The L’Auberge de Sonoma Resort Fund LLC, a private placement offering sponsored by IMH Financial Corporation, has completed its $20 million preferred equity offering and is exercising its $5 million overallotment option to sell additional shares.
The fund was created to purchase and renovate the MacArthur Place Hotel and Spa, a 64-room luxury hotel located in Sonoma County, California. Originally purchased by IMH in October 2017 for $36 million, the hotel is currently undergoing a $20 million renovation.
“We believe the Sonoma market is well-positioned for continued growth,” said Will Meris, managing director. “We are seeing a demand for high-end hotel rooms there, which to date, has gone largely unmet. This renovation not only vaults MacArthur Place to the top of its class in Sonoma, but firmly entrenches it in the upper tier of luxury hospitality properties throughout wine country. We expect that the physical and operational improvements we are making will significantly increase the hotel’s earnings and lead to a material lift in the value of this asset over the years to follow.”
The fund is targeting a blended investor return of 14-16 percent annually and expects to monetize its investment in the hotel in three to five years. During that period, the overall return is paid monthly at a rate of no less than 7 percent per year. The minimum investment is $25,000.