SOUSTA

Hospitality Value-Add Fund Strategy

Targeting Hotel Assets with Operational Upside and Strategic Location Value

Our Hospitality Fund targets value-add hotel opportunities with a strong focus on properties flagged by globally recognized brands such as Marriott, Hilton, and Hyatt. Our strategy is built on long-term relationships with leading hospitality brands and operators, enabling us to identify off-market or distressed hotel assets with substantial repositioning potential.

Investment Thesis

We acquire well-located, underperforming or lender-owned hotel assets at a significant discount to replacement cost—then unlock value through:

  • Strategic Renovations (PIP Execution): Capital improvements aligned with brand standards to enhance guest experience and revenue potential.
  • Operational Optimization: Replacing inefficient management with our experienced operating partners to drive immediate EBITDA gains.
  • Brand Leverage: Tapping into the loyalty programs, distribution engines, and brand equity of established hotel flags to boost occupancy and ADR (average daily rate).
  • Event & Amenity Activation: Selectively enhancing properties with high-yield amenities (e.g., Topgolf Swing Suites, co-working lounges, and local event programming).

Why This Fund is Different

  • Preferred Sponsor Status: Our partners have completed over 200 hotel projects, including the first AC Marriott in the Americas. We benefit from preferred developer status with Marriott and deep experience managing PIPs and repositioning assets across the U.S.
  • Location-Driven Selection: Each property is situated in a high-demand submarket near corporate campuses, sports headquarters, or lifestyle hubs—like Legacy West in Plano, TX, which is home to Toyota, JP Morgan, and the Dallas Cowboys HQ.
  • In-House Execution: From acquisition to asset management, we maintain control of the full value chain—resulting in higher margins, quicker turnarounds, and aligned interests with investors.

Fund Terms

  • Hold Period: 3–5 Years
  • Target Returns: 18%–22% IRR | 2.5x–3.0x Equity Multiple
  • Structures for All Investor Classes: Class A and Class B LPs, with tiered distributions and aligned incentives.
  • Transparency: Monthly reporting, quarterly financials, and a low-fee, no-waterfall structure focused on cash-on-cash returns from day one.