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Bay Street Capital | Hospitality Asset Management

2023 Alt Path Financials & Year in Review

Published 4 months ago • 4 min read

2023 Alt Path Financials & Year in Review

Elevating Hospitality Investments to New Heights

Our year in review highlights our hospitality portfolio's 23% increase in YOY revenue, new partnerships, and upcoming projects.

As we enter into 2024, we are excited to continue investing alongside our global network to elevate the hospitality industry to new heights.


2023 press and team recognitions include:

  • NAACP Entrepreneur of the Year (Will was selected by Shark Tank’s Daymond John out of 5000 applicants)
  • Linkedin’s Top 2% Hotel Management Voice (Will)
  • Investopedia’s Top 100 Financial Advisors (Will)
  • #1 Investment Firm of the Year (The Association of African American Advisors)
  • Cartier’s Women’s Initiative Global Finalist

1. 2023 FINANCIALS & RETURN ON AD SPEND

We are thrilled to share our meaningful growth and enhancement in the Resthaven Tahoe hotel operations over the past year.

Our number of total occupancies (room nights) has surpassed both the annual budget and LYA (last year's actuals), culminating in an impressive 18% overall growth, while revenue outperformed LYA (last year's actuals) by an outstanding 23%, equating to a substantial increase of $86k. These achievements are attributed to our strategic decision to convert the manager suite into a two-bedroom suite which led to a 4% improvement in our ADR (Average Daily Rate).

Furthermore, our ROAS (Return on Ad Spend) stands at an impressive 6:1 on Expedia and an outstanding 12:1 on Booking.com. This means for every dollar we spent on Expedia, we made $6, and for every dollar we spent on Booking.com, we made $12. These metrics underscore the efficiency and success of our marketing strategies. As we reflect on this exceptional year, we look forward to even greater achievements in the coming year.


VIEW COMPREHENSIVE RESTHAVEN TAHOE 2023 FINANCIALS

2. Resthaven Los Angeles Key Events & Partnerships

Resthaven L.A. Event Highlights

Breaking Sound x Resthaven LA feat Kanye Wests’ Sunday Service Choir

Black Girls in Media Wellness Retreat sponsored by Fabletics, The Gathering Spot, and Luna Magic Beauty

WalkGood LA x ON Running Yoga Session

BSCH x AAAIM Ping Pong Tournamen


Resthaven LA was originally purchased for $5.65m in July of 2022. Chase Bank is currently in the process of refinancing the property at a value of $7.9m giving us a total of $4m in equity all within the last year. The lot next door is currently for sale for $1.5m and we are in talks with the city of Venice to approve our plans of putting an near-beach apartment complex for short term tenants. The architects will be working closely with Ila to work through zoning.

Once approved, our budget calls for an additional $3m to build out the complex that will appraise for $14m.

Investor Relations Travel Expeditions

We visited Singapore in September and November 2023 to meet new GPs and LPs interested in partnering with our fund. Noteworthy connections are actively facilitating introductions. William participated in a panel session for the CFA Society Singapore.

Our trip to Portugal in October 2023 was equally productive, we had several key meetings with US government liaisons, Bison Bank, Azores Government, and Bankinter. Sheree Mitchel, our GP who lives in Portugal, played a crucial role in coordinating our activities.

3.UPCOMING PROJECTS

Our team has currently raised $12m of the remaining $18.5m target for our four boutique hotels in Portugal. Each property averages 55% cash incentives from local municipalities. We carefully select optimal locations for building and selling a curated property portfolio and have identified four regions (Azores, Alentejo, Coimbra, Minho) in Portugal that have high potential for future tourism and population growth. George Clooney (a well-known American actor) has also attached his name to a beach resort in the Alentejo region. Our evaluation considers collaboration with local regulators and EU incentives, targeting appealing exit/refinance opportunities at year three.

Portugal recently made major changes to their Golden Visa program and now investors can only gain citizenship through the 40 approved funds in the country. We are 1 of only 40 funds in all of Portugal that investors interested in citizenship through investment can consider. For more information on these changes and how we will benefit, please click to read the at the end of this newsletter.

Highlights of Our Favorite Project on Azores Island

São Miguel in the Azores region, which is the U.S. equivalent of Hawaii, offers significant potential for an upscale boutique hotel. Historically overlooked in tourism, this island is now gaining attention due to a popular Netflix series production and frequent visits by large cruise ships, presenting an opportunity for visionary hotel development. There are currently only nine hotels on the island. Hilton will be the first international hotel on the island with an expected completion date of 2026.

SHORT AZORES VIDEO

STRATEGY OVERVIEW

4. ADMINISTRATIVE UPDATES

After several attempts to improve our level of service and support, we’ve decided to transition from Juniper Square to Formidium for our fund adminstration. William met the Formidium team in March of 2023 at the US/Canada Investment Summit (AAAIM & AIMA). Bay Street has been an AAAIM trustee for the last three years and we’ve already seen a significant improvement in the level of detail and support provided by Formidium. Current investors will receive new login information that includes all contribution, performance, and subscription documents over the coming weeks. All property appraisals & financials will also be easily and readily available.

For all investors that are receiving first year distributions, an update will be provided once we complete our refinance on all three properties as rates have come down. Now that we’ve owned the properties for over 1 year, our bridge loan rate of 10% interest-only will be closer to a 6.8% amortization. Depending on zoming outcomes with the city of Venice, we plan to further develop the adjacent properties 518, 522, and 524 Rialto Ave or pay out a distribution at the end of Q2.

The upcoming purchase of 518 and the development plans can be reviewed on the strategy overview link above or here.


5. HOTEL INDUSTRY ANALYSIS AND INSIGHTS

The Art of Hotel Investing

The hotel investment industry is booming and investing in hotels has become an enticing prospect for many investors, especially in cities experiencing a surge in tourism and a growing demand for accommodation.

Top Golden Visa Programs for Investors in 2024

In the evolving landscape of global citizenship, investment for residency or citizenship has become a key consideration for investors in various industries.

🙏🏿

Bay Street Capital | Hospitality Asset Management

Targeted, Municipal & Country Specific, Government Incentives

Bay Street is an independent registered investment advisory firm headquartered in Palo Alto, CA with a focus on hospitality asset management. We manage portfolios with the goal of maintaining and increasing total assets and income. Although many advisors may focus on maximizing returns, we place a higher priority on managing total risk and volatility. William regularly collaborates with public and private organizations to successfully audit, structure, design, and implement low-cost, well-managed portfolios for defined contribution, defined benefit (pensions), endowments, foundations, sovereign wealth funds, insurance companies, fund of funds, RIAs, and feeder funds.

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