Noble's People Over Profits Approach Attracts Both
Mit Shah, founder and CEO of Atlanta-based Noble Investment Group, didn’t simply draw names out of a hat when choosing a moniker for his firm back in 1993.
“The name ‘Noble’ was chosen intentionally to reflect a guiding principle: doing the right thing, even when it’s not the easiest or most immediately profitable choice,” he explains. “It was a word often used in my family growing up – one that spoke to the way we should act, make decisions and conduct ourselves. That philosophy remains at the core of Noble today.”
Speaking of today, Noble is currently a multi-billion-dollar investment manager in the real estate travel and hospitality sector. Since its inception, it’s successfully completed more than 180 hotel investments and maintains a stable of $6 billion in assets.
Honoring the American dream
In a way, one could argue Shah – the son of Indian immigrants – was always destined for a life in hospitality. His parents purchased the Winkler Motor Inn in Winston Salem, N.C., in 1979 when Shah was 10 years old.
“I spent the formative years of my life working alongside them, cleaning rooms and working the front desk,” he says. “I learned at a young age that hospitality is a people business, first and foremost. The hospitality industry is in my DNA.”
He continued to work in the industry throughout college and beyond when Shah landed a job with a small firm that invested in some of the first select-service and extended-stay hotels. From there, he learned how to read construction plans and architectural documents, sat in meetings with respected developers and worked on some of the first CMBS deals that were getting done.
“It made me realize I had the skills to pursue hotel investing on my own - it was simply a matter of having the courage and the capital,” Shah adds.
His first investment, the purchase of a Hampton Inn – was funded by refinancing his parent’s motel, in addition to a few other minority investments. This single hotel and investment became the foundation for Noble.
Choosing a lane
Shah attributes much of Noble’s success over the years to its investment philosophy.
“It’s rooted in resilience across market cycles, disciplined risk management and operational expertise,” he says. “Over the past 30-plus years, we have built a cycle-tested track record, consistently delivering strong, risk-adjusted returns by focusing exclusively on select-service and extended-stay hotels – a sector that has demonstrated high liquidity, low cap rate volatility and strong profit margins relative to other real estate property types.”
Shah views extended-stay lodging as one of the most undersupplied segments in the U.S. hotel market, with demand outpacing supply by a significant margin. He notes that while this product represents 20 percent of all lodging demand, it only accounts for 10 percent of the total hotel supply, leaving a notable gap in the market.
“At the same time, travelers are increasingly seeking flexible, long-term accommodations that offer affordability, convenience and adaptability to their needs,” he adds. “This shift in consumer preferences, combined with ongoing supply constraints, has created a compelling opportunity for investment.”
Shah launched the Noble Midscale Extended-Stay Platform last year to capitalize on this market imbalance and expand the firm’s long-term investment strategy within the extended-stay model. The platform will focus on institutional-quality development projects in high-growth markets with strong demand drivers.
“These properties feature compressed development schedules, light-labor models and lower operating costs, delivering 55 percent stabilized GOP margins, 80-plus percent stabilized occupancy and targeted double-digit unleveraged yields by Year Two,” he adds.
Shah also appreciates these assets for their efficiency. He notes that select-service and extended-stay hotels typically require lower capital expenditures than full-service hotels. This efficiency enables Noble to maximize returns while maintaining financial discipline.
Their market resilience is another perk. This is supported by high liquidity, lean fixed costs and strong profit margins.
“Their efficient operating model and consistent, room-driven revenue have contributed to stability and sustained outperformance through economic fluctuations,” Shah says.
Lastly, these models allow Noble to take advantage of fragmented ownership opportunities. More than 80 percent of select-service and extended-stay hotels are owned by small family businesses, many of whom are of Asian American descent, according to Shah.
“This fragmentation creates opportunities for Noble to acquire and enhance asset performance through institutional-quality management,” he notes.
Staying the course
A product type may be resilient, but that doesn’t inherently guarantee the longevity – or success – of its investors. That, Shah believes, comes down to deep operational expertise, capital efficiency and the one thing every investor must possess above all else: discipline.
Shah notes that of the 75,000 existing U.S. hotels, only about 7,000 meet Noble’s minimum investment criteria. Location, naturally, is high on that list. The firm prefers to invest in assets within markets that boast diverse demand generators, leading to proven population and workforce growth.
“These factors contribute to strong lodging demand and long-term asset appreciation,” he says. “Our ability to identify opportunities that align with these criteria ensures that we invest in assets with resilient cash flows and high intrinsic value.”
Part of Noble’s disciplined risk management strategy includes taking a zero-based budgeting approach, stress-testing each scenario to support prudent underwriting and portfolio resilience.
“As an operator, not an allocator, we leverage deep expertise to improve top-line revenue, optimize operating margins and profitability and maximize the value of our investments,” Shah continues. “This hands-on approach allows us to consistently outperform traditional passive investment strategies.”
Noble also maintains a conservative stance, targeting leverage in the 50 percent to 65 percent range, regardless of market conditions.
“The extended period of ultra-low interest rates created a temptation to over-leverage, and many investors who took that approach are now facing challenges as rates have more than tripled,” Shah adds. “Our approach provided stability when rates rose and ensured we were not overexposed in times of economic stress.”
That included the pandemic, when Noble prioritized liquidity management, ensuring it had the capital reserves to sustain operations for at least two years under different economic scenarios. Shah describes his budgeting process as “risk-aware and bottom-up,” incorporating constant scenario planning to remain prepared for any outcome.
People first
Part of Noble’s people-centric nature involves maintaining strong business relationships. This includes those within the smaller fragmented ownership landscape, as well as the bigger players. Noble’s long-term relationships with institutional investors allow the firm to scale its investment strategy while remaining disciplined. Shah recognizes that the ability to undertake larger-scale projects allows his firm to pursue investments that may not be feasible for smaller, independent hotel owners.
One of its recent acquisitions, for example, included the Courtyard by Marriott Indianapolis | Fishers and the dual-brand Hyatt House & Hyatt Place Indianapolis | Fishers. The newly built hotels are located within the Fishers District, a 150-acre mixed-use development in Fishers, Ind.
“Maintaining deep strategic relationships with major hotel brands is central to our investment strategy,” Shah says. “Through these relationships, we act as advisors, providing insight into evolving consumer preferences and helping to shape brand initiatives as our operational expertise allows us to maximize efficiency and performance. This alignment ensures that our investments remain positioned for long-term success.”
Shah prioritizes partnerships with the industry's best brands. This includes those with strong distribution networks and loyal customer bases.
Looking ahead, Shah will continue to stay in his lane of extended-stay and select-service hotels. This is Noble’s wheelhouse – and he doesn’t see that changing anytime soon.
“We have an in-depth understanding of how these assets operate,” he says. “Our ability to optimize performance, streamline operations and enhance guest experiences allows us to unlock value that others often overlook.”
So for now – and, likely, always – the firm will continue to leverage its unique ability to identify opportunities where others may not, understanding both the hidden risks and untapped potential within each asset. Once it does, Noble’s hands-on experience will be deployed to enhance hotel performance through disciplined management, cost controls and revenue optimization.
It will also focus on strategic value-add initiatives, targeting properties where Noble can implement renovations, rebranding and operational enhancements that drive long-term value. It’s biggest focus of all, however, will remain the people – the ones who occupy the rooms, support the hotels’ operations and provide exciting opportunities for investment.