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Hyatt Place — Washington, DC

Open for Investment

You are invited to participate in the mezzanine loan made to the owner of the 200-room Hyatt Place NoMa in Washington, D.C., by investing in Driftwood Capital’s latest lending fund.  Invest today and enjoy attractive quarterly returns from day one.

9.6%

Projected Cash-on-Cash return

$50K

Minimum Investment

3 Years

Anticipated Term

52.7% LTV

Loan ratio to Pre-Covid Appraised Value

Deal Highlights

Collateralized by the equity of the owner of a 14-story. 200-key Hyatt Place built in 2014

The loan is protected by an interest reserve that covers operating-related expenses in addition to all interest payments for the Senior and Mezz Loans for a projected period of up to 18 months

Any excess cash flow from operations, after the combined debt service payments for the Senior and Mezz Loan replenishes the interest reserve

mezzanine loan Total exposure is equal to $192,500 per room, well below the stabilized value of $266,000* and replacement cost of $275,000 per room

Experienced sponsor with a portfolio of 19 hotels with 2,630 rooms

Sponsor injected $11.8 Million of equity at closing

Located in the NoMa neighborhood of D.C., the capital’s fastest-growing urban submarket

*Per HVS’s appraisal in July 2020

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:

2020

2021

2022

2023

Q1

$2,375$2,367$2,351

Q2

$2,401$2,377$2,377

Q3

$2,428$2,403$101,620

Q4

$2,428

$2,428$2,403

(Note: 3Q2023 distribution is inclusive of return of principal)

Market Highlights

Located in Washington, D.C.’s growth corridor

  • The Hyatt Place is the newest hotel in Washington, D.C.’s fastest-growing urban submarket. Both NoMa and the adjacent Union Market are witnessing a massive transformation of derelict buildings and empty surface lots into an acclaimed, mixed-use, urban community
  • NoMa has seen approximately $8 billion private investment since the early 2000s, which has yielded 13.7 million square feet of office space and nearly 6,400 residential units (1)
  • The submarket now has 60,000 daily workers and over 370,000 square feet of highly activated retail space (2)
  • Significant runway for growth still exists, with 3.5 million square feet of additional commercial space under construction and almost 14 million square feet planned (3)
  • Large number of GSA tenants located within the NoMa neighborhood include the Department of Justice, Federal Energy Regulatory Commission, the Department of Education, the Securities and Exchange Commission, the Internal Revenue Service, and Customs and Border Protection. Most notably, the Department of Justice has expanded in the neighborhood by taking almost 500,000 square feet at Three Constitution Square in 2017 and has fully pre-leased the 523,000 square foot Four Constitution Square building that is under construction (4)

EXCEPTIONAL TRANSPORTATION AND ACCESSIBILITY

  • We believe the Hotel benefits from its proximity to Washington, D.C.’s CBD via the NoMa / Gallaudet Metro Station (Red Line) and New York Avenue
  • The Metro’s Red Line offers guests direct access through the city’s office core in the CBD and to Bethesda and Silver Spring in Maryland
  • Union Station – the busiest station in the Metro system – is just one stop away from the Hyatt Place and provides access to Amtrak, MARC train, and the Virginia Railway Express lines
  • New York Avenue is a major urban thoroughfare that is a direct artery into the CBD, which also provides convenient access to I-395 and I-495, as well as both Washington Reagan National Airport and Baltimore-Washington International Airport

STRONG & STABLE MARKET

  • D.C. Metro Area historically outperforms the nation during broad economic contractions
  • The economic support provided by the federal government, contractors, and a rapidly growing base of tech employment have and will continue to help support the local economy and lodging demand in the near term
  • The District of Columbia, Virginia, and Maryland have seen far fewer unemployment claims than other major markets over the last eight weeks; the D.C. Metro Area has the lowest percentage of at-risk employment of any major city in the country

Additional information is available from Driftwood Lending Parterns upon request.

Who we are

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. All Driftwood Capital funds benefit from the principals’ affiliation with Driftwood Hospitality Management (“DHM”), 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.

Driftwood Capital’s ever-growing syndicated investor network has expanded to more than 850 investors comprised of high-net-worth individuals, family offices, and small institutional investors across the globe. Through strong partnerships with leading hotel brands and lenders, a sterling reputation among brokers, a professional team of industry experts, and an affiliated best-in-class hotel operator, Driftwood Capital provides the necessary structure and high-quality opportunities for accredited investors to achieve long-term capital growth and wealth preservation.

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 a Fund or the results of any future investments. A complete list of past investments made by Driftwood Lending Partners, LLC 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 Driftwood Lending Partners, LLC, 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

All content on this page is general in nature, not directed or tailored to any particular person, and is for informational purposes only. This is neither an offer to sell nor an offer to buy limited partnership interests in a fund managed by an affiliate of Driftwood Capital LLC (each, a “Fund”). Such an offer will only be made pursuant to each Fund’s Confidential Offering Memorandum. An investment in each Fund is subject to a high degree of investment risk, including the possible loss of the entire amount of an investment in the fund. A potential investor should carefully read and review the confidential offering document, including the description of risk factors, before making an investment in a fund. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any data presented. Neither Driftwood Lending Parterns, LLC, Driftwood Capital LLC, or any of their advisers, officers, directors, or affiliates represent that the information presented herein is accurate, current or complete, and such information is subject to change without notice.

Statements herein that reflect projections or expectations of future financial or economic performance of a Fund or an investment are forward-looking statements. Such “forward-looking” statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or a Fund’s or an investment’s actual performance. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be accurate. Any projections and forward-looking statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in each Fund’s confidential offering document. Actual results for any period may or may not approximate such forward-looking statements. Prospective investors are advised to consult with their own independent tax and business advisors concerning the validity and reasonableness of the factual, accounting and tax assumptions. No representations or warranties whatsoever are made by a Fund, Driftwood Advisors, LLC, Driftwood Capital LLC, or any other person or entity as to the future profitability of a Fund or the results of making an investment in the Fund. Projected or past performance is not a guarantee of future results.

 

Footnotes

  1. CBRE Office Marketview Q1 2020 Report
  2. Eastdil Secured
  3. Eastdil Secured
  4. Eastdil Secured