A trio of African American business leaders has formed US Diversity Group, a real estate owner, development and management firm that is now offering investment opportunities through its hotel fund.
It is the first SEC-registered hotel investment fund owned by African Americans.
Led by CEO Dr. Velma Trayham, COO Toshia Posey and CFO Jacques Posey, U.S. Diversity Group is offering shares from $500, removing, it said, a major barrier for African Americans and others to enter the market.
Trayham said: “Less than 2% of hotel owners are Black, so we are proud to provide the opportunity for investors in any income level to gain access to hotel ownership. This offering will present a real partnership for change in the lodging industry that will generate more new construction projects, create jobs, allow investors the potential to achieve generational wealth with their families, and establish the next generation of hotels and hoteliers.”
The group said it had already been approved by a major franchisor to develop new-construction, dual-brand hotels; the flagship property will be located in Orlando.
It will also target brand-affiliated hotels with high cash-flowing assets and acquire distressed properties in growing metropolitan markets, as well as implementing value-add asset management through repositioning strategies and execution of successful fundraising.
Posey said: “We truly believe this is an ideal moment to launch the first fund that gives African Americans the opportunity for hotel ownership. First, it’s an opportune time to develop the company’s assets and structure while the lodging industry heads toward a recovery. Second, the private equity real estate industry has experienced favourable market conditions amid increasing demand for exposure in recent years. And third, new legislation that enabled equity crowdfunding allows funds like ours to make strategic hotel industry investment possible for individuals from a variety of economic circumstances."