Riverside Wharf Miami

A transformative, “Vegas-like” hospitality & entertainment shovel-ready development in the heart of Downtown Miami. Anticipated to consist of a 167-key luxury Dream Hotel, four high-end restaurants, ~18K SF of meeting and event space, and about 40K SF of premier entertainment venues, including a nightclub and a rooftop day club. The project is expected to capture robust local and transient demand being one of a few projects open 24-hours across multiple synergistic uses. This attractive investment opportunity benefits from what Driftwood Capital (“Driftwood”) and MV Real Estate Holdings (“MV”, collectively the “Sponsors”) believe to be a high-barrier to entry market with a low-cost land basis, providing strong cashflows upon opening, an efficient source of capital through the use of the EB-5 program, and tax benefits from the areas Opportunity Zone designation.

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Target Net Equity Multiple¹

3.5x

Target Net IRR¹

19%

Minimum Investment

$100,000

Assumed Hold Period¹

10+ Years (June 2023 - June 2033)

Deal Overview

Driftwood believes this opportunity presents a one-of-a-kind entry point via new development into a top-25 US market with limited entitlement and financing risks.

Projected strong immediate cashflow

~49% of NOI in year 1 is expected to be generated by the leases and profit-sharing of the entertainment venues, supporting the hotel ramp to stabilization.

Ancillary income generation
Social Membership as a recurring high-margin income.
Valet Parking
Riverfront deepwater marina with boat-valet and short-term dockage.

Shovel-ready development

Scheduled for groundbreaking in Q2 2024.
13-year effort to obtain the required land assemblage, zoning adjustments, and entitlements for the Project, which Sponsors believe significantly reduces the entitlement risk and demonstrates the commitment of the Sponsors.
Secured a $125M loan term sheet from a national bank and currently undergoing due diligence by lender.

Low-cost land basis & off-site parking

~60% discounted land basis versus current market trades (based on STR November 2023 report)
Low-cost ground lease with The City of Miami for 80 years with two 10-year extensions.
Projected $9.5M construction cost savings through off-site parking, which is still expected to generate valet parking income for the Project.

Opportunity zone (“OZ”) benefits

The Opportunity Zone program, created by the Tax Cuts and Jobs Act of 2017, provides tax incentives for long-term investments in communities designated as Opportunity Zones. Investors may defer paying capital gains taxes on realized capital gains by investing such gains in Qualified Opportunity Funds (QOF).

Potential tax benefits:

Tax deferral
Investors can defer until December 31, 2026, capital gains taxes on previously realized capital gains if such gains are timely contributed to a QOF.

Tax exemption
If the investment in the QOF is held for at least 10 years, the investor may recognize $0 of capital gains on the investment in the QOF.

Unique F&B "special use zoning"

• The Project is expected to operate 24/7, combining entertainment venues and F&B operations with special permits for liquor sales until 5 AM and early openings at the Hotel’s bistro.
• Sponsor believes that the Special Use Zoning distinguishes the Project from other Miami nightlife districts.

Project guarantees

Personal completion guarantee to prospective construction lender agreed to by Driftwood’s Chairman & CEO.

Property Overview

Address:
114 SW North River Drive, Miami, FL 33130
Year Built:
In development
Keys:
167
Brand:
Dream
Flag:
Hyatt
F&B:
Asian Concept; Coastal Italian; Lobby lounge, French bistro, Nightclub; Day club, The Wharf
Amenities:
Rooftop pool and bar, high-end fitness facility, deep-water dock
Interest:
Fee simple
Labor:
Non union
Meeting Space:
18,000 SF

Program

Hotel
Restaurants
Entertainment
Conference

Item 1
Dream Hotel

Dream by Hyatt (upper-upscale lifestyle brand)
167-Keys

Amenities:

Rooftop Pool and Bar

Fitness Facility

Lobby Lounge & Bar
Item 1
Unique high-end restaurant experiences
High-end: Asian Concept

10,500 SF of front of house

196-personseating capacity

Two-story restaurant with a “Samurai Garden”

Balcony terrace and private dining room

High-end: Coastal Italian Concept

7,800 SF of front of house

180-personseating capacity

Dessert room and private dining flex space

Outdoor terrace overlooking Miami River

Three-meal: French Bistro Concept

2,025 SF of “front of house” space

80-personseating capacity

Marra Forina brick pizza oven
Item 1
Signature Entertainment Venues
Nightclub

~30,000 SF multilevel venue

Top-tier service and cutting-edge sound & entertainment systems

Performances by a curated list of renowned DJs

Day Club

~20,000 SF with 8 plunge pools

13 luxurious private cabanas with private bathrooms

State-of-the-art sound & lighting system

Live DJ booth for dynamic entertainment

Wharf Food & Beverage Venue

Nautical-themed F&B venue

~33,000 SF along the riverfront

Two outdoor bars

Elevated VIP section with a live DJ booth
Item 1
State-of-the-art meeting & event space

~18,000 SF including 3K of balcony

Full-service kitchen

Outdoor pre-function terrace overlooking

Miami River

Investment Rationale

Land basis

Driftwood views the Project’s mix of Fee Simple ownership and City Land Lease as advantageous, leading to a lower land cost. This results in a land basis lower than the area’s recent average sales of $28M per acre, with the Project’s basis around $9M per acre.

Entertainment experience and proof of concept

The Sponsor has demonstrated the success of The Wharf concept on the current site since its 2017 inception, consistently earning over $20M annually without permanent structures. The Sponsor anticipates the fully developed new Wharf will yield comparable or higher revenue. More details on The Wharf are available here.

Favorable ground lease

The Project was recently awarded an 80-year ground lease with two 10-year extensions from the City of Miami, which is expected to offer long-term stability and security.

Fully entitled project in a high barrier to entry market

The Project, after 13 years of land assemblage, zoning, and securing entitlements, is now shovel-ready, which Sponsor believes mitigates entitlement risks for investors. Additionally, Driftwood believes the difficulty of finding a comparable site along the Miami River in terms of density and zoning creates substantial barriers to entry, significantly reducing the likelihood of future competition.

Potential leases & venue profit share

Key development elements like The Wharf, Nightclub, and Day Club are expected to be structured in ways similar to triple net leases (NNN), which is expected to provide stable and predictable cash flows. The Sponsors believe the profit-sharing arrangements for these venues should also enhance returns. Investors are expected to benefit from the combination of the potential high returns of the operations and the stability of the lease income, subject to future market conditions and performance.

Operational competitive advantage

The Project’s Special Use Zoning permits extended operating hours until 5 AM, a distinctive feature that sets it apart from other Miami nightlife areas. This extended operation time is expected to boost food and beverage sales, potentially leading to stronger returns. Driftwood believes the combination of limited competition in the area and the Miami Beach moratorium further enhances this unique advantage.

Irreplaceable riverfront location

Strategically located on the Miami River in Downtown Miami and linked to the Riverwalk, the Sponsors believe the Project boasts an ideal setting. Upon completion, it is expected to be the sole hotel in its competitive set situated directly on the Miami River. The Sponsors believe this unique positioning provides a competitive edge by potentially increasing the hotel’s demand, offering enhanced accessibility, scenic views, and superior amenities.

Fully entitled

The Project has undergone 13 years of assemblage, zoning, and entitlements, making it shovel-ready from an entitlement perspective and, Sponsors believe, significantly reducing entitlement-related risks for investors.

Discover the waterfront hospitality-centric complex, Riverside Wharf project

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Third-party information not prepared by Driftwood. Neither Driftwood Capital nor any of its affiliates makes any representation or warranty as to the content thereof.

Frequently Asked Questions

Who is Driftwood Capital?

Driftwood Capital is an innovative investment business that we believe is built on the solid foundation of a most trusted name in hospitality. 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.

How does Driftwood Capital differentiate itself from other hotel owners, operators, and developers?

Aligned Interests: We are invested in each deal alongside our investors.
Institutional Quality: We provide accredited investors access to investment opportunities traditionally reserved for institutional investors.
Above-Market Returns: Investors typically receive any quarterly distributions from day one, with annual returns historically between 7% and 10% and 15%+ XIRR.
Personalized Portfolio: Investors create their own investment portfolio by selecting the deals that appeal to them.

Is there an investment minimum?

Yes, generally, the minimum investment is $50,000 USD, although the amount could vary from deal to deal.

How often are distributions paid?

Any distributions are expected to be paid from operating cash flow at the project GP’s discretion, generally 30 days after the quarter closes.

How does Driftwood Capital’s business model work?

Driftwood Capital purchases cash-flowing hotels, land for development, or funds loans 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 an ownership stake in each deal. Based on historical performance, investors are expected to receive 7-10% annual returns and an XIRR above 15%.

How does Driftwood Capital update investors about their investments?

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. Our dedicated, in-house Investor Relations team 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 anywhere in the world via secure technology. The portal also houses encrypted access to open investments and tax documents.

What tax documents does Driftwood Capital provide?

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.

What documents are required to invest with Driftwood Capital?

Driftwood Capital requires the following documentation for compliance purposes:

Investing as an individual with one subscriber

Valid, unexpired government-issued ID
IRS Form W-9
Valid investor accreditation letter
Completed and executed the Subscription Agreement

Investing as an individual with more than one subscriber

Valid, unexpired government-issued ID
IRS Form W-9
Valid investor accreditation letter
Completed and executed subscription agreement by both investors
Given more than one subscriber, the investors MUST SELECT one of the following within the Subscription Agreement:
Tenants in common
Joint tenants with rights of survivorship
Tenants by the entireties

Investing via Entity (LP, LLC, C-Corp, or SD IRA)

Valid, unexpired government-issued ID
IRS Form W-9
Valid investor accreditation letter
Entity’s Articles of Incorporation and Operating Agreement (not necessary if investing via SD IRA)
Completed and executed the Subscription Agreement

Investing via Trust

Valid, unexpired government-issued ID
IRS Form W-9
Valid investor accreditation letter
Trust agreement
Completed and executed the Subscription Agreement

What is an accredited investor?

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.

Why do I need to prove I’m an accredited investor?

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.

How do I prove I am accredited?

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.

What is an investor accreditation verification letter?

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.

Why invest in hotels instead of other asset class?

Hotels are the most desirable asset class in this cycle

Inflation Impact

Historically, hotel NOI growth has outpaced inflation by a substantial margin. Source: FRED, CBRE Trends in the Hotel Industry
Hotel NOI recorded a CAGR of 5.5% in the ~50 years from 1970 to 2019, with inflation recording a 3.9% CAGR. This 155bp annual premium – a 41% differential – strongly illuminates the merits of investing in lodging as an inflation hedge over the past five decades. (Source: FRED, CBRE Trends in the Hotel Industry)
The current economic cycle is beginning to show similarities with previous inflationary cycles. If lodging performance follows the pattern set in past periods, hotel investors can expect outsized returns as compared to an average annual inflation rate of 3.96%. (Source: FRED, CBRE Trends in the Hotel Industry)

Tax Impact

Investing in hotels provides numerous tax benefits as well, including depreciation, tax-deferred cash-out refinancing and qualified business income deductions (“QBI”). This applies to all real estate investments but hotels as an asset class have historically had more favorable QBI and typically benefit from accelerated depreciation, all of which can serve to defer recognition of taxable income. (Source: IRS)

Driftwood Capital is an innovative investment business that we believe is built on the solid foundation of a most trusted name in hospitality.

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.

Learn More

Legal disclosure

This website is not an offer to sell or the solicitation of an offer to purchase securities. All information available in this website is general in nature, not directed to any particular person, and is for informational purposes only. This website excludes material information, including, but not limited to, risk factors to be considered by prospective investors. The information contained herein reflects the opinions and projections of Driftwood Development Partners, LP (“DDP”) as of the date of this website, which are subject to change without notice at any time. There is no obligation to update, modify, or amend the information herein or otherwise notify a recipient of these materials in the event that any information contained herein, or any opinion, projection, forecast, or estimate, changes or subsequently becomes inaccurate. The information provided herein is believed to be reliable and has been obtained from sources DDP believes are reliable, but no representation or warranty is made, express or implied, with respect to the fairness, correctness, accuracy, reasonableness, or completeness of the information and opinions. Neither DDP nor any of its affiliates, representatives, or executives represents that the information contained in this website is accurate, current, or complete. DDP does not represent that any opinion or projection will be realized. For the avoidance of doubt, no investment advice is being provided through this website by DDP or any of its affiliates (including Driftwood Advisors, LLC), representatives, or executives. Each recipient of this website should make such investigation as it deems necessary to arrive at an independent evaluation of the contents hereof and should consult its own legal, financial, and accounting advisors to determine the merits and risks of such an investment.

¹In reviewing these projections and projections set forth elsewhere herein, prospective investors are cautioned that no assurance can be given that actual returns will meet or exceed the targeted returns (including that they may be materially lower than the targeted returns) or that actual results will otherwise meet DDP’s expectations or objectives. In addition, notwithstanding the targeted hold period, DDP is not required to sell the Hotel or any portion thereof at any time and the decision of whether and when to sell the Hotel or any portion thereof will be made by DDP, in its sole discretion, based on market conditions, the performance of the Hotel and other factors which it may consider. Accordingly, the Hotel may be sold, in whole or in part, sooner than expected, or the Hotel or any portion thereof may be held for longer than the target hold period. Please refer to the offering materials relating to an investment in the Hotel, including the “Legal Disclosures” set forth therein, for additional material information.