Invest in Home2 Suites by Hilton Charlotte Uptown — Charlotte, NC

Unique investment opportunity in a top Fin-Tech market

We are pleased to invite you to invest in the mezzanine loan made to the owner of the 180-room, extended-stay Home2 Suites by Hilton in Charlotte, NC. Invest today and enjoy attractive quarterly returns from day one.

10.9%

Projected Annual returns

64.9% LTV

 Based on stabilized value

$25K

Minimum Investment

3 Years

Anticipated Term

Deal Highlights

Built in 2019 from reinforced steel, concrete, and glass construction, the Hotel is a 10-story, 180-key extended stay hotel. The hotel is located in the Uptown submarket of Charlotte near several regional demand generators including, among others: Charlotte Convention Center, NASCAR Headquarters & Museum, Bank of America Stadium, and Spectrum Center. The Hotel’s amenities include a 1,100 square foot meeting room, fitness center, outdoor swimming pool, and guest laundry area. The hotel features spacious, modern suites with innovative working walls which create flexible spaces for relaxing, cooking and working. Home2 Suites by Hilton is one of the fastest-growing brands in Hilton’s history. Home2 Suites by Hilton understands the needs of value-conscious travelers, therefore the Home2 Suites by Hilton hotels are green-focused extended-stay hotels that were designed with unique customizations, tech-savvy enhancements and plenty of space for a guest to call their own. From studio and one-bedroom suites to an Inspired TableTM breakfast, free Wi-Fi and other complimentary amenities, Home2 Suites hotels are the kind of place where a guest can kick back and be themself.

Newly-Constructed, institutional-grade property

Built in 2019 from reinforced steel, concrete, and glass construction, the Hotel is a 10-story, 180-key extended-stay hotel. The Hotel’s amenities include a 1,100 square foot meeting room, fitness center, outdoor swimming pool, and guest laundry area

Strong ramp-up during Covid

Despite the pandemic, the Hotel achieved 100% RevPAR index before its first full year of operations. Further, the property was cash flow positive for the 12 months ending December 2020 generating $473,605 in net income

Additional equity invested by Sponsor

The Sponsor invested $4.1M of additional equity at closing proving its commitment to the asset. Further, the Mezz Loan’s exposure equates to a 64.9% LTV based on the as-stabilized value, per HVS’s November 2020 appraisal of the Hotel at $49.3M. Lastly, $3.4M is reserved for operating costs and debt service shortfalls, and the Sponsor has guaranteed to continually replenish the reserve with an additional $1.0M should the reserve fall below $1.0M.

Loan basis 26% below Sponsor’s construction cost

The Mezz Loan’s last dollar exposure equates to $178K per key as compared to Sponsor’s construction cost of $241K per key

Risk-mitigated investment structure

An interest and expense shortfall reserve, a cash flow sweep in effect at closing and intercreditor agreement has been structured into the deal to ensure payment for taxes, insurance, senior loan debt, operating expenses, and mezzanine loan in case of default

Strong franchise affiliation

The hotel benefits from its approximately 16-year term remaining franchise agreement with Hilton, one of the world’s largest hotel companies

PROJECTED INVESTOR DISTRIBUTIONS SCHEDULE

 

Investors are expected to receive distributions on a quarterly basis. For the projected investment hold period of three years, distributions are projected as follows assuming a $100,000 investment in the Partnership:

2021

2022

2023

2024

Q1

$2,669$2,685$93,928

Q2

$2,719$2,719$2,747

Q3

$2,729$2,729$2,771

Q4

$2,709$2,714$2,767

 

All distributions contain varying amounts of return of principal. The projected final distribution in 1Q2024 includes any un-returned principal.

Market Highlights

Third-largest financial center in the U.S.

Charlotte is home to 9 Fortune 500 company headquarters that represent the finance, energy, and manufacturing industries. Among these are Bank of America, Truist Financial, and the east coast operations of Wells Fargo making Charlotte the third-largest financial center in the U.S. Behind New York city and San Francisco. There are approximately 82,000 workers employed in the finance and insurance industry

Tourist attraction

Leisure demand proximate to the area includes the following major tourist attractions: NASCAR Headquarters & Hall of Fame, Charlotte Motor Speedway, Bank of America Stadium, and the Spectrum Center

Steadily-growing local market

The Charlotte market achieved an average annual compound population growth of 1.8% from 2007 – 2009, and is forecasted to grow 1.1% annually between 2020 and 2024. Further, household average income is forecasted to grow by 3.3% per year during the same period

America’s Top Tech Town

ComTIA identified Charlotte, NC as the nation’s leader in tech jobs due to its quality of life for tech workers, salaries, job availability, job growth and cost of living

Healthcare hub

The Charlotte area is a growing healthcare hub home to national and international leaders in the health care and life sciences field. Approximately, 1-in-9 workers in the area is employed in health care or life sciences

Who we are

Driftwood Capital is an innovative investment business built on the solid foundation of a most trusted name in hospitality. Experts in acquisitions, development and lending source, underwrite, structure and close investments with major hotel flags, all secured by sponsor capital. Side by side with Driftwood Hospitality Management, Driftwood Capital asset manages and oversees operations to deliver the best risk-adjusted returns in hospitality.

Driftwood Capital principals have a substantial track record, transacting on more than $5 billion in hospitality assets through various affiliated management and ownership entities.

The firm’s proprietary DealDirect solution takes the risk out of the investment process; the entire transaction is executed upfront using sponsor capital, and then offered on a deal by deal basis to investors, allowing each to create a customized portfolio of investments that meets their needs.

Only for accredited investors

Unfortunately, investment deals are currently limited to accredited investors only

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Legal disclaimers & footnotes

Projected Investor Distributions Schedule

This investment example, including the projected distributions associated therewith, is provided for illustrative purposes only and is not necessarily indicative of any future investments by Driftwood Lending Partners, LLC (DLP) or the results of any future investments. A complete list of past investments made by DLP is available upon request. This example should not be deemed as investment advice or a recommendation to purchase or sell any specific security. No representations or warranties whatsoever are made by DLP, Driftwood Capital LLC, any of their affiliates, or any other person or entity as to the future profitability of a Fund or the results of making an investment. Detailed information on how the data was calculated is available upon request.

 

General

This investment teaser (this “Teaser”) is being furnished to prospective investors on a confidential basis to provide preliminary information with respect to the DLP Charlotte NC Mezz Holdings, LP (the “Fund”) and the subject matter hereof and may not be used for any other purpose.  This Teaser does not constitute an offer to sell or a solicitation of an offer to buy limited or general partnership interests, which shall only be made pursuant to a future agreement, the operating agreements of the Fund and its relevant affiliates, and additional related disclosures (the “Offering Documents”), as each may be provided by the general partner, in its sole discretion, to prospective investors in the Fund. Any of the information contained herein that is ultimately inconsistent with the contents of the Offering Documents will be deemed superseded by the information in the Offering Documents.

This Teaser, including any of the information contained herein, may not be copied, reproduced, or redistributed without the express prior written consent of the Fund.

In making an investment decision, investors must rely on their own examination of the person or entity creating the interests and the terms of an offering, including the merits and risks involved. No federal or state securities commission or regulatory authority have confirmed the accuracy or determined the adequacy of this Teaser. Any representation to the contrary is a criminal offense.

Prospective investors are not to construe any of the information set forth in this Teaser as investment, legal or tax advice. A number of factors material to a decision whether to invest in the Fund have been presented in this Teaser in summary or outline form solely in reliance on the financial sophistication of the prospective investors. A prospective investor should consult with its own legal, investment, tax, accounting and other advisors to determine the potential benefits, burdens and other consequences of an investment in the Fund.

This Teaser contains “forward-looking statements” relating to the Fund’s operations that are based on current expectations, estimates and projections and are subject to a number of significant risks and uncertainties. Any such forward-looking statements contained herein should not be relied upon as predictions of future events. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “continue,” “typically,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects” or “anticipates” or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans, intentions or unrealized investment results. Such forward-looking statements are subject to numerous risks and are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and may not be realized. In that regard, the matters discussed in this Teaser or other factors could cause actual results and other matters to differ materially from those in such forward-looking statements. As a result of the foregoing, no assurances can be or are given as to future results of operations or financial condition of the Fund.  Similarly, no information provided herein with respect to previous performance of any affiliates of the Fund, including Driftwood Capital, LLC, as the sponsor of the Fund, should be construed to indicate or suggest future results and performance.