Napa Hotel
Actual Returns
2.6x
14%
8.7 years
Internal Rate of Return
Equity Multiple
Holding Period
Executive Summary
RCP Napa Hotel, LLC invested approximately $1.7 million of equity to purchase The White House Inn, a bank-owned 17-room luxury hotel in downtown Napa in Napa Valley, California. The hotel was completely renovated in 2008 and lost to foreclosure because of excessive leverage during the economic downturn. The Napa Valley tourism industry has rebounded dramatically, and the hotel can now be purchased for $3.825 million (only $226,470 per room) from the bank, which equates to a 38% discount from its previous outstanding loan balance.
Closing Summary
The sale of The White House Inn has closed. The hotel sold for $10,050,000, which equates to $591,000 per room. There were no brokers involved which reduced transaction costs.
RCP Class A Investors have earned a 14% internal rate of return (IRR) and a 2.6x equity multiple over an investment period of 8.7 years.
This investment has overcome several challenges including an earthquake, several wildfires and most notably enduring through the global Coronavirus pandemic. This hotel was bought at a very attractive basis as one of the last post-2008 economic crisis-era distressed deals RCP was able to invest in. RCP is pleased to bring this investment to a conclusion with a favorable outcome.
