MIAMI—Driftwood Capital (formerly Driftwood Acquisitions & Development), a privately held real estate firm specializing in hospitality investments, is restructuring and scaling up its activity in 2020 via its new Development, Acquisitions and Mezzanine Lending GP Funds.
To encompass all new funds, the management team behind Driftwood Acquisitions & Development (DAD) has rebranded as Driftwood Capital. It is targeting development and acquisition deals across the country in the $30 million to $150 million range, though as evidenced by the company’s planned $250 million, 502-key oceanfront Westin Resort in Cocoa Beach, FL, they have the capacity to take on larger projects. Through its mezzanine lending division, the company is issuing loans in the $3 to $50 million range.
“The decision to scale up our existing acquisitions and development activities and launch a new lending business was driven by two main factors,” said Chairman/CEO Carlos J. Rodriguez, Sr. “First, we want to continue to meet the growing demand in the marketplace for alternative investments. Second, we want to ensure we have a long runway ahead of us for future capital deployments. In addition, with the launch of our lending platform, we now have the ability to fulfill a growing niche for small to midsize loans in the hotel space.”
He continued, “Our real estate asset syndication model has proven very successful and popular with investors. With these new funds, we will invest in a broader range of hospitality opportunities with longer time horizons to syndicate LP capital, ensuring greater volume, diversity and security for our investor network. We are actively engaged in expanding our network of investors. We are also expanding our strategic partnerships with others in the market wherever we find synergies. We will consider joint ventures with other experienced investment groups/developers across the country.”
Investors in the new GP Funds consist of DAD’s initial investors, as well as longstanding LP investors, strategic capital partners, and other JV partners. A handful of these investors will be named to three advisory boards and investment committees. Additionally, Driftwood Capital has strengthened its management team to help position it as a leader in the marketplace, and recently hired David Steiner as managing director of capital markets, Nelson Parker as managing director of development, and Paul Sacco as chief investment officer.
Sacco is responsible for overseeing and exploring strategic growth opportunities for the company as well as portfolio strategy, including oversight of the company’s asset management and investor relations divisions.
Prior to joining Driftwood, Sacco served as EVP/president of global development for RLH Corporation. Prior to joining RLH, he served as president/chief development officer of TPG Hotels & Resorts for four years. From 2003 to 2012, he served in various capacities, including SVP/chief development officer (North America) for Starwood Hotels & Resorts Worldwide.
Parker and his team are responsible for sourcing and overseeing commercial development opportunities nationwide with a strong hospitality component, with projects in the $30 to $150 million range.
He has more than 20 years of experience leading every aspect of complex, multi-party transactions and hospitality-related real estate development projects. Prior to joining Driftwood, he was SVP of corporate development at Penn National Gaming, where he led more than $1.5 billion in M&A and real estate development projects. Previously, he served as SVP of hotel and casino development at Hard Rock International, overseeing commercial and tribal development activities for Hard Rock Hotels and Hard Rock Hotels & Casinos worldwide.
Steiner is responsible for directing the firm’s new Mezzanine Lending GP Fund, sourcing mezzanine lending and preferred equity transactions in the hospitality sector, as well as leading the firm’s debt sourcing for its acquisitions and development businesses. He and his team will originate subordinate debt in the $3 to $50 million range.
He joins Driftwood Capital from Wall Street investment bank Cantor Fitzgerald, where he served as a director in the New York office’s Commercial Real Estate Finance Group (CCRE). He was responsible for originating fixed- and floating-rate loans on all property types across the U.S. and the Caribbean. He brings with him over 10 years of experience financing commercial real estate at all levels of the capital stack and has closed more than $5 billion of transactions.