Invest in Tru/Home2 Suites by Hilton at Flagler Station — Ft. Lauderdale, FL.

Unique cash-flowing opportunity zone investment:

Our newly opened 19-story, 218-room dual-branded hotel (Tru by Hilton & Home2 Suites by Hilton) in downtown Ft. Lauderdale, FL is open to accredited investors and qualifies for the significant tax benefits available to investors through the opportunity zone program.

3.1x

Projected Equity Multiple

16%

Projected XIRR

12%

Anticipated Annual Returns

$50K

Minimum Investment

10 Years

Anticipated Term

Deal Highlights

The construction was commenced in 2018 by Driftwood Capital and its joint venture partner, Merrimac Ventures and the hotels were inaugurated in Q4 2020. The total project cost of $73.2MM represents a $336K per room investment that was fully funded by the developers and subsequently the initial QOF contribution of $18.1MM.

The QOF had a maximum target raise of $25.5MM in capital contributions and thus the GP is seeking to raise the remaining balance of approximately $7.4MM to off- set Developer financing and complete the long-term financing plan.

Cash-Flowing Hotel

The Tru by Hilton and the Home2 Suites by Hilton hotels opened for business in November 2020 and have quickly ramped up to 60% occupancy despite the pandemic. With a dynamic product in a vibrant location, this hotel is set to begin cash-flowing this year, making it a one-of-a-kind opportunity zone investment.

Strategic Location

The Project is located in the heart of downtown Fort Lauderdale within the Flagler Arts and Technology District and is adjacent to the new Brightline/Virgin train station. Ft. Lauderdale has experienced tremendous growth over the last decade, and the city’s economic vitality is expected to accelerate its growth trajectory.
The Ft. Lauderdale hotel market had a 9.8% increase in average daily rate from 2015 to 2018 and is expected to continue that growth throughout the upcoming years.

Hilton dual-branded

The investors will benefit from the diversification of two different hotel offerings. Tru by Hilton caters to shorter-term guests, Home2 Suites by Hilton’s all-suite accommodations provide an option for those seeking a longer stay. The property’s modern, forward-thinking design – from large communal spaces to innovative technology offerings – appeals to all generations of savvy business and leisure travelers.

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

Market Highlights

ARTS AND TECHNOLOGY DISTRICT

The Project is located in an incredible downtown location: the Flagler Arts & Technology Village, the hub for local creative businesses. It is also surrounded by a network of great restaurants, cafes, retail shops, apartments and galleries.

Tourist Destination

Long known as an international tourist destination, Fort Lauderdale is the heart of a robust, high-growth region (Miami-Fort Lauderdale-West Palm Beach). Over 741 international and domestic flights arrive and depart daily at the Fort Lauderdale/Hollywood International Airport (FLL), which offers nonstop service to more than 125 U.S. cities and flights to Canada, the Bahamas and other Caribbean destinations, Mexico, Latin America, and Europe. At 9.4% annual growth, FLL is the 4th fastest growing airport in the United States (Airports Council International).

TRANSPORTATION HUB

A few steps away is the All Aboard Train Station, the new high speed rail connecting South Florida to Orlando. This station will be the central point for all tourists and business travelers coming to/from Fort Lauderdale and Orlando. This transportation hub also connects to the WAVE Streetcar, which serves the core activity centers in the downtown area: Fort Lauderdale Airport and Port Everglades.

Convention Center Expansion

The Greater Fort Lauderdale/Broward County Convention Center, which is located 3 miles from the hotel, is currently undergoing a major expansion, which will expand the venue to 1.2M SF by adding over 525K SF of meeting space, including 350K SF of contiguous exhibition space, a 65K SF waterfront ballroom, enhanced water taxi access, and additions of new dining outlets and a waterfront plaza.

Cruise Port Reopening

Port Everglades, located 5 miles from the hotel, is ranked the third busiest cruise port worldwide and has more homeported cruise ships than any other port, serving nearly 4M passengers in 2019. Several cruise voyages are scheduled to depart from Port Everglades beginning in June with an acceleration in momentum during the latter half of the year.

Strong Development Pipeline

The real estate investment and development outlook for Fort Lauderdale remains strong across asset types, with 3 of the 5 largest multifamily transactions in South Florida located in Fort Lauderdale. Flagler Village has specifically attracted significant development, and the hotel’s unique amenities, including its pool deck and bar, are expected to become an entertainment hub for the growing community nearby.

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

M

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 Qualified Opportunity Fund I, LP, 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 Driftwood Qualified Opportunity Fund I, 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.