Thread: Sandcastle Hotel Myrtle Beach SC

Sandcastle Hotel Myrtle Beach SC

From the Sponsor.

Overview: 

• Myrtle Beach, SC 
• Off market - Beach front 410 key acquisition with land assemblage, MF, office components 
• Initial 39M purchase price – We brought this down to 36M
• Estimated as-is value of ~55M 
• Estimated 45k a key in improvements to bring flag on north tower(IHG , Hyatt) in 2023 
• We are buying this off market at an incredible basis. 88k a key
• Comps trading 150k-240k a key

Deal Economics 

• 19M-21M total raise (range is to consider reduced leverage in this environment)  
• Project level IRR 40% (sale after y10)
• 4x multiple over 10 year period (sale after y10)
• 20%+  projected average cash on cash return 
• 11.5% cap rate going in (8.5 cap market) 

Our structure:

• $4.5M commit from General Partnership
• 79% HCM Investor contribution – 21% GP contribution   
• Min check size:  $50,000  
• Max check size: $2,000,000
• 8% pref 
• Once investment is fully returned with 8% yield
• 50%  - 50% split thereafter
• Projected LP IRR 27% 
• Projected LP Multiple 4.05x – 10 year hold (we may hold shorter term)