INVESTMENT
hotels on a weekly basis , made the cuts necessary to keep everything going , and even played bank … And we came out fine – we came out great , and now we are ready to grow again .”
THE WAY FORWARD Current growth for Driftwood Capital includes the development of the US $ 300 million Westin Cocoa Beach in Florida , as well as the US $ 185 million Riverside Wharf / Dream Hotel in Downtown Miami , Florida . At the same time , Rodriguez says Driftwood is interested in acquiring or merging with another management company to better compete and create synergies ; it wants to invest heavily in hospitality-related technology companies ; and , for the first time , Driftwood is going to open its development platforms to institutional investors .
Driftwood has been very active on the acquisitions side , as well , having closed in mid-February on the 326-room Scottsdale Resort at McCormick Ranch in Arizona . It plans to complete a multimillion-dollar renovation that will convert the hotel to a Curio Collection by Hilton , and by the second quarter of 2022 open the opportunity to its accredited investors . In September 2021 , it acquired the 240-room Sheraton Old San Juan in Puerto Rico with plans to invest and convert it to a Tribute by Marriott . In October 2021 , Driftwood Capital acquired the new , 111-room boutique Wylie Hotel in Atlanta , which has also been turned over to investment syndication .
“ There ’ ll be a few more deals coming later in the year as CMBS loans mature and some owners may not be able to refinance ,” Rodriguez adds .
More generally on the acquisition front , from a pricing perspective , Rodriguez says , Driftwood is finding some discounts , but not as much as initially anticipated and certainly not for leisure assets where he says some investors are overpaying .
AT THE END OF THE DAY , IT ’ S ALL ABOUT TRUST AND LETTING EVERYONE KNOW WHERE YOU STAND AND WHAT IS HAPPENING .
Driftwood will continue to be opportunistic , according to Rodriguez , and consider city center , big box hotels if they are trading at a big discount that provides Driftwood with a healthy return based on the associated risk . “ We ’ ve taken down a couple of deals that way during the pandemic – actually before the vaccine came out ,” Rodriguez says . “ I don ’ t mind doing those deals as long as we ’ re compensated for the risk .”
Having said that , Driftwood more recently has been doing lifestyle hotel deals – again and always opportunistically . “ We ’ re seeing strength in the upperupscale and lifestyle deals ,” Rodriguez adds . “ But , again , that doesn ’ t preclude us if you bring me a portfolio of limitedservice hotels . I will still underwrite it and look at it , and if the numbers are right
– CARLOS RODRIGUEZ , SR .
[ the less sexy deals seem to require higher returns for investors ], we will do it .”
In the next breath , however , Rodriguez adds , while there is room to drive rate and good occupancy at more upscale and resort hotels to offset escalating costs , development on the limited-service side remains more challenging because the price elasticity is not as available in that segment .
LENDING AGAIN Driftwood is also seeing increased activity on the lending front . “ We ’ re very enthused with the volume of loans that we ’ ve been able to produce … A lot of hotels need to be refinanced and are looking for other lenders like us to help , especially as CMBS loans mature .”
In general , Rodriguez says he is starting
36 hotelsmag . com May 2022