CIO Bulletin

Driftwood Capital – A vertically integrated commercial real estate development platform specializing in hospitality

Some real estate developers only do it for the money, but the good ones do it well and make money because they love what they do. Having a positive impact on the world around them is their goal, and that is why real estate development is important. That positive impact can be far-reaching for local communities, turning small hamlets into sustainable towns. Without real estate development, we wouldn’t have homes, shops, schools, hospitals, and other essential buildings to protect us from the elements and service our needs. The reason why real estate development is important is because it supports progress in our society. Real estate development helps communities on an economic level too. The act of building alone provides employment, which trickles down and helps people live more prosperous lives. With new commercial developments, people can open shops and other necessary infrastructure such as schools and hospitals, which all employ more people and help the community grow and improve their economic circumstances. In small towns, real estate development attracts more residents, and in urban areas, real estate development can rejuvenate regions that have lost their earlier appeal. These developments help maintain or even improve local property prices, which also aids the local economy.

Driftwood Capital is a vertically integrated commercial real estate investment, development, and lending platform specializing in hospitality. The principals of Driftwood Capital boast a 30+ year track record transacting on more than $5 billion in hospitality assets through various affiliated management and ownership entities. In 2015, the principals of Driftwood Capital launched a unique syndication model for accredited investors to access otherwise exclusive institutional-quality hotels. All Driftwood Capital funds benefit from the principals’ affiliation with Driftwood Hospitality Management (“DHM”), which currently manages over 70 full and limited-service hotels with more than 15,000 rooms across 22 states and is regarded as a long-standing industry leader and best-in-class operator. Driftwood Capital’s ever-growing syndicated investor network has expanded to more than 850 investors comprised of high-net-worth individuals, family offices, and small institutional investors across the globe. Through strong partnerships with leading hotel brands and lenders, a sterling reputation among brokers, a professional team of industry experts, and an affiliated best-in-class hotel operator, Driftwood Capital provides the necessary structure and high-quality opportunities for accredited investors to achieve long-term capital growth and wealth preservation.

Leveraging Advance Real Estate Development Solutions

Customized Investment Solutions: Driftwood Advisors offers institutional investors a range of private investment opportunities across the commercial real estate industry. They believe their targeted investments across the capital stack satisfy the clients’ varied needs across the risk/return spectrum. ‍They invest their capital alongside their investors to help ensure a complete alignment of interests throughout the entire life cycle of the deal. The company's goal is to create long-term partnerships with clients by delivering superior risk-adjusted returns in their sectors. Driftwood’s team of industry leaders' sources, underwrites and structures complex deals. Deep relationships with brokers, lenders and brands ensure Driftwood Capital sees the most compelling deals in the market. With more than 200 acquisition opportunities carefully reviewed annually, they believe they have developed a thorough set of underwriting criteria to find core, value-add, and opportunistic investments that deliver meaningful risk-adjusted returns for investors. Development Services: Driftwood Development’s strong, in-house team is knowledgeable in all aspects of hospitality, including underwriting, site identification, land assembly, zoning and entitlements, financing, design, construction, and pre-opening management, as well as other general real estate development services, investment services, and management services. The company's deep network of joint venture partners includes brokers, lenders, brands and commercial real estate professionals who are seeking a hospitality counterpart. When choosing a development project, they consider such factors as barriers to entry, tax credits and other inducements, key money and other points of differentiation. Additionally, they utilize unique capital formation strategies that take advantage of Federal programs such as Qualified Opportunity Zones and the EB-5 Investment Program, for which they have dedicated team members.

Strategic Lending: Capital markets capabilities combined with deep industry knowledge enables Driftwood to make high-yield mezzanine and preferred equity investments in quality, franchised or select independent boutique hotels and resorts throughout the United States. Investments may yield “equity-like” returns for “debt-like” risk, with downside protection through substantial equity subordination. Driftwood Capital analyzes lending opportunities through an equity lens, leveraging decades of industry knowledge as owners and developers. They also underwrite the sponsorship group to ensure credit-worthiness and good character. Should the borrower default, they believe Driftwood Capital is uniquely positioned to protect the investment.

Management Services: Driftwood Capital’s management platform brings a comprehensive approach to realizing cost efficiencies and optimizing revenue management, all with outstanding client service. They combine decades of experience with an entrepreneurial spirit and encourage independence, strategic problem-solving and use of systems, data and processes to achieve goals. A diversified portfolio of hotels throughout the United States and 15,000 keys under management encourages their team to continually develop and refine best practices that are then introduced across their portfolio of select service, full-service, extended stay, and convention center properties.

The Leader behind Driftwood Capital's Success

Carlos Rodriguez, Sr. is the Founder, Chairman, and Chief Executive Officer of Driftwood Capital. He oversees all activities and growth at Driftwood Capital. Carlos has been in the hospitality business for over 35 years where he has operated, acquired, developed, and made loans to various hotels all over the United States. He is the recipient of numerous industry awards such as Entrepreneur of the year for the Doral Chamber of Commerce, the National Excellence in Construction award from the Associated Builders and Contractors Inc., the Lifetime Achievement Award from Hilton, Hotelier of the Year for the Latin Hotel Owners Association, Developer of the Year for various hotel brands, among many other recognitions that he has received throughout his life.

He is a native of Costa Rica and holds a B.S. in Finance from Vanderbilt University, a hospitality certificate from Cornell University, and an MBA from Duke University’s Fuqua School of Business. Though Driftwood Capital is always on his mind, Carlos unwinds by riding his bike, playing tennis, playing cards, watching football, reading, going to movies, hiking, traveling, and – last but certainly not least - playing with his grandchildren.