Invest in Staybridge Suites — Wilmington, DE

Driftwood Development

unique conversion opportunity

We are pleased to invite you to co-invest with us in our latest Qualified Opportunity Fund to convert a class A office building in downtown Wilmington, DE to a 134-room Staybridge Suites hotel by IHG. The unique opportunity contemplates a 1-year conversion timeframe and the developer has already procured/secured all permits, plans, financing, and construction teams to commence work on March 15, 2020, allowing for ideal investment entry timing unique for opportunity zone investments

3x

Projected Equity Multiple

16.1%

Projected XIRR

13.7%

Anticipated Annual Returns

$50K

Minimum Investment

10 Years

Anticipated hold period

Deal Highlights

The project is located in an opportunity zone Wilmington’s downtown—making it Wilmington’s first opportunity zone deal
This investment provides entry into a major market at a low basis while offering a superior product that will prosper in a growing downtown market
Attractive City Property Tax reimbursements for first five years of operations. 25% reduction in property taxes currently, could be 100% through new legislation
The City is offering an additional incentive of $940,000 in Downtown Development Reimbursements
No new hotels are projected to enter the market

The hotel conversion is projected to open in one year, 1Q 2022

Strong extended-stay brand to capture a highly-demanded market segment

Tax Benefits

DEFER

Investors may defer paying taxes on any capital gains invested into a QOF until December 31, 2026

REDUCE

Investors may reduce the tax liability on deferred capital gains invested. The deferred gain is reduced by 10% if the investment in the fund is held for 5 years by December 31, 2026

Eliminate

Investors may eliminate capital gains tax (federal and most states) on QOF investments if the investment is held for 10 years

PROJECTED INVESTOR DISTRIBUTIONS SCHEDULE

 

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

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

 $24,024  $10,066  $7,700  $41,358  $7,185  $7,815  $8,607  $9,290  $9,795  $182,650 

 

Market Highlights

Strong corporate market demand

Year-round hotel corporate demand generated by a significant financial, legal, industrial, and government presence. About 65% of Fortune 500 companies are charted in Delaware. Among the financial and industrial corporations present in Delaware are J.P Morgan Chase, Bank of America, Capital One, Barclays Bank, DuPont, and Chemours.

City office demand has been growing with the fin-tech boom which has been accelerated through the pandemic.

City events drive annual leisure visitors

Annually over six million people travel to Wilmington with many of them coming for its annual city events. Some of the most popular events include MidAtlantic Wine + Food, Festival (March), WilmFilm Festival (April), Wilmington Grand Prix (May), Brandywine Festival of the Arts (September), Dover Downs Thoroughbred Horse Races (May through October).

Transportation HUB

Delaware benefits from an excellent transportation system that provides convenient access to, either by train or highway, to New York City, the country’s financial capital, and Washington D.C., the political capital of the nation. This proximity and convenience facilitates corporate travel to Wilmington. Showcasing the ease of travel, Wilmington Amtrak is the 9th busiest station in the country with approximately 90 trains daily. Additionally, I-95, the major north-south interstate connecting New York City to Washington D.C., skirts downtown Wilmington.

Healthcare Demand

ChristianaCare Medical Center is located less than a mile from the hotel and helps drive extended-stay visitors.

Revitalizing Downtown Investment

Modernizing downtown area due to various city incentives throughout the last few years.

Frequently Asked Questions

How were Opportunity Zones determined?

After the Tax law of 2017 was passed, state Governors were given 90 days to nominate areas that would qualify as Opportunity Zones based on data from U.S. Census tracts. To qualify for an Opportunity Zone designation, these areas had to meet certain criteria in poverty rates, income levels, and population density. The U.S. Treasury Department conducts the final certification of an opportunity zone nomination that has experienced uneven economic development and needs a boost in job creation and socio-economic improvement.

Where are the Opportunity Zones

Currently, there are over 8,700 designated and certified opportunity zones. They are found in all 50 states and other territories including Puerto Rico. Geographic locations include an almost even split across low, medium, and high-density zip codes. Approximately 31.3 million Americans currently live in opportunity zones.

Benefits of investing in a qualified Opportunity fund?

Investing in a qualified opportunity fund enables investors with substantial capital gains tax liabilities from any prior investment to defer and substantially reduce that liability. Crucially, any future capital gains from the opportunity zone investment could be eliminated – if the investment is held for 10 years. Additionally, these funds will serve to spur economic development in high-potential but underserved communities across the U.S. Doing well while doing well.

What are the tax breaks?

This investment vehicle gives investors two different incentives:

First, they can defer and reduce capital gains from any other source (e.g. sale of stocks, bonds, real estate, etc.) by investing those capital gains in an opportunity zone.

Second, if the investment is held for at least 10 years, they pay no capital gains on proceeds from the opportunity zone investment.

How does it work?

Invest: your capital gains in a qualified opportunity zone investment.

Defer: taxes on original capital gains until 12/31/2026.

Reduce: Investors may reduce the tax liability on deferred capital gains invested. The deferred gain is reduced by 10% if the investment in the fund is held for 5 years by December 31, 2026

Eliminate: Investors may eliminate capital gains tax (federal and most states) on QOF investments if the investment is held for 10 years

Why invest in the Driftwood Opportunity Zone fund?

Our track record of delivering market-beating returns to investors and unlocking value in our hotel assets is clear. At present, Driftwood operates or has active investments in over 70 hotel properties. We source our own opportunity zone investment projects with an extensive pipeline of shovel-ready opportunities.

Additionally, as a vertically integrated company, we offer a unique model which allows us to manage the asset and ensure the highest quality in operations and cash-flow optimization.

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.

Only for accredited investors

Unfortunately, investment deals are currently limited to accredited investors only

Please select an option below

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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 DDP Wilmington Qualified Opportunity Fund Investors, LLC, Driftwood Capital, LLC, or any of its affiliated companies, or the results of any future investments. A complete list of past investments made by Driftwood Capital 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 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 DDP Wilmington Qualified Opportunity Fund Investors, LLC (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.