Driftwood Capital Enters 1031 Exchange Channel With $23.9M Hotel DST
Driftwood Capital, a Miami-based commercial real estate investment firm focused on hospitality, has launched its first retail-distributed Delaware statutory trust offering, targeting approximately $23.9 million in equity commitments and anchored by a 174-key Courtyard by Marriott near Fort Lauderdale, Fla.
The offering, Driftwood Hotel Income I, DST, is structured for accredited investors seeking Section 1031 exchange-eligible replacement property. The program expects to use approximately $17.75 million in debt, representing a loan-to-value ratio of approximately 43%, according to the company.
The underlying asset is the Courtyard by Marriott Fort Lauderdale Weston, located at 2000 N. Commerce Parkway in Weston, just west of Fort Lauderdale. Driftwood acquired the hotel from Ashford Hospitality Trust on April 21, 2026, for $22.75 million, or roughly $131,000 per key, according to Broward County recorded deeds. Fifth Third Bank provided $19.3 million in acquisition financing. The hotel was developed in 2002 by CNL Hospitality Properties and sold to Ashford as part of a 30-hotel portfolio in 2005.
The offering will be distributed through the independent broker-dealer and registered investment adviser channel with Metric Financial serving as managing broker-dealer.
While the launch represents Driftwood’s inaugural retail DST, the firm and its principals have transacted on more than $5 billion in hospitality assets since 2015, including ground-up developments, stabilized hotels, and hotel-backed loans. The sponsor said it has executed like-kind exchange transactions and brings that experience to the DST structure.
Driftwood said it expects to evaluate additional DST opportunities, potentially expanding the platform with compact full-service, premium-branded select-service, and extended-stay hotels in markets it believes demonstrate attractive corporate and leisure travel demand.
“The hospitality sector has long offered compelling risk-adjusted opportunities for investors,” said Carlos Rodriguez Jr., president and chief executive officer of Driftwood Capital. “With the launch of Driftwood Hotel Income I, DST, we are continuing our commitment to expanding opportunities for 1031 exchange investors, providing an additional investment option for eligible 1031 exchange investors seeking passive exposure to hospitality real estate.”
Hotel DSTs remain a smaller segment of the broader DST market, which is dominated by multifamily, industrial, and net-lease retail assets. Driftwood’s entry extends a trend of specialized operators bringing sector-specific DST programs to the 1031 exchange channel.
Driftwood Capital’s sister firm, Driftwood Hospitality Management, provides property management for the firm’s hotel portfolio.
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