The resort’s majority owner says the goal is to raise $1.5 million. Accredited investors get credits, possible shared income and potential appreciation.
DEBRA GRUSZECKI | April 19, 2014 | OCRegister – Own a piece of “The Rock.”
That was the Wednesday morning wake-up call put out by Andre Carpiac, majority owner of Hard Rock Hotel Palm Springs, to investors to raise $1.5 million – or more – through a crowdfunding offer by the Beverly Hills-based real estate tech company, RealtyMogul.
In a rarity, if not a first, in the hotel business, investors can fork over from $10,000 to $200,000 to buy VIP status and a sliver of the 163-room resort property in downtown Palm Springs.
Beyond the welcome bottle of champagne and cheese plate, VIP “crowdies” have been told to expect room upgrades, use of the owner’s pool deck cabana – when available, a 25 percent discount on room rates and $50 per year in food and beverage credits.
Accredited investors will also get a crack at shared income from quarterly rental payments and any appreciation of the hotel when it is sold, the RealtyMogul.com offering says.
Carpiac, of Kittridge Hotels & Resorts, called the equity owner investment opportunity in the Hard Rock-linked affiliate, WealthForge LLC, a “winning formula” for everyone. It is the first major hotel in the United States to be crowdfunded in an online marketplace, and he believes it won’t be the last.
By noon Wednesday, RealtyMogul executive chairman Jay Samit said $500,000 was raised. “In the last 24 hours, it’s been off the hook,” Carpiac said Thursday.
Crowdfunding, a financial services industry buzzword, is catching on in commercial real estate investment. It differs from a real estate investment trust in that the crowdfunding portfolio is typically smaller and its properties or investment pool is well-defined.