Real Estate
Asset Class
3 Years / 21% IRR (est)
Duration / IRR (est)
September 2023
Investment Date
Real Estate
Asset Class
3 Years / 21% IRR (est)
Duration / IRR (est)
September 2023
Investment Date
Real Estate
Asset Class
3 Years / 21% IRR (est)
Duration / IRR (est)
September 2023
Investment Date
We recently invested in dual-branded hotel in the Philadelphia area.
The hotel has 329 rooms, strong occupancy rates, and rising nightly rates. Yet the acquisition price is well below comps in the area where the cost per key is roughly 20-30% higher than our target property.
We — The Partners Fund — are preferred equity owners. We’ll receive at least 8% annual distributions through the end of 2025.
Meanwhile, the base case for this investment is conservative. If the hotels reach just 85% of 2019 net operating income (NOI) by the end of 2025, the exit gets us to an estimated 28.7% internal rate of return (IRR).
The LTV provide ample cushion and the assumable loan is at favorable, below market terms. And there are also considerable tax advantages based on how this deal is structured.
There’s still risk, of course. But the margin of safety looks favorable here.
We recently invested in dual-branded hotel in the Philadelphia area.
The hotel has 329 rooms, strong occupancy rates, and rising nightly rates. Yet the acquisition price is well below comps in the area where the cost per key is roughly 20-30% higher than our target property.
We — The Partners Fund — are preferred equity owners. We’ll receive at least 8% annual distributions through the end of 2025.
Meanwhile, the base case for this investment is conservative. If the hotels reach just 85% of 2019 net operating income (NOI) by the end of 2025, the exit gets us to an estimated 28.7% internal rate of return (IRR).
The LTV provide ample cushion and the assumable loan is at favorable, below market terms. And there are also considerable tax advantages based on how this deal is structured.
There’s still risk, of course. But the margin of safety looks favorable here.
