As we published earlier this month, Shelbourne Falcon has listed an equity crowdfunding offer on EarlyShares for Hotel RL in Washington, DC. The property was acquired in October for $22.5 million; renovations are already underway. The sponsor is holding a reception and tour of the Hotel this January to encourage investors to invest in the project. The new hotel (formerly the Quincy) has been converted to the Hotel RL brand and will be operated by Red Lion Hotel Corporation following the completion of the project.
In 2015 Red Lion Hotels Corporation (RLHC) and Shelbourne Falcon entered into a partnership in which RLHC sold a 45% stake in 12 of its hotels containing 2,531 rooms to a Shelbourne Falcon affiliate. The entire transaction is said to have totaled $123 million including $26 million to renovate these hotels. The project is said to be “laser focused” on successfully introducing a new Hotel RL to the metropolitan DC market. While RLHC is not seeking equity participation, Shelbourne Falcon is interested in accredited investor participation. The solicitation is to raise $3.54 million with a minimum participation level of $25,000. The estimated internal rate of return is a stated 17.2%.
In total Shelbourne owns 18 hotels with over 3600 rooms across the US.
Hotel RL is targeting a millennial audience and is opening multiple locations in different cities. Launched in 2014, it’s new full-service conversion brand targeted for the top 80 U.S. urban markets. Inspired by the spirit of the Pacific Northwest and designed for consumers with a millennial mindset, Hotel RL is centered on the concept that a hotel should be a town square where visitors and locals meet to collaborate. The DC RL is located near the White House with easy access to much of the city.
The offer is part of EarlyShares pivot into the hot real estate crowdfunding market. Real estate crowdfunding has become one of the most vibrant sectors of online finance allow far greater access to an asset class that was previously the realm of the very wealthy or institutional funds.
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