Stanley Hotel

Driftwood Mezzanine Debt Portfolio

United States

A diversified portfolio of high-yield mezzanine loans secured by ownership of nine institutional-quality hospitality assets. 

Driftwood Mezzanine Debt Portfolio, L.P., has an approximately 10.3% annual yield, paid quarterly, and an expected remaining hold of ~2.5 years. This portfolio is a unique opportunity to obtain a 10+% return, distributed quarterly, with a relatively short time horizon. Investments into Driftwood Mezzanine Debt Portfolio will receive distributions in the quarter following investment.

10.5%

Annualized Yield

10.5%

Target IRR

2.5 yrs

Anticipated Term

62.2%

Avg. LTV

Investment Highlights

Several sponsors, brands and varied geography creates a robust portfolio

Predictable cash flow and returns with quarterly current pay

Roughly 2.5 years remaining on loan portfolio

Distributions to start the quarter after investment

What is Mezzanine Debt?

Mezzanine debt typically serves as a bridge between a project’s senior loan and the equity within a capital stack. The mezzanine debt position is subordinate to the senior loan and will bear losses ahead of the senior lender, but can fill a gap left by traditional lenders. It can enhance equity returns while being less restrictive relative to senior debt. It is more cost-effective for borrowers, so it is a very attractive way to participate in the capital markets.

Why Mezzanine Financing?

Specialized asset classes such as hospitality pose a challenge for traditional lenders, who may be sitting on the sidelines or capped at historically low proceeds levels due to uncertainty in the industry and the greater capital markets. This gap in the capital stack (20-30%) presents an opportunity for debt funds and non-traditional lenders to provide attractively priced, risk-adjusted loans that enable a borrower to reach a desired level of leverage while producing an attractive yield for the mezzanine lender.

Portfolio Allocation


Hotel Name

% of Total Porfolio

Total Dollars

LTV

Maturity Date

NoMa Hyatt Place

15.6%
$6,170,189
72.4%
Sep 2023

Shashi Hotel**

24.0%
$9,479,724
62.6%
Jun 2024

Charlotte Home2 Suites

8.4%
$3,324,782
64.9%
Jun 2024

Hyatt West Coast 4-Pack**

22.5%
$8,890,757
55.7%
Dec 2024

Stanley/Fall River**

29.4%
$11,609,548
60.8%
Jan 2025

100%
$39,475,000
62.2%*

Portfolio Assets

Stanley Hotel
hotel
Hyatt Centric Downtown Portland
Stanley Hotel
hotel
Shashi Hotel Mountain View, an Urban Resort
Stanley Hotel
hotel
Hyatt Place San Jose Airport
Stanley Hotel
hotel
Hyatt House San Jose Airport
Stanley Hotel
hotel
Hyatt Place Glendale / Los Angeles
Stanley Hotel
hotel
The Stanley Hotel
Stanley Hotel
hotel
Fall River Village
Stanley Hotel
hotel
Home2 Suites by Hilton Charlotte Uptown
Stanley Hotel
hotel
Hyatt Place Washington Dc/Us Capitol
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