Driftwood Hospitality Strikes $400 Million JV with Apollo Global Real Estate

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Strategic Partnership Focused on Acquiring and Repositioning Hotels across U.S.

North Palm Beach-based Driftwood Hospitality Management ("DHM") today announced a $400 million joint venture with a real estate investment fund managed and advised by affiliates of Apollo Global Management ("Apollo").  Through their collaboration, the companies have launched a broad acquisition strategy, pursuing the purchase, renovation and reflagging of full-service hotels across the United States.

"We are thrilled to partner with Apollo, a company that mirrors our own entrepreneurial spirit and aligns well with our strategic plan," said Driftwood Hospitality Management President David Buddemeyer.  "This relationship is focused on value creation, affording DHM the opportunity to fully utilize our vast operations expertise.  Out of the gate, we have already contracted to acquire $45 million of hotels with the Apollo fund's support and collectively, we plan to acquire up to $400 million of hotels through this relationship over the next two years."

As a leading hospitality industry player, DHM's current portfolio consists of 27 hotels comprising over 5,900 rooms in major resort destinations and top business travel and convention markets in the United States, the Bahamas and Costa Rica. This includes independent boutique and resort locations, as well as award-winning franchises of nationally recognized hospitality brand systems such as InterContinental Hotels Group, Starwood Hotels & Resorts Worldwide, Inc., Hilton Worldwide, Carlson, Choice Hotels International, Inc. and Wyndham Worldwide.

"We are pleased to have the opportunity to form this strategic relationship to capitalize on the recovering hospitality market in the U.S. with a best-in-class operator," said Raymond Mikulich, Managing Director and Head of U.S. Real Estate for Apollo.  "Driftwood and its principals have a long track record of success in the industry."

Apollo Global Real Estate is a fully integrated operating division of Apollo that sources, underwrites and structures investments in commercial real estate assets, companies and operating platforms through its multi-disciplinary team of real estate investment professionals.  Apollo Global Real Estate's investment professionals manage $6.5B in real estate assets as of March 31, 2011.

Armet Capital served as the investment advisor to DHM in this transaction.

"We are delighted to have advised Driftwood on this, and look forward to working with the joint venture's management in the implementation of their business strategy," said Jay Flannery, managing member of Armet Capital, which represented DHM as investment advisor in the venture.

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