#United States #New York #Investment #DoveHill #Courtyard New York

DoveHill's Strategic Exit: An Impressive IRR Achievement

DoveHill, a leading real estate investment firm that specializes in hospitality, has recently celebrated a significant milestone with the successful exit from its preferred equity investment in the Courtyard New York Manhattan Chelsea. This strategic move resulted in an impressive 18.4% Internal Rate of Return (IRR) for investors over a four-year period, showcasing the firm's adeptness in managing investments under challenging market conditions.

Background of the Investment

In 2020, amid the tumultuous environment of the COVID-19 pandemic, DoveHill stepped in to provide much-needed preferred equity capital to the Courtyard property. The investment was essential for addressing the hotel's immediate operational needs, including covering shortfalls, maintaining loan reserves, and ensuring working capital was available. With an attractive last dollar basis of approximately $229,000 per key, DoveHill's entry point was significantly below the prevailing market trades and the costs required for replacement in New York City. This approach reflects DoveHill's disciplined emphasis on risk management and value creation.

Strategic Investment Approach During the Pandemic

DoveHill's bold strategy to raise its DoveHill Sponsor Fund I during the pandemic aimed to capitalize on distressed opportunities within the hospitality sector. By securing preferred equity capital at attractive valuations, the firm managed to navigate through a submerged market effectively. The current success of this exit can be attributed to this strategic approach and the exceptional track record the firm has established in managing investments.

As a testament to its success, DoveHill is now launching its second fund, DoveHill Opportunity Fund 2. This new fund is designed to pursue preferred equity investments in hospitality as well as direct equity stakes in unique and lifestyle-focused hotels. The competitive edge of DoveHill lies in its ability to source investments predominantly through off-market channels, coupled with its extensive experience in developing asymmetric investment structures that optimize returns while mitigating risks for investors.

Insights from DoveHill's Executives

Jake Wurzak, the Founder and CEO of DoveHill, articulated the significance of this exit: "We strategically deployed capital at a critical moment during the pandemic, leveraging our expertise and deep understanding of hospitality market cycles. This exit underscores our capability to identify, structure, and execute preferred equity investments with substantial upside while carefully managing risk exposure." Additionally, Charles Paloux, Chief Investment Officer at DoveHill, commented on the success of this investment, stating, "This successful exit validated our investment thesis. Through our new vehicle, we continue to be focused on hospitality preferred equity opportunities across the United States."

DoveHill: A Leader in Hospitality Investments

Founded in 2011 and based in Fort Lauderdale, Florida, DoveHill has established itself as a premier player in the real estate investment landscape, particularly within hospitality. The firm boasts a proven track record exceeding $1.5 billion in transactions encompassing over 19 hotel investments. DoveHill’s strategic operations focus on identifying growth opportunities in supply-constrained markets, and its hands-on approach ensures effective value creation and superior returns for partners and investors alike.

With a commitment to innovative strategies and operational expertise, DoveHill continues to attract attention as a model for successful investment in the hospitality industry, demonstrating resilience and strategic foresight.

For more information on DoveHill and its operations, visit DoveHill's website.