Experience, Integrity and Foresight

Investment Strategy - Hospitality Fund

Our target investments are Upscale and Upper-mid scale extended stay, limited and select service hotels in the contiguous 48 states.  We are seeking opportunities where: (i) cash flow can be increased through better property level operation or improving micro fundamentals; (ii) there exists opportunity to increase the assets' gross potential revenue through targeted, but limited, capital improvements; (iii) the assets are located in markets with strong, long-term demand fundamentals (the "Target Investment").  Our targeted deal size is between $5 million and $12 million.

The Target Investments will primarily be oriented to hotels located in secondary and tertiary markets, with strong franchise affiliations, newer in construction (target past 1995, with a preference to post 2000) and with a substantial majority (80% or more, with a preference to 90% or more) of revenue driven through room sales.

Our goal is to take advantage of the current yield opportunity in this asset class.  Our target going-in, unleveled cash-on-cash returns will be 8.0% - 9.0%, with a realistic view to achieving levered returns in excess of 10% in the first year. Overall returns, based upon a five year hold strategy, are assumed to exceed 20% post-promote.
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