Black business leaders launch hotel investment fund

A trio of African American business leaders has formed the U.S. Diversity Group, a real estate owner, development and management firm that is now offering investment opportunities through its hotel fund for the acquisition and management of properties. It is the first SEC-registered hotel investment fund owned by African Americans, according to the company.

Led by CEO Velma Trayham, COO Toshia Posey and CFO Jacques Posey, U.S. Diversity Group is offering shares starting at $500 apiece, removing a major barrier for African Americans and others to enter the market.

“Less than 2 percent 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,” Trayham said. “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.” 

U.S. Diversity Group's model eliminates debt structure to maintain a strong cash flow. The group is employing the following strategies to maximize the return on investment for investors:

  • Already approved by a major franchisor to develop new-construction, dual-brand hotels; the flagship property will be located in Orlando;
  • Will also target brand-affiliated hotels with high cash-flowing assets and acquire distressed properties in growing metropolitan markets;
  • Implement value-add asset management through repositioning strategies and execution of successful fundraising;
  • Acquire nonperforming loan pools at deep discounts to current hotel values;
  • Both accredited and non-accredited investors may apply; and
  • Investor partners will get a 65 percent share of profit from the fund.

“We’re providing unique opportunities for individuals, especially African Americans, to invest in hotel real estate,” Toshia Posey said. “Whether your interests are personal, professional or philanthropic, we offer three investment options that allow you to create social impact through ownership. Using vertically integrated asset management, property management and creative services, we plan to turn our hotels into profit-generation centers for investors.”

“We truly believe this is an ideal moment to launch the first fund that gives African Americans the opportunity for hotel ownership,” Jacques Posey said. 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 favorable 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.” 

U.S. Diversity Group is a member of AAHOA and the National Association of Black Hotel Owners, Operators & Developers, while Trayham and the Poseys each have earned a Certificate in Hotel Ownership through AAHOA.