Driftwood Capital has closed a $1.2 billion portfolio consolidation deal that includes a portfolio of 18 hotels with 4,203 rooms across 10 states.
The hotels involved in the Coral Gables, Florida-based firm's deal are all recently built or completely renovated and are affiliated with Hilton, Marriott or Margaritaville brands.
“This portfolio brings together some of the highest-quality assets we own and operate, creating a uniquely cohesive investment opportunity for our partners,” Carlos Rodriguez Sr., chairman and CEO of Driftwood Capital, said in a news release. “We’ve intentionally assembled this particular portfolio of assets to reflect strength in markets, performance and long-term fundamentals.”
The following hotels are included in the portfolio consolidation:
- Margaritaville Lake Resort Lake of the Ozarks, a 520-room hotel that opened in 1960 and was renovated in 2020.
- Marriott San Diego Mission Valley, a 353-key hotel that Driftwood acquired in 2019 in an $85.7 million deal.
- Hilton Dallas Southlake Town Square, a 250-room hotel just outside of Dallas.
- Canopy by Hilton West Palm Beach Downtown, 150-key lifestyle hotel that opened in Florida’s “Wall Street South” in 2020.
- Hotel Vesper, Houston, a 131-room boutique hotel that Driftwood acquired as a Hotel Indigo in 2021.
The hotels in rest of the acquired portfolio are located in similar high-growth markets, including North Carolina, Utah and New York.
“We see this portfolio as a blueprint for how we intend to invest and operate in the next cycle,” said Carlos Rodriguez Jr., president and COO of Driftwood Capital. “It reflects our focus on building high-quality, strategically located hotel portfolios — just like we did with our recent Space Coast Fund, which represented over $800 million in assets."
Last year, Driftwood closed its $330 million Space Coast Fund that included four Florida properties.
"These two transactions executed within months of each other represent over $2 billion in recapitalizations of assets made to improve the returns of our investors," Carlos Rodriguez Jr. said. "The long-term upside we see in these two collections is substantial."
Since its inception in 2015, Driftwood Capital has completed $5 billion in transactions. Earlier this year, Driftwood hired Alinio Azevedo to lead the company's new luxury and lifestyle division. Twelve hotels and resorts sit in that division now, and the company will begin raising an investment fund later this year toward that division.