The Out NYC hotel on West 42nd Street officially opened on March 1, but they’re still looking for financial input.
Someone I know got an email asking for some cash a week before the opening.
Mind you, the email — from an investment relations director — said the place is fully funded and doing great.
It’s just that they now have so much investor interest that the main owner wants to diversify “his large exposure.”
They’re doing so well that they’re giving you the chance to invest in them as the “Sponsor” takes some of his money elsewhere!
Here’s the email:
“Now that XL Nightclub is open and has exceeded expectations, with the hotel opening on March 1st, and recently an abundance of favorable press, a handful of our investors have increased their investment in recent weeks.
“Additionally, we have had numerous unsolicited inquiries about investing that we have since our last round closed. Although we are fully funded, as a result of this wave of investor interest, the Sponsor (Ian) is willing to slightly reduce his large exposure at his cost for diversification reasons. I wanted to reach out to you once more to see if you have any renewed interest.
“Investments in the project have ranged between $100K and $1MM. We are offering the exact same deal terms as last year (including a waived sponsor promote until you get all your money back) with an obvious much smaller amount of risk associated now that the project is fully funded and successful.
“New investors will come in as preferred equity investors with a 10% preferred dividend plus a guarantee of all money back before the Sponsor gets any promote. Over the 8 years that we have projected out cash flow, we expect cash returns with low leverage to average in the teens.”
So what do you say, gays? Deal or no deal?
This article from the Village Voice Archive was posted on March 12, 2012