PhillyDeals: Ex-banker finds success in Indian restaurant chain

Munish Narula took his Wharton MBA to work on Wall Street. Didn't last, he said: "I was an investment banker for a couple of years, at Credit Suisse First Boston. A lot of money. No fun."

So the New Delhi native went into the food business. Narula earned modest local fame over the last four years as he built his Indian lunch take-out idea, Tiffin (an Indian-English word for lunch, also take-out trays), into a mini-chain of Philadelphia-area restaurants (top seller: Chicken Tikka Masala, in creamy tomato gravy, $12).

Indian food has penetrated corporate Philadelphia "thanks to the Sidhus and Guptas who have exposed people to the food," says Narula. He means local bosses like Jay Sidhu, head of Customers Bank and formerly of Sovereign Bank, and Raj Gupta, head of chemical-maker Avantor Performance Materials Holdings, and formerly of Rohm & Haas.

How did Narula raise money for new sites in this economic slump? "We have no [outside] investors," he told me. "Valley Green Bank has been our partner."

Narula met Valley Green founder Jay Goldstein at City Hall last year when the Merchants Fund and the city gave Tiffin $50,000 to fix up the storefront of its second restaurant, on Girard Avenue.

"Larger banks were very reluctant to lend. So we moved our banking relationships from PNC and Wachovia to Valley Green," Narula said. "They were more than willing to work with us."

Now Narula is preparing a larger dinner restaurant for developer Carl Dranoff's 777 South Broad Street apartments. "Carl is a visionary," Narula said. "He says we have to do something big."

Narula just won a contest sponsored by food supplier Sysco Corp., beating 170 competing restaurants for the title "America's Next Top Restaurant Franchise," plus legal and advisory services to expand.

And he's thinking bigger still. He's been watching South Philly sandwich shop Tony Luke's add new stores, from the Jersey Shore to the Arab island nation of Bahrain, by partnering with Swedesboro-based, mass-market butcher and side-dish specialist Rastelli Bros.

Narula says he's started talks with potential partners to take Tiffin and its Indian lunches global.

Members of the Shah family, who run Hersha Hospitality Trust, are betting big on the economic recovery.

The family arranged Tuesday to borrow up to $250 million from TD Bank and other lenders - almost double their old $135 million credit facility. The Shahs raised more by selling five hotels in upstate Pennsylvania, western New England, and other slow-growth markets.

Hersha will use the cash to buy more hotels around New York, Philadelphia, Boston and Washington, says chief executive Jay H. Shah.

Founder and chairman Hasu P. Shah remains in Hersha's old Harrisburg headquarters. But his Ivy League-educated sons, CEO Jay and president Neil H. Shah, now work from the Penn Mutual tower in Philadelphia's historic district, closer to the company's East Coast growth markets.

The Shahs opened their newest hotel Tuesday, a $150-a-night HyattPlace, on the renovated King of Prussia site where they formerly ran a $120-a-night Mainstay Suites.

"We have taken a bet on the recovery," Jay Shah told me. "We're relying on the corporate transient traveler in the Northeast markets. You've got the recovery in financial services. You're starting to see signs of life in the pharma industry."

The Shahs say they called the bottom of the market in 2008, when Hersha bought New York's Tribeca Hilton Garden Inn for a price that works out to $400 a room; recent Manhattan deals, Jay says, have boosted prices back to $500, raising Hersha's value.

At around $6 a share, Hersha stock remains down at the same price it fetched in the early 2000s. But it is up 132 percent for the year, compared with 39 percent for other real estate investment trusts, and 46 percent for other hotel REITs, according to Bloomberg LP. It kept paying a steady dividend through the downturn.