Capital University Fund & Opportunity Fund I
We currently have two self-managed, private hotel investment funds, organized as Delaware master limited partnerships (MLP). In keeping with our acquisition strategy, in the initial offering Capital University Fund, the partnership has targeted and begun acquiring properties in Columbus, OH ( Ohio State); Nashville, TN (Vanderbilt); Atlanta, GA (Georgia Tech); Denver, CO (Colorado State); Baton Rouge, LA ( Louisiana State); Phoenix, AZ ( Arizona State). Because we have not identified all of the particular properties we intend to acquire, this fund is considered a “blind pool” offering. We expect the portfolio of hotels to have total acquisition and renovation costs of approximately $105 million dollars.
In Opportunity Fund I we have identified a portfolio of 15 well-known, upscale hotels in Midwestern cities that are currently in distress due to the state of the economy. We have the opportunity to acquire these properties at current capitalization rates that are significantly higher than average. With renovations and improved product placement we feel we can create a significant increase in value for our partners. We expect the total acquisition and renovation costs for this fund to be approximately $210 million.
Supreme Hotel Properties, Inc., a Delaware corporation, is the general partner (GP), and our investors are the master limited partners. Each of the hotel properties are held in operating partnerships whose income is passed through to the master limited partnership. The operating partnership structure also allows for flexibility in financing each hotel project and to diversify the risks associated with each property. Such risks include, but are not limited to, public liabilities, environmental hazards, market risk, and/or financing risks.
Due to our partnership structure, the MLP does not pay income taxes. Thus, unlike corporate investors, our investors are not subject to double taxation on dividends. Our limited partnership unit holders typically receive a tax shield equivalent to (in most cases) 80-90% of their cash distributions in a given year. Thus, an investor is typically paying income taxes roughly equal to 10-20% of his/her distribution. The tax-deferred portion of the distribution is not taxable until the unit holder sells the security.
The partnership is required to provide a complete set of financial reports including financial statements prepared according to generally accepted accounting principles, tax information returns, management discussion and analysis, material subsequent events, news items, and other relevant operating data on a quarterly basis to each investor along with their respective share of any cash distributions. The financial statements and other data contained in the Annual Report are required to be audited by an SEC-registered, independent audit firm selected by the audit committee of the General Partner’s Board of Directors.
Investor Suitability
All of our debt and equity securities ("Units") are offered to accredited investors through exempt private placements. To participate, each potential investor must complete an Investor Suitability Questionnaire. This Questionnaire is to be completed by each person or entity who intends to purchase units of the partnerships for their own account.
The purpose of this Questionnaire is to assure the Partnership that each investor will meet the standards imposed for exemption under the Securities Act of 1933, as amended (the "Act"), as the Units in the Partnership will not be registered under the Act.
Please answer each question. If the answer to any question is "None" or "Not Applicable," please state so.
Your answers will be kept strictly confidential at all times. However, by submitting this Questionnaire, you agree that the Partnership may present this Questionnaire to such authorities as it may deem appropriate if called upon to establish the availability under the Act or under any state securities laws of an exemption from registration of the private offering.
TO COMPLETE YOUR INVESTOR SUITABILITY QUESTIONNAIRE, CLICK HERE
