HOSPITALITY-CLOSED-FUNDS
Fund with Monthly Distribution Potential by Providing Financing for HoteliersNationwide
We are pleased to offer investments in Virtua Hospitality Finance Fund I, LLC, a small balance hospitality financing fund focused on mezzanine debt and preferred equity investments. This webinar reviews the offering details, strategy, and market considerations.
Virtua believes the market for small balance hospitality mezzanine loans and preferred equity investments is underserved. The imbalance of supply and demand presents opportunities to make loans at attractive risk adjusted returns.
Fund Terminates Dec 31, 2024
subject to extension for two additional one-year periods
Equity Raise
$25M
Class A Minimum Investment
$50,000
Class B Minimum Investment
$500,000
Sponsor Investment
20% of committed capital – up to $5M
Business Objectives*
Provide financing to borrowers seeking to build new or improve value of hotels in strong markets. Seek repayment through refinance or sale of hospitality investments.
Targeted Cash Flow*
First: 100% to the Class A and Class B Members, until such time as the Class A and Class B Members receive a 10% cumulative return on an annual non-compounded basis on their Unreturned Capital Contributions (“Accrued Annual Priority Return”);
Second: To the Class A and Class B Members until the cumulative amount paid to each Class and Class B Member has reduced the amount of each Class A and Class B Member’s Unreturned Capital Contribution to zero;
Third: Thereafter, 80% of remaining Available Cash for distribution among the Class A and Class B members and 20% to the Class C Member (Virtua).
Provided that to the extent investors do not realize an 11.5% IRR, Virtua will waive its promote.
*Investment in the Fund is inherently speculative. Targeted cash flow and business plan objectives are goals of the Fund and not projections of performance. This is an illiquid investment and there is no guarantee the Fundwill exit in the time forecasted.
Risks of the Offering
For a thorough discussion of risks please see the PPM. Some of the risks include:
- Specifically, investors in this Offering risk losing all capital invested therein and/or may not generate the returns at the levels the Fund expects
- The investment is illiquid and members may not withdraw without Consent of the Fund Manager or in contravention of SEC Rule 144
- We are subject to the risks inherent in lending against the security of a trust deed and other security interests on commercial real estate
- We may secure our loans with fractionalized deeds of trust with non-affiliates in which we may be a minority or majority holder
- We compete with a number of banks, savings and loan associations, mortgage banking companies, and investment firms.
- State usury laws may impose restrictions on the interest we can charge
- There could be a delay in the investment of proceeds from this Offering
- Due to the size of the fund, we may be limited in the amount of diversification we can achieve
Real Estate Risks
The Fund’s business is subject to all the risks associated with the real estate and lending industry
Investments in real estate are speculative in nature
Many of these factors are not within the Fund’s control and could adversely impact the value of the Fund ’s investments. These factors include, but are not limited to:
- downturns in worldwide, national, regional and local economic conditions;
- conditions affecting real estate in specific markets in which the Fund may invest, such as oversupply or reduction in demand for real estate;
- changes in interest rates and availability of attractive financing;
- changes in real estate and zoning laws;
- environmental and/or engineering issues unforeseen in due-diligence, and changes in environmental legislation and related costs of compliance;
- condemnation and other taking of property by the government;
- changes in real estate taxes and any other operating expenses;
- the potential for uninsured or underinsured property losses.
