been an opportunist. In fact if there is a barrier to entry that’s a little more difficult, we like that because it doesn’t mean that everyone else is going to be building in the same place. We’ll take advantage of where the market is … and find, whether we are building something or buying something, where we can make a difference.
Q: How is technology influencing hospitality?
A: There’s such a focus on hotels having things outside just typical guest rooms. How do we take especially the millennials and how do we make the whole hotel user-friendly for computers whether it’s hot spots throughout the hotel to being able to allow people to hook up to printers to be able to do work outside of the guest rooms? Our meeting rooms [in Redmond] we have walls that are glass that are all writable. The meeting rooms are set up in a way that, instead of large ballrooms, we went to smaller rooms that are designed with large TVs so that you can go from the computer to the TV screen. Multiple TVs in a room, whether it’s the type of meeting that would have different people doing presentations you can throw the information on the walls with the touch of a finger. … It’s moving toward where you can do check-in on your phone, you can get into your room using your phone.
Q: How important is communal space vs. space you can book and rent out?
A: So much of it is getting out of the rooms and being in the public space. So where we have tried to go especially with the Redmond [hotel] is we have shuffleboard out in the courtyard area. We have bocce ball out in the public space. We’ve created some activity centers to be able to allow people to come down and experience that as opposed to being just up in their rooms.
When you get into convention space, it’s a little bit different. At [the Depot], the idea was to be able to put more meeting space in and then to bring in some of the group-type business or convention-type of business. We needed even more meeting space and sleeping space to go with it. So we took the water park that we had and we took that out and we built a tower on top of that and then added a sixth floor with 110 rooms, which allows us to be able to attract some of the larger corporate events that take place in Minneapolis. And now we are adding another 25,000 square feet of meeting space.
Q: Here in Minneapolis a lot of the hotels that have opened recently have had a boutique, local feel. Is that design a new hospitality trend?
A: It’s been going on for awhile, but a lot of it is dictated by what’s going on in the market right now. When you get into a city like Minneapolis, the brands that are available … you are limited on what’s left. So companies like ours, if we want to go into a market like Portland and Seattle, you have to first look at and see what brands are there, what brands are available.
And then, from there, a lot of brands are gone. And you start getting into boutique-type names just because that’s available … and there’s some advantages and disadvantages to doing a boutique-type of hotel. You have something unique, which is great, but when the economy is a little tighter, some of those brands don’t have the horsepower that you get by having a brand name.
Q: How are you appealing to millennials in residential?
A: Similar to the hotels, the community areas are an important part of anything that’s being built new. Whether it’s a courtyard area, whether it’s outdoor entertainment, indoor entertainment, somewhere for people to get together in groups. There’s just such a social aspect of today’s customer vs. yesterday’s customer. Yesterday’s customer … was much more go in and do your work and you move on. Today’s customer and future customers are geared more around the experience.
Whether it’s hotels or apartments, whatever lets me get outside my room and have a social activity is very popular.