Strategy & Investment Focus

DHG will target assets that have CMBS debt coming due and franchise-required PIP’s that will not be met by the current ownership, creating a pressured selling environment and an Opportunistic Buying Opportunity for DHG. The Managers will, on a disciplined basis, utilize their knowledge of real estate and hotel operations to focus on opportunities that blend near-term return opportunities provided by existing assets with select ground-up opportunities that create value but take longer to realize returns to the fund or individual assets.

The real estate model will be one that directs its focus on existing properties where value can be added, but that is below the radar or desire of large institutional or Wall Street buyers on a single-asset basis. The typical asset would be a minimum size of 50 keys, ranging upward to 500 keys, with a value of $4MM to 50MM. The Venture will seek middle-market hotels such as Hampton Inns, Holiday Inns, Best Westerns, and similar middle-tier flags of upper-end brands such as Spring Hill Suites. In this market, there’s less yield compression than in the top-tier sector, similar to what is now occurring with up-branded Hilton and Marriott products. We will seek opportunities in this sector where we can add value through implementing renovations, product improvement plans, and overall operating efficiencies and revenue growth. Where the demand and opportunity warrant, DHG will build from the ground up or convert non- Hospitality Real Estate into hotels.

It is our firm belief that by diversifying our portfolio across various brand levels that DHG will mitigate the downside risk potential while increasing the opportunity for yields over our targeted yield structure.

In summary, our strategy will be one of buying at a pricing level where we can create value by enhancing the net operating efficiencies and exit at the appropriate time. To a lesser extent, DHG will selectively develop or convert where the opportunities with demand generators make a compelling case.

Exit Strategies

Our purchase methodology and exit model in each given Brand Level will be one of “Buy or build, fix, and sell.” The Managers will seek opportunities where they can deploy their talents and funds to buy assets in need of attention to increase Occupancy, RevPAR, and overall Operating Efficiencies, which should result in increasing the Net Operating Income and Asset Value.

When buying land for building we will know that we can build and generate rates and occupancy levels at a cost to Revenue Multiple that will allow for an exit Capitalization Rate that will generate double-digit yields. Each project will be closely monitored and compared to market conditions for each Asset with the purpose of facilitating a Single Asset or Bundled Asset sale at a time that maximizes returns to DHG investors.

Geographic Focus

The Managers will be primarily focused on second-tier markets throughout the Southeast, generally ranging from Virginia down through Georgia and into certain markets in Florida such as Orlando, Jacksonville, and Tampa. We will be looking at cities that offer depth in demand generators, product supply, barriers to entry, solid demographics both from a population and socioeconomic perspective, as well as a stable business environment. Also, select third-tier cities such as Charlottesville, VA, or Greenville, NC will be considered due to the dynamics created and fueled by universities within said cities.

Investor Criteria

DHG is primarily seeking Institutional Investors or Family
the ability to provide standby Capital that can be deployed on a discretionary basis and in a timely manner. Secondarily, DHG will accept funds from accredited High Net Worth Individuals.

Raise Amount

DHG seeks pre-committed funds ranging from a minimum of $500,000 to a maximum of $50,000,000 to be deployed in multiple assets within the Hospitality sector on a transaction-by-transaction basis. When aligning with the Crow Funding platform our investment units are substantially lower.

Timing

Ongoing

Return Structure & Projections

Preferred 8% base with negotiated waterfalls over the base. Strike return to Investors 10 % cash on cash, or 15% IRR& a Two multiple on the Equity invested. Investment life expectancy is 3 to 7 years.

Manager Fees & Expenses

DHG will obtain market fees on all acquisitions, operations, and strategic sales. DHG will self-fund all upfront costs associated with the business operations, reimbursing DHG only from any specific transaction. If there are costs associated with transaction breakups, the Investor has no liability. Importantly, DHG acts as the sole Guarantor on any debt incurred on any given acquisition.

Risk

The Investor shall only be at risk for its direct investment and not for any debt associated with any given asset or assets.

Investor Profile & Question

“The segment would be one where the investor whether it be a individual, family office, or private equity shop states its desired deal structure, return expectation and the minimum and maximum investment amount to be considered.”