Driftwood Capital (“Driftwood”)announces the successful initial closing of its latest fund, Driftwood Florida Space Coast Portfolio, LP (“Fund”), focusing on the acquisition and development of existing and soon-to-break-ground hotel assets in Florida’s “Space Coast,” one of the state’s fastest-growing markets for business and tourism.
Consisting of four large-scale beachfront assets representing world-renowned brands including Marriott, Hilton, and IHG, upon completion of the Westin Cocoa Beach Resort, Spa and Conference Center, the Fund’s portfolio is expected to represent approximately 11% of all the hotel rooms in the Space Coast market and 62% of the area’s beachfront hotel inventory. Each property in the Fund’s portfolio serves a unique guest segment tailored to its respective brand in order to best ensure individual hotel success.
“Since 2013, Driftwood has had a meaningful presence in Florida’s Space Coast,” said Carlos J. Rodriguez, Sr., Chairman and CEO of Driftwood Capital. “When we first entered this market over 10 years ago, we recognized the untapped potential for this region to become a hub that melds business, innovation, and leisure tourism. Today, as we continue to invest as a partner for growth in the Space Coast, the area continues to draw travelers and new residents as it emerges into a significant coastal destination with numerous demand drivers across a variety of sectors.”
Anticipating future growth and demand along the Space Coast, the Fund’s portfolio is projected to include more than 1,200 guest rooms, 166,000 square feet of meeting space, and 21 food & beverage venues on 36 beachfront acres – constituting a majority of the area’s hotel beachfront inventory.
The Fund’s portfolio is comprised of the following assets:
- Westin Cocoa Beach Resort (projected 502 guestrooms including 69 suites, 1300 N. Atlantic Ave, Cocoa Beach)
- Hilton Cocoa Beach (295 guestrooms, 1550 N. Atlantic Ave, Cocoa Beach)
- Element by Westin Melbourne (130 guestrooms, 2655 N. Hwy A1A, Melbourne)
- Crowne Plaza Melbourne (290 guestrooms, 2605 N. Hwy A1A, Melbourne)
Located in one of the nation’s most economically resilient areas (Space Florida) the Space Coast enjoys a variety of demand generators in numerous sectors. A perennial destination for businesses and travelers alike, the region’s proximity to Orlando and the increasing activities from the space industry have attracted millions of visitors every year. Today, Kennedy Space Center attracts more than 1.5 million visitors per year from around the world (NASA), more than 4 million cruise passengers embarked via Port Canaveral in 2022 – topping PortMiami (Canaveral Port Authority), and millions more visit from the Orlando MSA to enjoy the Space Coast’s beaches.
Identifying the Space Coast’s high barriers to entry and navigating them over the past decade, Driftwood has solidified its position as a major owner of hospitality assets in the region. Meeting zoning, environmental, and community considerations, Driftwood is the region’s premier owner/operator, delivering new hotel assets to meet continued global demand in this high barrier-to-entry market.
Increased demand is expected in the Space Coast market in the coming years. With 111 launches expected in 2024 per Florida Lt. Governor Jeanette NunÞez, last year’s record of 72 launches is expected to be surpassed by the year’s end. With the increased cadence of launches from both NASA and private commercial entities, Driftwood’s investment thesis for Space Coast growth has to-date proven true. Current projections indicate more than 300 rockets are expected to launch in 2028, drawing increased tourism and business travel.
Earlier in 2024, Driftwood announced that its hotel development pipeline exceeded $1 billion in projected value. Driftwood’s development portfolio includes projects valued at approximately $500 million which are either under construction or scheduled to break ground in 2024, demonstrating the firm’s robust and strategic position in the hospitality sector.q
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