Goal: Attract private equity in order to develop or acquire hotels.

Secondary Goals: Generate positive cash flows while maximizing long-term asset values.

Investment Rationale: Numerous factors currently contribute to the attractiveness of hotels: Abundant capital, strong industry fundamentals, customer demand for hotel rooms exceeds supply, and less attractive opportunities in other asset classes.  Icon investors are typically high-net-worth individuals or industry insiders who desire to invest in hotels over a period of 5 to 10 years as part of their portfolio diversification. Icon utilizes its extensive operating expertise to improve operating results and produce positive cash flows.  Appreciation in asset values allows us to leverage owned hotels to reward our investors and fuel growth.

Financial: Private investors fund the equity required for each deal and receive a minimum of 10% as a preferred annual return. Investors receive their 10% preferred return first, after which the balance of available cash is distributed on an 80%/20% basis to investors and Icon’s Founder/CEO, who serves as managing member.  If investors fail to receive any or all of their 10% preferred return at the end of a particular year, the shortfall is accrued. Upon availability of cash, or upon sale or refinancing of a hotel, investors receive their accrued shortfall of preferred returns first, then their original equity, with any remaining balance split 80%/20% between investors and the managing member. A signed “commitment-to-fund” qualifies an investor for participation in a given deal, with actual funding required approximately three weeks prior to closing. Icon’s “Charter Investors” and the “Charter Members” of our Advisory Board will have first right of refusal in all future deals.

Management: As mentioned above, Icon’s Founder/CEO serves as managing member. He will source and qualify IHS investments, prepare Letters of Intent, negotiate Sales and Purchase Contracts, conduct Due Diligence, fund Earnest Money Deposits, secure qualified investors, arrange equity and debt, select and supervise the management company, and “partner” with property-level operating teams to maximize cash flows and asset value.  In return for his efforts, the managing member owns 20% of each deal through a "promoted interest."  

Status: The founder and family and friends have committed $600,000 for investment in IHS deals. 

Action: Generate additional private equity funding.