A View from the Front Lines: What’s Happening With Hotels Now

Carlos Rodriguez Sr.

Coral Gables, FL—Driftwood Capital, formerly known as Driftwood Acquisitions & Development,  specializes in providing access to hotel acquisition opportunities. Perhaps not surprisingly, given the havoc the coronavirus has rained upon the hospitality industry, Carlos Rodriquez Sr., chairman and CEO, has some things to say about the challenging times facing the hotel industry.

Driftwood owns and operates several hotels throughout the US. How is the Covid-19 crisis impacting your portfolio?

Driftwood Capital and its investors own 18 hotels throughout the US, and our sister company, Driftwood Hospitality Management, manages over 70 properties, so as this situation started unfolding, one of our top priorities was keeping our hotel staff safe. Simultaneously, we went into portfolio preservation mode and took a number of immediate steps to conserve cash, open a dialogue with lenders, and tap into government aid where applicable. The next few months are going to be incredibly challenging for the hospitality industry as a whole, but we’ve been through these kinds of Black Swan events before – we went through both 9/11 and the recession of 2008 – so we have a playbook for situations like this.

Driftwood recently announced it was scaling up its hotel development and acquisitions activities, and launching a new lending platform. How does this position you moving forward?

Yes, we just raised just over $200 million of capital from investors in two new GP investment vehicles – one targeting acquisitions and another development – and we’re fundraising now for the third GP Fund of another $100 million + for mezzanine lending. In the new fund we will target loans in the $3 to $50 million range. This puts us in the fortunate position to be well capitalized right now – I’m grateful every day for our timing on that.