A Coral Gables hotel development and financing company is aggressively scaling up its acquisitions and construction strategy. Driftwood Capital, formerly Driftwood Acquisitions & Development, is targeting development and acquisition deals across the country in the $30 million to $150 million range, said company chairman and CEO Carlos J. Rodriguez, Sr. He said Driftwood Capital will also be issuing loans in the $3 million to $50 million range through its mezzanine lending division.
“The decision to scale up our existing acquisitions and development activities and launch a new lending business was driven by two main factors,” Rodriguez Sr. said. “First, we want to continue to meet the growing demand in the marketplace for alternative investments. Second, we want to ensure we have a long runway ahead of us for future capital deployments.”
He said the lending platform gives Driftwood Capital the ability to fulfill a growing niche for small-to-midsize loans in the hotel space. To finance its development and lending strategy, Driftwood Capital is setting up new GP funds through the company’s initial investors as well as longstanding LP investors, strategic capital partners, and other JV partners.
Since launching in 2015, Driftwood Capital placed more than $400 million in LP capital in both hotel acquisitions and developments across the United States, representing a portfolio of over $1 billion in assets. Some of the company’s hotel properties include the dual-branded Tru by Hilton/Home2 Suites by Hilton in Fort Lauderdale, the Marriott Mission Valley San Diego, the Sheraton Park City, and the Margaritaville Lake of the Ozarks.
Driftwood Capital is also building a $250 million, 502-key oceanfront Westin Resort in Cocoa Beach, it’s largest project to date. All the properties are managed by company affiliate Driftwood Hospitality.
Carlos Rodriguez Jr., Driftwood Capital’s president and chief operating officer, said the company’s real estate asset syndication model has proven very successful and popular with investors.
“With these new funds, we will invest in a broader range of hospitality opportunities with longer time horizons to syndicate LP capital, ensuring greater volume, diversity, and security for our investor network,” Rodriguez, Jr. said. “We are actively engaged in expanding our network of investors. We are also expanding our strategic partnerships with others in the market wherever we find synergies.”
He said Driftwood Capital would consider joint ventures with other experienced investment groups and developers across the country.