Easton Pacific utilizes our current relationships at Hilton, Marriott, and La Quinta in order to acquire "shovel ready" premier projects that are currently available, off market at discounted rates. The hotel brands are prepared to assist us in identifying and acquiring the very best projects that meet our acquisition criteria.
The hotel brands have projects that are in "technical default" due to the developers inability to obtain financing and/or equity to build the project. The defaulted developers would rather sell to a hotel brand-selected purchaser than risk franchise default. This is a win-win for all involved as it supports the brands development goals and assists the current developer in gracefully exiting the project or entering into a joint venture with us to recapitalize the project.
Window of Opportunity
The opportunity exists due to the current hospitality market metrics and the availability of attractive financing to build the projects. With a team that posesses a unique and diverse background in their related field to research and diligence each site, coupled with our developed systems and guidelines, we are able to quickly and effectively qualify deals that are presented to us.
Our ability to choose projects with great upside potential that have brand-approved locations and partial or complete entitlements provides lower risk with upside opportunity. A substantial lack of new inventory coupled with demand for Select Service Hotels is the driving force behind this opportunity. Current market conditions provide an extremely positive acquisition and startup environment and growth potential.
Company Projects Exit Strategy
The company's exit strategy is to build the project, stabilize occupancy, and sell or permanently finance within 5 years.
Typical Business Plan:
- Open, ramp up, operate and stabilize the project. Obtain non-recourse construction and permanent financing, allowing for possible return of investor equity and partial profits, or sell the project for full distribution of profits. Each project will have a defined plan of sale or refinancing.
- If the strategy is to sell at stabilization of occupancy, then the project may be sold to a REIT, institutional investor, or other operators, thereby allowing for the return of investor equity and profit. If in the Company's best interest, the sale to a REIT or institutional investor may be pre-negotiatied with a buyer prior to occupancy stabilization.