T3 Capital Fund I, LP · Realized

Extended-Stay Hospitality · Value-Add

WoodSpring Suites
Rio Grande Valley Portfolio

Three extended-stay hotels acquired at a discount to replacement cost, repositioned under new management, and sold 19 months later at a 224% cash-on-cash return.

Location

South Texas

Units

363

Hold

19 months

Status

Realized

Investor IRR

57.5%

Net of fees & promote

Cash-on-Cash

224%

Net of fees & promote

Investment Period

19 mo

Dec 2020 – Jun 2022

Value Increase

~55%

$10.6mm → $22.0mm

Capitalization

Purchase price$10.6mm

Total capitalization$12.2mm

Debt$7.2mm

T3 Capital equity$5.0mm

Outcome

Sale price$22.0mm

NOI at acquisition~$1.0mm

NOI at exit$1.8mm

Equity returns$16.2mm

Cash-on-cash224%

Investor IRR57.5%

How value was created

Discounted basis

Acquired at $29,201 per unit — a significant discount to replacement cost for a 2010-vintage portfolio.

Management change

Nationwide replaced the prior manager, driving occupancy to the mid-90s and rents above pro forma.

Targeted renovation

A consistent interior and exterior scope replaced piecemeal work, unlocking real rent premiums.

3Properties

363Units

4-StoryExtended Stay

90%+Extended-Stay Revenue

Disclosures. For informational purposes only; not an offer to sell or solicitation to buy any security. Reflects a single realized investment selected to illustrate strategy and is not representative of all investments or overall portfolio performance. Past performance is not indicative of future results. IRR and cash-on-cash returns shown are net investor returns after all fees and promotes. Figures are approximate and unaudited. Certain statements reflect the manager's judgment as of the date indicated and are subject to change.

Realized Investment

Full-Service Hospitality · Value-Add

Crowne Plaza
San Antonio Airport

A 224-room full-service hotel acquired out of a foreclosed portfolio, repositioned through a major renovation and new management, and sold in 2022 at a 4.3× equity multiple.

Location

San Antonio, TX

Keys

224

Hold

6.7 yrs

Status

Realized

Equity Multiple

4.3×

Gross MOIC

Equity IRR

~25%

Over a 6.7-year hold

Total Profit

$7.3mm

On $2.2mm invested

Total ROI

~332%

Realized gain

Capitalization

Purchase price$5.0mm

Renovation & capex~$6.0mm

Total debt$11.0mm

Invested equity$2.2mm

Loan-to-cost83%

Outcome

Sale price$17.5mm

Net sale proceeds$6.5mm

Cumulative cash flow~$3.0mm

Equity returns$9.5mm

Total profit$7.3mm

Equity multiple4.3×

How value was created

Distressed entry

Acquired for $5mm out of a foreclosed five-asset portfolio, against a property that had carried a $19mm mortgage.

Full renovation

~$6mm of capex repositioned a dated full-service tower into a competitive airport-market hotel.

Management reset

New general manager and sales team, plus renegotiated vendor and tax terms, drove cash flow positive in year one.

224Rooms

6,000 sqftMeeting Space

5.5± AcresLand

AirportSan Antonio Submarket

Disclosures. For informational purposes only; not an offer to sell or solicitation to buy any security. Reflects a single realized investment selected to illustrate strategy and is not representative of all investments or overall portfolio performance. Past performance is not indicative of future results. Figures are approximate, unaudited, and stated on a gross basis; returns do not reflect the deduction of management fees, carried interest, or fund expenses, which would reduce returns realized by an investor. Return metrics are calculated on invested equity and reflect the manager's estimates. Leverage is presented as loan-to-cost.

Realized Investment

Hospitality · Value-Add

Four Points by Sheraton
Little Rock Midtown

A foreclosed, distressed hotel acquired at auction, recapitalized, and rebranded — then sold at a 4.1× equity multiple.

Location

Little Rock, AR

Keys

263

Hold

4.3 yrs

Status

Realized

Equity Multiple

4.1×

Gross MOIC

Equity IRR

~39%

Net to equity

Total Profit

$8.0mm

On $2.6mm invested

Total ROI

~307%

Realized gain

Capitalization

Total capitalization$12.0mm

Invested equity$2.6mm

Loan-to-value78%

Outcome

Sale price$17.2mm

Starwood key money$0.6mm

Equity returns$10.6mm

Total profit$8.0mm

Equity multiple4.1×

How value was created

Discounted basis

Bought at auction for $5mm, well below replacement cost — a built-in margin of safety.

Brand conversion

Clarion to Four Points by Sheraton, unlocking Marriott demand and $600k of Starwood key money.

Operational reset

New management and a leaner team drove NOI from $986k to $1.2mm, then a full renovation.

263Rooms

14,000 sqftMeeting Space

5.5± AcresLand

MidtownNear UAMS Medical

Disclosures. For informational purposes only; not an offer to sell or solicitation to buy any security. Reflects a single realized investment selected to illustrate strategy and is not representative of all investments or overall portfolio performance. Past performance is not indicative of future results. Figures are approximate, unaudited, and gross of fees, carried interest, and fund expenses, which would reduce investor returns. Return metrics are calculated on invested equity and reflect the manager's estimates; years in which NOI was reinvested into capital improvements generated limited distributable cash flow.

Realized Investment

Select-Service Hospitality · Value-Add

Holiday Inn Express
Royse City, Texas

A mismanaged 68-room asset bought below replacement cost on $500K of equity — refinanced within a year to return all invested capital, then held for five more years of cash flow before exit.

Location

Dallas–Fort Worth

Keys

68

Hold

5.75 yrs

Status

Realized

Equity Multiple

6.75×

$3.38mm on $500K

Equity IRR

~160%

Time-weighted

Total Profit

$2.88mm

On $500K invested

Total ROI

~575%

Realized gain

Capital returned
in year one

A $3.8mm refinance approximately 12 months after acquisition paid off the original $2.8mm loan and returned $1.2mm to equity — 2.4× the $500K invested. Every dollar thereafter was return on capital already recovered, which is what drives the outsized time-weighted IRR.

Capitalization

Purchase price$3.25mm

Original debt$2.80mm

Invested equity$500K

Distributions to equity

Refinance proceeds (yr 1)$1.20mm

Cash flow distributions$975K

Net sale proceeds$1.20mm

Outcome

Sale price$5.20mm

Equity returns$3.38mm

Total profit$2.88mm

Equity multiple6.75×

How value was created

Below replacement cost

A non-performing, mismanaged asset acquired for $3.25mm in a strong Dallas–Fort Worth submarket.

Operational turnaround

New management and disciplined cost control lifted NOI from $125K to $523K — more than 4×.

Early recapitalization

A $3.8mm refinance at month 12 returned 2.4× the equity, de-risking the deal while retaining full ownership.

68Rooms

2009Year Built

4.2×NOI Growth

DFW MetroplexNear Rockwall Tech Park

Disclosures. For informational purposes only; not an offer to sell or solicitation to buy any security. Reflects a single realized investment selected to illustrate strategy and is not representative of all investments or overall portfolio performance. Past performance is not indicative of future results. Figures are approximate, unaudited, and stated on a gross basis; returns do not reflect the deduction of management fees, carried interest, or fund expenses, which would reduce returns realized by an investor. The internal rate of return shown is time-weighted and is elevated by the return of all invested capital via refinancing in the first year of the hold; the equity multiple and total ROI may be more representative measures of overall performance. Return metrics are calculated on invested equity and reflect the manager's estimates.

Realized Investments

WoodSpring Suites

Crowne Plaza

Four Points by Sheraton

Holiday Inn Express