Driftwood Capital secures $30M for Sheraton Dallas refi

Driftwood Capital has, through its lending fund Driftwood Lending Partners LP (DLP), provided $30 million in mezzanine financing for the refinancing of the Sheraton Dallas Hotel, a 1,841-key hotel and convention center serving as the largest hotel in Texas and which is sponsored by Chartres Lodging Group.

The mezzanine financing will accompany a $270-million senior loan originated by Goldman Sachs and JP Morgan Securities. The two-year, floating-rate loan includes three one-year extension options.

“As demand for full-service hotels and dynamic meeting spaces elevates, owner/operators continue to seek favorable loan terms to capitalize on this trend with longer holding periods,” said Carlos Rodriguez Sr., chairman/CEO, Driftwood Capital. “The addition of this mezzanine loan also speaks to the need for gap financing that allows firms to continue their investment strategies while allowing us to provide continuity to the hotel industry.”

Since the fund’s launch in late 2020, DLP has participated in more than $1.4 billion in financing for hotels and sponsors across the country. The fund focuses on providing mezzanine loans and preferred equity for existing hospitality assets, as well as ground-up hotel development projects in the U.S.

Built in 1959, the Sheraton Dallas Hotel features more than 230,000 sq. ft. of meeting and pre-function space, five restaurants and 113 meeting rooms.

Located in Dallas’ City Center District, the hotel is six miles from Dallas Love Field, with DFW International Airport about 20 miles from the property. Dallas Area Rapid Transit’s Pearl/Arts District Station is also near the property, providing access to the greater DFW metro area for guests.

Driftwood Capital’s investment strategies include hospitality acquisition, development and lending. Recently, the company said that its hotel development pipeline has exceeded $1 billion in projected value. Driftwood’s development portfolio includes $800 million projects either under construction or scheduled to break ground this year, including,

  • Element by Westin Melbourne, FL: A $54-million development nearing completion and expected to open in June.
  • Element by Westin Mission Valley San Diego: A $74-million development underway in March, with completion projected in 2026.
  • Westin Resort & Spa Cocoa Beach, FL: An approximately $410-million luxury resort development expected to break ground in Q3.
  • Riverside Wharf Miami: A $267-million mixed-use development located on downtown Miami’s riverfront featuring a Dream Hotel. Ground is expected to break in the latter half of the year.

Driftwood has also completed several notable renovations and revamps, including the Scottsdale Resort and Spa, Curio Collection by Hilton; Hotel Rumbao, a Tribute Portfolio Hotel, in San Juan; Hotel Vesper, a Tribute Portfolio Hotel, in Houston; and the Hilton Dallas/Southlake Town Square. An upcoming update is also planned for the Hilton Dallas/Plano Granite Park, which is projected to be completed this year.