Driftwood Florida Space Coast Portfolio
Four-Asset Portfolio on
Florida’s Space Coast
12% Target*
Preferred Equity IRR1
24% Target*
Common Equity IRR
6-Year
Anticipated Hold Period2
$250,000
Minimum Investment
1. Anticipated to be paid current each quarter in arrears.
2. The anticipated hold period is subject to extension by the General Partner as further described in the Private Placement Memorandum.
The investment returns in this offering are projections and not guaranteed. They may change without notice and are subject to various factors. Investing in securities carries risks, including potential loss of principal. The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
A blend of established, newly-renovated, and soon-to-break-ground hotel investments anticipated to provide “day-one” cash flow and the expectation of an attractive IRR over the duration of the investment.
Following the completion of the Westin Cocoa Beach development, the Driftwood Space Coast Portfolio is expected to represent approximately 62% of the Space Coast’s beachfront hotel guest room inventory.
As designed, the Portfolio is expected to feature 1,218 guest rooms, 166,000 square feet of meeting space, and 21 food & beverage outlets.
The portfolio anticipates generating cash flow from two operational full-service hotels (Hilton Cocoa Beach and Crowne Plaza Melbourne) and a newly-constructed upscale extended-stay hotel (element by Westin Melbourne), which opened in June 2024.
Lastly, scheduled to open in early 2027, the Westin Cocoa Beach Resort & Spa is expected to perform well in a currently unserved market segment, the goal being to establish the hotel as a regional landmark destination hotel.
The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
On-demand webinar
Flexible and attractive investment structure
Combining preferred equity for current cash flow and common equity for future upside, this investment offers investors the opportunity to customize their allocation between preferred and common investment options to suit their particular preferences.
Investment Choice:
Accredited investors have the discretion to allocate their investment between common equity and preferred equity.
Funding Options:
A 30% capital call upon initial closing, with the remainder to be called at the General Partner's discretion over 18 months. Alternatively, you may elect to fund your entire capital commitment at closing.
Initial Funding:
Commitments for new equity of at least ~$170M are required for the initial closing. To date, approximately 80% of the minimum equity needed for the initial closing has been committed.
Total Equity:
The portfolio’s total equity is expected to be ~$330M.
1. Represents hard and soft commitments as of August 20, 2024.
2. Total fund equity capitalization.
The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
Target Returns*
Preferred Equity
12% Target
IRR
1.6x Target
Equity Multiple
Common Equity
24% Target
IRR
2.5x Target
Equity Multiple
Anticipated to be paid current each quarter in arrears. The investment returns in this offering are projections and not guaranteed. They may change without notice and are subject to various factors. Investing in securities carries risks, including potential loss of principal. Please refer to the Private Placement Memorandum, including its disclosures, disclaimers and descriptions of risk factors, for important additional information. The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
Click here to see important disclaimers and disclosuresPortfolio Assets
502
Keys
15.7
Beachfront Acres
~14K SF
Meeting Space
11
F&B Venues
Westin Cocoa Beach Resort and Spa
- Expected to be a transformative development, positioned in one of the top five fastest growing MSAs in the US
- State-of-the-art resort and conference facility designed by world-renowned architect, Gensler
- Marriott distribution gap – no full-service Marriott beachfront properties for 160-miles, from Daytona Beach to Hutchinson Island
- Unprecedented $30M grant from Brevard County, $1M per year for 30 years, to promote the Resort
- $25M Marriott Performance Guaranty
- Updated construction costs of market-tested GMP (Gross Maximum Price) in September 2023
296
Keys
8.0
Beachfront Acres
21.7K SF
Meeting Space
6
F&B Venues
Hilton Cocoa Beach
- 300 linear feet of beach frontage
- $10M ($34K/ key) spent on a transformational renovation that positions the Hilton as the current market leader
- 141% RevPAR Index projected in 2024
- Six food & beverage outlets
- Well utilized, versatile function and event space
290
Keys
9.9
Beachfront Acres
20.0K SF
Meeting Space
3
F&B Venues
Crowne Plaza Melbourne
- Largest beachfront group house in Melbourne
- $18.5M ($64K/key) renovation of guest rooms and public spaces 2018-2019
- Outside deck replacement in 2023
- Operational synergies expected with the adjacent element by Westin Melbourne opening in 2024
130
Keys
2.6
Beachfront Acres
525 SF
Meeting Space
1
F&B Venues
element Melbourne
- Newest hotel product on Melbourne Beach by more than a decade and the first beachfront element by Westin
- Premium amenities that exceed brand standards with an elevated pool deck overlooking the Atlantic Ocean
- Lack of extended stay and Marriott product in the vicinity is expected to capture outsized market share
- Only Marriott-branded beachfront extended stay hotel in 170-miles of oceanfront, from Daytona Beach to Juno Beach
- Opportunity for operational cost savings and synergies with adjacent Crowne Plaza Melbourne
The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
Exciting market with strong demand drivers
Fueled by diverse demand drivers, from aerospace and beach tourism to major tourist attractions, this historically high-growth area is expected to continue to benefit from significant economic activity. Key attractions like Port Canaveral, Kennedy Space Center, and Orlando’s theme parks are expected to provide consistent demand.
- Cocoa Beach is among the closest beaches to Orlando amusement parks and MSA which attracted more than 74M visitors in 20231
- The aerospace sector contributed $4.2B to Brevard County’s economy in 20212
- NASA Kennedy Space Center Visitor Complex receives ~1.5M visitors yearly3
- Cocoa Beach was named the US Top Surfing Destination4
- Cocoa Beach serves over 2.5M visitors annually5
- Port Canaveral, the #1 Busiest Cruise Port in the World, welcomed ~6.8M passengers in 20236
- U.S. Patrick Space Force Base supports ~14K personnel with a $29.4B FY 2025 Space Force budget7
- Space Coast hotel RevPAR has grown 6% on average YoY8
1. Visit Orlando, “Visitor Volume to Orlando 2023 report”; 2. Kennedy Space Center Economic Impact Study FY 2021; 3. NASA. “Kennedy Space Center Visitor Complex Fact Sheet; 4. Travel + Leisure. “Cocoa Beach Rated Best Surf Spot in the U.S.” 2022; 5. Business View Magazine. “City of Cocoa Beach, Florida – Brevard County.” 2023; 6. Port Canaveral. “2023 State of the Port Report”; 7. U.S. Air Force Financial Management and Comptroller. “FY 2025 Budget Overview”; 8. CoStar “Space Coast market historical RevPar report”, Oct, 2024.
Experts discussing the strength of market & barriers to entry
Watch VideosThe description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
Investment Rationale
Impressive scale in an attractive location
Spanning over 36 beachfront acres within Florida’s thriving Space Coast, the portfolio epitomizes high-value hospitality real estate. With a planned 1,218 keys, 166k SF meeting space, 21 food & beverage venues, and a significant market share (11.1% of total market keys), four complementary hotels are set to transform the high barriers-to-entry Space Coast region.
Upon completion of the Westin Cocoa Beach development, the Portfolio expects to control ~52% of the hotel beachfront inventory in Brevard County (1), which encompasses both Melbourne and Cocoa Beach. We expect this majority market share to position the Portfolio as the market leader in the region, allowing to effectively maneuver market dynamics and enhance profitability across its properties.
1. CoStar, “Melbourne market total beachfront hotels key count”, November 11, 2024. Melbourne Market includes, Space Coast, Brevard County, Cape Canaveral, Satellite Beach, Melbourne Beach, and more.
High barriers to entry
Stringent zoning, entitlements, community buy-in, and the Brevard Barrier Island Area Protection Act are expected to limit competition and protect investment value. In fact, the element Melbourne took just over 2.5 years to get entitled, and Westin Cocoa Beach Resort and Spa took 5+ years to get shovel-ready, which required obtaining a special development district designation to get the desired height through a community referendum for approval.
Decade long presence on the Space Coast
Headquartered in Florida, Driftwood possesses extensive experience and history within the Space Coast, having been invested in the region since 2013, including major renovations of the Hilton Cocoa Beach and Crowne Plaza Melbourne, as well as the recent opening of the new element by Westin Melbourne and the completion of a five-year entitlement and design process of the new Westin Cocoa Beach Resort & Spa.
Potential operational synergies
With two sets of adjacent properties, operational cost savings and pricing power are expected to yield a competitive advantage.
Recently renovated
The Crowne Plaza Melbourne completed a $18.5M ($64K per key) renovation of guest rooms and public spaces in 2018-2019 and $10M ($34K per key) was spent on a renovation of the Hilton Cocoa Beach in 2023, which helped position the hotel as the current competitive set leader.
Compelling incentives for Westin Cocoa Beach Resort & Spa development
The portfolio benefits from a $30M grant from Brevard County to the Westin Resort & Spa and an anticipated $25M performance guarantee from Marriott to the Westin’s construction lender. With the scarcity of convention hotels along Florida’s coast, and notably, the absence of any full service Marriott beachfront properties from Daytona Beach to Hutchinson Island—a span of around 160 miles— the Resort is projected to be in an exceptional position to leverage Marriott’s reservation network of more than 141M affiliated members worldwide(1).
1. Marriott.com
Seeking to leverage major reservation and loyalty systems
The portfolio is expected to benefit from distribution to the three largest reservation systems and loyalty programs in the world (Marriott, Hilton, and IHG)
Diversified market leadership
Each hotel within the portfolio caters to a distinct market segment. The Westin Cocoa Beach will target the luxury market and is expected to be the only 4.5-star hotel on the beach. The Hilton Cocoa Beach, which completed a $10M renovation in January 2024, appeals to the upper-tier market and has consistently been the leader in the Space Coast. The Crowne Plaza Melbourne, which underwent a $18M renovation in 2019, serves the mid-tier market and is believed to be well-positioned despite its competitive environment. Lastly, upon opening, the element by Westin Melbourne became the market’s newest hotel construction and is currently the only extended-stay hotel on the beach.
The description of the project listed herein is summary in nature and does not include all of the relevant and potential high degree of risks. Any person considering an investment must read and review in its entirety the private placement memorandum describing the terms and risks of investment in detail prior to making an investment. Additionally, any person considering an investment should be aware of all the risks and should consult their own investment, legal, business, tax and financial advisors with respect thereto.
Experts Discussing the Strength of Market & Barriers to Entry
Lisa Sexton
Senior Vice President, Development Hospitality Expertise for Marriott International
Watch VideoRita Pritchett
Brevard County Commissioner for District 1 & Chairwoman for the Tourism Board of the County
Watch VideoLegal 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 Capital, LLC 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 Driftwood Capital 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 Driftwood Capital nor any of its affiliates, representatives, or executives represents that the information contained in this website is accurate, current, or complete. Driftwood Capital 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 Driftwood Capital 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.
* Target Returns
The target returns shown in this document are hypothetical in nature, do not reflect actual results, and are not a guarantee of future results. Target returns are based on assumptions that may not prove to be accurate. There are several limitations inherent in target returns like those portrayed in this document. Additionally, a specific investor’s actual performance may differ materially from such illustrative data depending on numerous factors. No representations or warranties whatsoever are made by Driftwood Capital, its affiliates, subsidiaries, or any other person or entity regarding the future profitability of an investment vehicle or the results of making an investment. Projected or past performance is not a guarantee of future results. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements and may be worse due to various factors, including, without limitation, changes in laws, fluctuations in real estate markets, the tourism and hospitality industries, increases in costs, and adverse conditions in the credit and capital markets. Moreover, actual events are difficult to project and often depend on factors beyond the control of Driftwood Capital, its subsidiaries, and affiliates.