Dive Brief:
- Driftwood Capital closed a $1.2 billion portfolio consolidation encompassing 18 Hilton, Marriott International and Margaritaville-branded hotels across 10 states, the company announced in a release obtained by Hotel Dive.
- The 4,203-key portfolio represents some of Driftwood’s “most strategically located and well-performing assets,” backed by $370 million worth of renovations or new construction in recent years, according to the company.
- The portfolio boasts strong market fundamentals, Driftwood detailed, positioning it for “durable performance” despite ongoing market volatility, per CEO Carlos Rodriguez Sr.
Dive Insight:
Driftwood intentionally assembled this portfolio because it reflects “strength in markets, performance and long-term fundamentals,” Rodriguez Sr. said in a statement. Comprising some of the firm’s “highest quality assets we own and operate,” he added, the portfolio will hedge against current market volatility.
The portfolio spans “high-growth markets” in California, Texas, Florida, North Carolina, Utah, New York and elsewhere, with properties including the 520-key Margaritaville Lake Resort at Missouri’s Lake of the Ozarks and the 150-key Canopy by Hilton West Palm Beach Downtown in Florida.
The transaction will drive significant and long-term upside for Miami-based Driftwood, according to President and COO Carlos Rodriguez Jr.
“We see this portfolio as a blueprint for how we intend to invest and operate in the next cycle,” Carlos Rodriguez Jr. said in a statement. “It reflects our focus on building high-quality, strategically located hotel portfolios — just like we did with our recent Space Coast Fund, which represented over $800 million in assets.”
In September, Driftwood closed its Florida “Space Coast” portfolio fund, which is expected to generate more than 20% internal rate of return for the company, Hotel Investment Today previously reported.
“These two transactions executed within months of each other represent over $2 billion in recapitalizations of assets made to improve the returns of our investors,” Carlos Rodriguez Jr. said in Tuesday's release.
Carlos Rodriguez Sr., meanwhile, said the portfolio creates a “uniquely cohesive investment opportunity for our partners.”
Industrywide, hotel investment is slated to ramp up this year, hospitality professionals previously told Hotel Dive.
