Real estate crowdfunding investment platform EarlyShares has closed its latest real estate investment opportunity from RPS Hotel Holdings. The offering was a USD3.125 million equity capital raise for the recapitalisation and renovation of a 90-room Courtyard Marriott hotel property in Lynchburg, Virginia.
The deal featured estimated investor IRR of 15 per cent and estimated cash-on-cash returns of 14.7 per cent. The sponsor intends to launch a follow-up deal of similar asset quality and economics within the coming months. (Investors can sign up for EarlyShares here to receive updates on RPS Hotel Holdings’ next deal.)
The recently closed Marriott Courtyard offering was a real estate crowdfunding deal in which accredited investors were eligible to participate for a minimum investment of USD25,000 or more. EarlyShares closed the offering with a combination of direct investments from US-based investors and USD1.7 million sourced from international investors. (The international investors’ contributions were pooled into an “EarlyFund” managed by EarlyShares Management.) As the sponsor, RPS Hotel Holdings contributed 30 per cent of the total equity raise.
The Marriott Courtyard offering benefited from a number of factors that made it a compelling investment opportunity. The property, situated just outside Liberty University, is consistently the No1 or No2 performing hotel in the region. In spite of being due for renovation, the hotel had grown in both revenues and net operating income in recent years. The crowdfunding capital raise for the property’s renovation and recapitalisation – which included a USD2.2 million renovation to completely modernise the hotel to 2016 brand standards – provided a unique opportunity for EarlyShares investors to own a premium branded Marriott hotel with in-place cash flow, upside opportunity, and an eighteen-year franchise agreement personally guaranteed by the sponsor.
“Our team at RPS Hotel Holdings is very pleased with the results of the Marriott Courtyard capital raise. We look forward to returning to EarlyShares to crowdfund our next real estate deal,” says Richard Pietrafesa, Managing Member of RPS Hotel Holdings. “Our organisation takes a very disciplined approach to asset acquisition and management, and we’re happy to be working with EarlyShares to bring more investors into the exciting deals in our portfolio.”
“EarlyShares is committed to working only with highly respected real estate developers and sponsors – and RPS Hotel Holdings is an excellent example,” says Heather Schwarz, co-founder and CSO of EarlyShares. “The Marriott Courtyard deal was exactly the kind of return driven investment offering EarlyShares specializes in sharing with our investor base. We look forward to helping RPS close their next capital raise quickly and efficiently through our state-of-the-art platform.”
