Private equity investment offering for Myrtle Beach Hampton Inn targeting 20.2% annualized return
The private equity real estate investment platform crowd street today releases its latest offering, the 121-key Hampton Inn in the heart of Myrtle Beach, SC.
The Hampton Inn Myrtle Beach-Northwood hotel is located in the northern part of Myrtle Beach in the Great Dunes area. The hotel is just three blocks from the beach and 20 minutes from Myrtle Beach International Airport.
The hotel is currently poorly managed and despite its excellent location and strong flag, it is underperforming compared to its competitors in the market. The sponsor’s value-added plan involves investing $4.4 million in property improvements and partnering with a seasoned hotel management company.
Investment Highlights: The property is being acquired by Suncroft, a recurring sponsor on the platform with a successful track record of positive returns from its hotel investments.
The Hampton Inn will be Suncroft’s second acquisition in Myrtle Beach and will undergo a similar improvement plan that has proven effective even during the COVID-19 pandemic.
- Minimum investment: $25,000
- Internal rate of return (IRR) target: 20.2%
- Multiple of target equity: 2.1x
- Target average annual monetary return: 20%
- Target investment period: 5 years
Benzinga’s opinion: Based on the sponsor’s conservative underwriting, the property is expected to see a 2.07x increase in net operating income (NOI) by the end of year five. However, the author is of the opinion that the asset could see even greater improvement, assuming a continued recovery across the hospitality industry as a whole.
Sponsor of the transaction: Suncroft is a multi-generational real estate investment firm focused on hotel assets. The company’s last offering on the CrowdStreet platform was for the Staybridge Suites Myrtle Beach in August 2019, which had a similar value-added business model.
The Staybridge Suites asset is currently performing better than expected, with an increase in RevPAR (revenue per available room) from $85.30 to $107.29 since acquisition and an increase in the average daily rate (ADR) of 106.49 $ to $142.39. The hotel’s EBITDA exceeded projections in 2021 by $419,000.
See more details about this and other offers on the CrowdStreet platform via Benzinga Alternative Investments.
Photo: Courtesy of CrowdStreet
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