Private Equity Offering Extended For Boutique Hotel In Sonoma County's Wine Region

Yang Capital has elected to extend its offering on the CrowdStreet platform for The Sandman Santa Rosa Hotel beyond its original deadline of April 13, 2022. The company has also updated its investment targets based on recent operating results and additional upside opportunities.

View the original offering announcement.

The target internal rate of return (IRR) has been increased to 18% from 17% and the target average cash yield has been increased to 10% from 9.4%. The offering has been extended until May 11, 2022.

The Property: The 135-key independent hotel is situated on 2.79 acres in the heart of Santa Rosa, CA. The hotel serves as an ideal launchpad for visitors exploring Sonoma’s renowned wine country region.

The proceeds of the offering will be used to pay off existing mezzanine debt and to implement a $3 million renovation that includes certain interior renovations to hotel units, exterior beautification and improvements to certain common areas.

• Minimum investment: $25,000
• Target investor IRR: 18%
• Target equity multiple: 2.1x
• Target average cash yield: 10%
• Target investment term: 5 years

Editor’s Take: The hospitality industry was one of the hardest hit by the COVID-19 pandemic, making hotels an ideal opportunity as we enter the next phase of the recovery.

The sponsor has taken a conservative approach to underwrite this deal, assuming an average occupancy rate of 67.1% after renovations, even though the company has averaged 67% occupancy over the past three years.

The property also has conservative leverage at 43% leverage-to-cost and a high average debt service coverage ratio of 4.45. This means significant downside protection for investors, along with the potential to outperform target returns.

The “Editor’s Take” reflects the opinion of Kevin Vandenboss, Managing Editor of Alternative Investments at Benzinga, and should not be considered investment advice or used as a primary basis for an investor’s decision to invest.

Find more information on this offering and other private equity real estate investments through Benzinga Alternative Investments.

Photo: Courtesy of CrowdStreet