Driftwood Florida Space Coast Portfolio
Four-Asset Portfolio on
Florida’s Space Coast
12.0%
Target Preferred Equity IRR1
30.3%
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.
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, 166K 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 2026, 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.
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.
Projected Returns
Preferred Equity
12.0%
Target IRR
1.6x
Target Equity Multiple
Common Equity
30.3%
Target IRR
2.5x
Target Equity Multiple
Target preferred equity anticipated to be paid current. 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.
Portfolio Assets
502
Keys
15.7
Beachfront Acres
123.7K 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
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.
- Closest beach to Orlando amusement parks and MSA which attracts approximately 60M annual visitors1
- $4.2B contributed to the county’s economy in 2021 by the space industry2
- Kennedy Space Center Visitor Complex received 1.5M visitors in 20222
- Cocoa Beach was named the US Top Surfing Destination3
- 2.5M visitors to Cocoa Beach in 20224
- Port Canaveral, the #1 Busiest Cruise Port in the World5, welcomes ~7M passengers annually5
- US Patrick Space Force/Air force Base & defense Contractors; 14K active personnel & $29B budget6
- Space Coast hotel RevPAR has grown 6% on average YoY7
1.Forbes; 2. Kennedy Space Center Economic Impact Study FY 2021; 3. Travel and Leisure; 4. Florida Daily; 5. Business Insider; 6.US Space Force; 7. CoStar
Experts discussing the strength of market & barriers to entry
Watch VideosInvestment 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 62% of the hotel beachfront inventory in Brevard County, 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.
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.
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
Leveraging 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.
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.