Driftwood Capital is an innovative hospitality ecosystem that encompasses best-in-class investment and management capabilities, refined over three decades. We’ve created a hospitality ecosystem to help make smart investments secured by sponsor capital. As professionals well versed in acquisitions, development, and lending, we source, underwrite, structure, and close investments across diverse markets and asset types, from name brands to boutique properties. We then bring our extensive experience in hotel management to each investment, seeking to add value and improve operations to deliver superior risk-adjusted returns in hospitality.
Driftwood Development provides investment services, such as development and management services, and real estate development. Driftwood Development’s strong, in-house team is knowledgeable in all aspects of hospitality, including underwriting, site identification, land assembly, zoning and entitlements, financing, design, construction, and pre-opening management, as well as other general real estate development services, investment services, and management services.
Our deep network of joint venture partners includes brokers, lenders, brands and commercial real estate professionals who are seeking a hospitality counterpart. When choosing a development project, we consider such factors as barriers to entry, tax credits and other inducements, key money and other points of differentiation.
Additionally, we utilize unique capital formation strategies that take advantage of Federal programs such as Qualified Opportunity Zones and the EB-5 Investment Program, for which we have dedicated team members.
Yes, we believe in every deal we offer. Thus, we put our dollars before inviting accredited investors to join us. Additionally, we typically retain a minimum of 10% ownership in each deal and have a tiered incentive structure to help maximize alignment with investors.
Yes, generally the minimum investment is $25,000 USD although the amount could vary from deal to deal.
Any distributions are expected to be paid from operating cash flow at the project GP's discretion, generally 30 days after the quarter closes.
Driftwood Capital purchases cash-flowing hotels, land for development, or funds loans with its own capital before syndicating to accredited investors. In the case of acquisitions, Driftwood Capital generally engages its affiliated management company, Driftwood Hospitality Management, to help streamline operations and improve performance. The company typically maintains a minimum of 10% ownership in each deal. Based on historical performance, investors are expected to receive 7-10% annual returns and an XIRR in excess of 15%.
A fundamental pillar of Driftwood Capital’s value proposition and success is an experienced Investor Relations team that seeks to deliver timely, accurate and transparent information to all investors. We have a dedicated, in-house Investor Relations team that is available to address current or potential investors’ questions or concerns. Additionally, investors are expected to receive quarterly reports on individual hotels’ operating and financial performance issued 30 days after the quarter closes. Finally, Driftwood Capital’s Investor Portal — investors.driftwoodcapital.com — further differentiates us from commercial real estate peers and provides investors 24/7 access to their investment from anywhere in the world via secure technology. The portal also houses encrypted access to open investments and tax documents.
We typically provide all investors with a Schedule K-1 for their respective investment in any Driftwood-sponsored investment. Schedule K-1 is an Internal Revenue Service (IRS) tax form issued annually that reports each partner's share of a partnership's earnings, losses, deductions, and credits.
We provide all investors with a Schedule K-1 for their respective investment in any Driftwood-sponsored investment. Schedule K-1 is an Internal Revenue Service. The following documentation is required by Driftwood Capital for compliance purposes:
Investing as an individual with one subscriber
Investing as an individual with more than one subscriber
Investing via Entity (LP, LLC, C-Corp, or SD IRA)
Investing via Trust
In the United States, to be considered an accredited investor, individuals must have a net-worth of at least $1,000,000 excluding the value of their primary residence or have a household income of at least $200,000 each year for the last two years (or $300,000 combined income with your spouse or spousal equivalent) and have the expectation to make the same amount this year. The term “accredited investor” is further defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission.
Deals offered by Driftwood Capital or any of its affiliated funds are typically offered pursuant to SEC exemptions from public registration which require that we verify an investor’s accreditation.
In order to provide Accredited Investor status, you can provide financial statements from a bank/brokerage account showing net assets over $1 million dollars; 2 years of Federal tax Returns or a valid investor accreditation letter from a CPA or an attorney. An alternative would be to visit one of the third-party sites listed below and provide Driftwood Capital with an accreditation letter:
https://www.verifyinvestor.com/
https://www.earlyiq.com/investor-verification
* Driftwood does not accept self-certification of investor accreditation.
An Accredited Investor Verification Letter is a legal document provided by a qualified accountant, investment advisor, or lawyer who can certify your accreditation. The verification letter is valid for up to 3 months from the date it is executed.
The U.S. Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. It works by linking U.S. businesses looking to raise capital with foreign investors seeking a U.S. visa, creating a system that benefits all parties.
Through a qualifying EB-5 investment, the investor, his/her spouse, and any unmarried children under the age of 21 will be eligible for permanent residence in the U.S. The traditional model used in the industry consists of an investment in a company, which makes a loan to the project for a term of 5 years with annualized interest payments of 2% for the investor. Additionally, Driftwood Capital offers a second investment option qualified to obtain residency as a project partner that is expected to produce projected greater, more equity-like returns.
You can find all the information related to the EB-5 Visa Program in the United States Citizenship and Immigration Services official website. Visit site →
The minimum required investment amount for Targeted Employment Areas (TEAs) is $800,000 and it must lead to the creation of 10 full-time jobs for a minimum of two years.
There are two kinds of TEAs recognized by the USCIS: rural areas and high unemployment areas.
A rural area is any area other than an area within a metropolitan statistical area (MSA) (as designated by the Office of Management and Budget) or within the outer boundary of any city or town having a population of 20,000 or more according to the most recent decennial census of the United States.
An EB-5 project may receive a TEA designation if the principal location of the project is located in a county or metropolitan location with at least 20,000 residents and experiences at least an unemployment rate of at least 150% of the U.S. national average.
The EB-5 program requires that each investor creates a minimum of 10 full-time jobs for at least 2 years. These jobs can be directly or indirectly created. Direct jobs are formed in the business in which the EB-5 investor invested his/her capital. Indirect jobs are typically created within businesses that supply services or goods to the EB-5 project in question (E.g. construction workers).
The investor, his/her spouse and any unmarried children under the age of 21.
The process, from the moment the investor makes the at-risk capital investment to the moment it is returned to him/her, takes approximately 5 years.
Driftwood Capital offers two models of investment for EB-5 investors. The Loan Model is the traditional model used in the industry. It is an investment in a company that makes a loan to the project for a term of 5 years and an annual interest typically in the range of 1% to 2% for the investor. Additionally, we offer a second investment model, the Equity Model, that is expected to produce greater, more equity-like returns typically in the range of 5% to 8% IRR per year.
In order to begin the EB-5 immigration process, you must submit evidence that you have invested in or actively in the process of investing in a "for profit" new commercial enterprise that was established as set forth pursuant to EB-5 regulations.
Five projects executed successfully; 150 visas approved (100% approval rate); 2,127 jobs created.
Opportunity Zones were born in a provision of the bipartisan Tax Cuts and Jobs Act on December 22, 2017, which was championed by both Republicans and Democrats in the U.S. Congress. The concept was first introduced in a 2015 white paper, "Unlocking Private Capital to Facilitate Economic Growth in Distressed areas", by the Economic Innovation Group - a public policy consultancy. The objective is to promote and encourage long-term, capital investment in areas that have experienced uneven economic development and need a boost in job creation and socioeconomic improvement.
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 have experienced uneven economic development and need a boost in job creation and socioeconomic improvement.
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.
Investing in a qualified Opportunity Zone fund enables investors with capital gains tax liabilities from previously realized investments to defer owing capital gains taxes on such capital gains until as late as year-end 2026. In addition, any future capital gains generated by the Opportunity Zone investment could be tax-free if the investment in the qualified Opportunity Zone fund is held for at least 10 years. Additionally, these funds will serve to spur economic development in high-potential but underserved communities across the U.S.
At present, Driftwood operates or has active investments in nearly 90 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 believe we offer a unique model that allows us to manage the asset and help ensure the highest quality in operations and cash-flow optimization.
