VOCO Sandcastle Oceanfront Resort

 

Myrtle Beach, SC – Renovation/Rebranding

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Industry

Real Estate

Company Type

Hospitality

Size

$20 Million

Investment Type

Equity

Overview

Hybridge Capital Management (HCM) has acquired the Sandcastle North Oceanfront Resort in Myrtle Beach, SC off-market – seeking $20 million of equity (at their initial basis) to fund renovations and rebrand the property as an IHG VOCO.

Oceanfront property in a thriving hospitality market that attracts 19 million visitors a year due to its stunning beaches, warm climate and wide range of activities and entertainment options


Excellent value-add opportunity with total expected project cost of about $47 million – less than $200,000 per key compared with the sales of two nearby unrenovated Hilton properties at $243,000 per key


Executed franchise agreement with IHG Hotels to rebrand as a VOCO hotel (which is providing $4.1 million of ”key money”), IHG’s fastest growing brand – 55 hotels across 25 countries, such as Australia, Singapore, the United Kingdom and the UAE


Sponsor has invested $8 million of equity to acquire the property and is willing to de-lever its position, depending on investor preferences on check size

Opportunity

The Sandcastle has been a popular destination since the 1980s due to its beautiful water views, proximity to the beach, and access to many tourist attractions, such as the Myrtle Beach boardwalk, the Sky Ferris wheel, the public fishing Pier 14, amusement parks, water parks, and over 90 championship golf courses


Previous owner was an independent operator who built the 101-room main hotel in 1984 and added two more buildings of 70 rooms each in the mid-1990s


Due primarily to the challenges across the hospitality industry from the COVID pandemic and the need for significant upgrades and updates to maintain market appeal, the owner decided to sell the property


Branded hotels in the area, such as Marriott and Hilton, have outperformed the independents hotels in terms of occupancy and revenue per key – adding the VOCO brand may help to significantly improve the Sandcastle’s performance

Renovation/Rebranding Strategy

Hybridge plans to shut down the property in the fall of 2024 and conduct a comprehensive six-month renovation – upgrading guestrooms, lobby, amenities, infrastructure and dining facilities


Plan to sign franchise agreement with IHG to relaunch the Sandcastle as a VOCO resort, IHG’s newest and fastest growing brand


IHG is expected to provide $4.1 million cash “Key Money” as an incentive, which will be used toward the renovation of the property


Partnering with Springboard Hospitality, a highly innovative hotel manager that has specialized for 30+ years in transforming dated hotels to be more appealing and profitable – currently manages 46 hotels across 13 states


Springboard has already begun to upgrade staffing, technology, performance measures monitoring, accounting/financial management and reporting to help improve the guest experience and increase financial performance and efficiency

Recent VOCO Hotel Openings

Management

Max Mellman, Managing Partner, Hybridge Capital


  • Over 12 years industry experience and wealth of industry knowledge, having grown up in a commercial real estate family. Proven track record of identifying and executing profitable real estate investments
  • Prior to founding HCM, also founded Max Benjamin Partners, Inc., a boutique real estate investment bank focused on debt and equity placement in commercial real estate projects across the nation, which has consistently delivered strong returns to investors while maintaining a steadfast commitment to ethical and socially responsible investing

Sean Williams, Chief Development Officer, Springboard Hospitality


  • Oversees new business development and investing for Springboard Hospitality and affiliates
  • Professional and academic career in hospitality, investment management, investment banking, and real estate private equity spans three decades across three continents
  • At GreenOak, led the negotiation, structuring, acquisition and asset management for over $750 million in hotels based in the United States, including the Thompson Miami Beach, the Hotel Figueroa in Los Angeles, and the award-winning Surfjack Hotel in Hawaii

Jacob Hallum, Associate, Hybridge Capital


  • Jacob is an associate at HCM, where he is responsible for sourcing, underwriting, and managing acquisition and development opportunities
  • Jacob is also a leader on the asset management team where is responsible for the performance of a variety of product types including our multifamily, office, and hospitality assets
  • Jacob is a graduate of University of Southern California, where he earned his Master of Business Administration (MBA) and Master of Real Estate Development (MRED) degrees

Ben Rafter, President and CEO, Springboard Hospitality


  • Leads growth, strategy and hotel revenue generation for Springboard Hospitality. Previously, president and CEO of Aqua Hospitality and president of Aston Hotels & Resorts, the largest hotel operator in the Waikiki market
  • Grew Aqua Hospitality fivefold in less than four years, from a small Waikiki operator to the only hotel company on all six Hawaii tourism islands, and also completed more than 20 renovations ground-up developments
Learn More About Hybridge Capital Management

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CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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