Driftwood Capital, a vertically integrated commercial real estate investment, development, and lending platform specializing in hospitality, announces that it has provided a $9 million mezzanine loan toward the recapitalization of the 180-key Home2 Suites by Hilton Charlotte Uptown, located in Charlotte, North Carolina. The loan comes behind a $23 million senior mortgage provided by Benefit Street Partners. The debt was used to take out the existing construction loan on the hotel, which opened in November of 2019.
Driftwood’s Lending Fund originates mezzanine loans and preferred equity investments in the $5 to $75 million range and then, post-closing, syndicates participation in such opportunities to accredited investors. The Fund has placed more than $30 million of capital in high-quality hotel mezzanine loans and preferred equity investments in 2021.
The loan on the Charlotte property has a three-year term, with no extension options, and represents a 65% loan-to-value.
“This investment generates an attractive risk-adjusted return for our investors with a total investment exposure that is significantly below replacement cost,” said David Steiner, Driftwood’s Managing Director of Capital Markets. “The demand for our type of capital in the aftermath of the pandemic, combined with our firm’s operational and equity expertise, has resulted in a robust pipeline for Driftwood’s Lending Fund.”
Added Chairman & CEO Carlos J. Rodriguez, Sr., “This Fund was designed to provide a much-needed source of capital to hotel owners and lenders struggling to regain their footing, while also giving our high-net-worth investors an unprecedented opportunity to participate in investments backed by high-quality hotels in the U.S. It has been extremely well received so far.”
Located at 610 S Caldwell Street, the Home2 Suites by Hilton Charlotte Uptown is just off I-277, within blocks of Bank of America Stadium and the Spectrum Center, across the street from the NASCAR Hall of Fame. Novant Health and Atrium Health medical centers are a five-minute drive away. The pet-friendly hotel amenities include a fitness center and business center, along with free breakfast and free WiFi.
Driftwood Capital’s unique syndication model allows accredited investors to co-invest in institutional-quality hotel assets or capital solutions at an attractive basis. The company has raised more than $250 million for its three separate Development, Acquisitions and Lending funds. Since 2015, the principals of Driftwood Capital have placed more than $650 million in capital with their investor network of family offices, high-net-worth individuals, and others, representing a portfolio of more than $1 billion in hospitality assets. Among these assets are the Marriott Mission Valley San Diego, the Sheraton Park City, and the Margaritaville Lake of the Ozarks, as well as the newly constructed Canopy by Hilton West Palm Beach, Canopy by Hilton Tempe, and Tru by Hilton / Home2 Suites by Hilton Ft. Lauderdale Downtown.
About Driftwood Capital
Driftwood Capital is a vertically integrated commercial real estate investment, development, and lending platform specializing in hospitality. The principals of Driftwood Capital boast a 30+ year track record transacting on more than $5 billion in hospitality assets through various afﬁliated management and ownership entities. In 2015, the principals of Driftwood Capital launched a unique syndication model for accredited investors to access otherwise exclusive institutional-quality hotels. Through this innovative syndication model, Driftwood Capital successfully turned $50 million of initial investment into more than $1 billion in assets across 18 hotels and 5 development deals with more than 5,100 rooms in 12 states. All Driftwood Capital funds beneﬁt from the principals’ afﬁliation with Driftwood Hospitality Management, which currently manages over 70 full and limited service hotels with more than 13,000 rooms across 22 states and is regarded as a long-standing industry leader and best-in-class operator.