Driftwood Capital has launched Driftwood Hotel Income I, DST, its inaugural Delaware Statutory Trust platform, offering eligible investors with access to a quality hotel for 1031 exchange investors. The offering is expected to target approximately $23.9 million in equity commitments and use approximately $17.75 million of debt, representing an expected loan-to-value ratio of approximately 43% LTV.
The offering is anchored by the Courtyard by Marriott Fort Lauderdale Weston, a 176-key hotel located in Weston, FL, just west of Fort Lauderdale.
Driftwood currently expects to evaluate additional DST opportunities to potentially expand its DST portfolio with compact full-service, premium-branded select-service and extended stay hotels in markets Driftwood believes demonstrate attractive corporate and leisure travel demand based on its underwriting.
“The hospitality sector has long offered compelling risk-adjusted opportunities for investors,” said Carlos Rodriguez Jr., president/CEO, Driftwood Capital. “With the launch of Driftwood Hotel Income I, DST, we are continuing our commitment to expanding opportunities for 1031 exchange investors, providing an additional investment option for eligible 1031 exchange investors seeking passive exposure to hospitality real estate. A natural extension of our overall platform, the offering is backed by a property that is well positioned within a supply-constrained submarket, an example of our decade-long approach supported by Driftwood’s hospitality underwriting and asset-management experience.”
DST interests are generally structured to be treated as like-kind replacement property for Section 1031 exchange purposes, subject to satisfaction of applicable requirements. DST interests may qualify as like-kind replacement property for certain 1031 exchange investors, which may permit eligible investors to defer recognition of certain capital gains, subject to applicable tax rules and individual circumstances. Investors should consult their own tax advisers.
The Courtyard by Marriott Fort Lauderdale Weston provides eligible investors with exposure to an operating hotel with historical property-level revenue with a diversified base of demand, offering access to a hospitality real estate investment through a DST structure. Situated in the Weston submarket of the Miami-Fort Lauderdale-West Palm Beach MSA, the property is located less than five minutes from Interstate 75, providing direct access to the greater Fort Lauderdale area and South Florida region while benefiting from nearby corporate and healthcare demand generators.
