Hotel Real Estate Investment Syndicates - Post-Construction Phase Investment Opportunities & Reporting Requirements

Hotels, motels and condo-hotels can qualify for fractional real estate interest (tenants-in-common, a "TIC Plan") syndication at virtually any point of their choosing.  On this page we provide the documentation requirements upfront for the benefit of the developer, the investor and the regulator.

The Post-Construction Phase project commercial real estate fractional investment syndication due diligence disclosures required for listing are:

• Organizational Documents.  The following documents are required:

  • Incorporation Filings.

  • Tenants-In-Common Organizational Plan Filings.

  • Title

  • Title Insurance Commitment

  • Distribution Plan

• Financial Documents.  The following financial information is required:

  • Project Financial Statements - Audited Construction Phase Project Financial Statements.

  • Pro Forma Project Operations Budget.

  • Proposed Capital Funding Plan.

• Operations Documents.  The following operations documents are required:

  • Property Management Agreement.

  • Vendor Disclosures (for all vendors providing more than 5.00% of the operating budget).

  • Hotel Flag Reservation System Agreement.

  • Hotel Flag Franchise Agreement (if difference from reservation agreement).

These matters represent the minimum.  The due diligence disclosures requirements may be greater or smaller depending upon the entirety of the circumstances surrounding the syndication.