[Private Deal Alert] Private Equity Investment Offering For Myrtle Beach Hampton Inn Targeting a 20.2% Annualized Return

The private equity real estate investment platform CrowdStreet is releasing its latest offering today, the 121-key Hampton Inn in the heart of Myrtle Beach, SC.

The Hampton Inn Myrtle Beach-Northwood hotel is in the northern part of Myrtle Beach in the Grande Dunes area. The hotel is only three blocks from the beach and 20 minutes from Myrtle Beach International Airport.

The hotel is currently mismanaged and, despite its excellent location and strong flag, is underperforming compared to its competitors in the market. The sponsor’s value-add plan involves a $4.4 million investment into property improvements and partnering with a seasoned hotel management company.

Investment Highlights: The property is being acquired by Suncroft, a repeat sponsor on the platform with a successful track record of positive returns through 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 to be successful, even during the COVID-19 pandemic.

• Minimum investment: $25,000
• Target internal rate of return (IRR): 20.2%
• Target equity multiple: 2.1x
• Target average annual cash yield: 20%
• Target investment term: 5 years

Benzinga’s Take: Based on the sponsor’s conservative underwriting, the property should see a 2.07x increase to the net operating income (NOI) by the end of the fifth year. However, it’s the author’s opinion that the asset could see an even greater improvement, assuming a continued recovery throughout the hospitality industry.

Deal Sponsor: Suncroft is a multi-generation real estate investment firm with a focus on hospitality 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-add business model.

The Staybridge Suites asset is currently performing better than projected, with a RevPAR (revenue per available room) increase from $85.30 to $107.29 since acquisition and an increased average daily rate (ADR) from $106.49 to $142.39. The hotel’s EBITDA outperformed projections in 2021 by $419,000.

View more details about this offering and others on the CrowdStreet platform through Benzinga Alternative Investments.

Photo: Courtesy of CrowdStreet