NexPoint Lodging II DST Overview
NexPoint Lodging II DST is an all-cash, two-hotel Delaware statutory trust offering from NexPoint Real Estate Advisors IV, L.P., the 1031-exchange arm of Dallas-based NexPoint, an alternative investment platform with roughly $16.1 billion in real estate assets under management. The trust owns 289 keys across two nationally flagged select-service and extended-stay hotels: the 153-key Courtyard by Marriott Bradenton Sarasota/Riverfront, located directly on the Bradenton Riverwalk on Florida's Gulf Coast, and the 136-suite Homewood Suites by Hilton Hartford South - Glastonbury, a six-story all-suite extended-stay property just south of downtown Hartford, Connecticut. The properties were acquired in March and May 2026 for a combined $61.95 million ($27.7 million Riverfront, $34.25 million Glastonbury), and the $81,573,000 offering is funded entirely with equity - zero leverage. Each hotel is leased to an affiliated master tenant under an 8-year master lease (base rent plus percentage rent of 75-80% of revenue above a baseline), with day-to-day operations handled by third-party manager Dreamscape Hospitality Management. The offering carries substantial reserves - $8.93 million at the trust level (10.95% of the offering), the bulk earmarked for brand-mandated PIP renovations at both hotels - plus $580,000 in master tenant reserves. Monthly distributions are projected to start at 6.30% in year 1 and climb to 7.69% by year 8 (7.15% average), with a projected sale in approximately year 8. Minimum investment is $100,000 for accredited investors under Rule 506(c).
Highlights
Zero leverage on an operating-intensive asset class. The $81.57 million capitalization is 100% equity - no senior loan, no mezzanine debt, 0% loan-to-capitalization. For a hotel deal, where cash flows swing with occupancy and ADR far more than apartment or net-lease assets, the absence of debt service removes the single biggest historical killer of lodging investments: a lender foreclosing into a soft RevPAR cycle. There is no balloon maturity, no refinance risk, no lender covenants, and no loan documents to constrain a future sale or the 721 exchange. Downturns pressure distributions, not principal survival, and the structure eliminates leverage-driven boot mismatch complexity for exchangors coming out of debt-free sales.
Two premier flags from the two dominant hotel systems. The Bradenton property operates as a Courtyard by Marriott under a fresh 15-year relicensing franchise agreement with a Marriott affiliate (effective March 2026), and the Glastonbury property carries the Homewood Suites by Hilton flag under a new 15-year Hilton franchise agreement (effective May 2026). Both brands bring national reservation systems, loyalty programs (Bonvoy and Hilton Honors), and marketing muscle that independent hotels cannot match, and the newly reset 15-year terms mean franchise expirations sit well beyond the projected 8-year hold - a meaningful advantage over hotel deals bought with short remaining flag terms.
A funded renovation story designed to drive yield growth. Roughly $6.06 million in PIP renovation reserves (plus ADA, immediate-repair and water-line reserves) are set aside from day one to complete brand-mandated property improvement plans at both hotels within 18 months - refreshing guest rooms, lobbies, meeting space, exteriors and amenities. The projections show the payoff: Riverfront occupancy climbing from 63.9% in year 1 to roughly 75% post-renovation, portfolio RevPAR jumping 12.1% in year 2, and DST distributions stepping from 6.30% in year 1 to 7.69% by year 8. Investors are buying the upgrade capital pre-funded rather than hoping a future owner writes the check.
Complementary markets and demand drivers reduce single-asset risk. The Courtyard sits on the Bradenton Riverwalk in Florida's Gulf Coast leisure corridor, near Sarasota-Bradenton International and Tampa International - the latter under way on a $1.5 billion, 16-gate Airside D terminal expansion. The Homewood Suites draws extended-stay corporate demand from the Hartford MSA: RTX/Pratt & Whitney's aerospace campus, Mitsubishi Power Aero's global headquarters, major healthcare systems and Fortune 500 insurance campuses, running a projected 84% occupancy in year 1. Leisure-weighted Florida paired with corporate-weighted Connecticut gives the trust two different demand cycles rather than one.
An institutional sponsor platform with a built-in 721 pathway. NexPoint manages approximately $16.1 billion in real estate assets and has completed over $22.3 billion in acquisitions since 2012, sponsoring public REITs including NexPoint Residential Trust and NexPoint Real Estate Finance. The parent trust agreement includes an Exchange Right under which interests may be exchanged for operating partnership units of a NexPoint-affiliated REIT in a Section 721 transaction - a potential exit into a diversified vehicle without triggering gain - and a Periodic Purchase Offer program that may provide interim liquidity beginning two years after the properties were acquired. Projected base-case exit: 1.80x equity multiple at a year-8 sale.
Analysis of NexPoint Lodging II DST
Insights
In portfolio terms, this is a yield-and-growth engine, not a sleep-well anchor: an unlevered hotel operating business paying monthly income that starts at 6.30% and is projected to reach 7.69%, sitting at the opposite end of the risk spectrum from a zero-coupon net-lease DST despite sharing the zero-debt label. The relative-value math is genuinely interesting - a 7.15% average projected yield with no leverage beats most debt-free DSTs by 150-250 basis points, and the 10.87% upfront load is at or below the category norm, though the 3% disposition fee claws some of that back at exit. Payout coverage is real but thin at the margin: master tenants retain only $325k-$777k a year over rent, so a modest revenue miss defers percentage rent rather than cutting a cushion. The crux risk is the Riverfront asset - a 40-year-old Courtyard on a City of Bradenton ground lease, needing a $4.06 million PIP funded by a Depositor promissory note that was only 40% paid in as of the PPM, in a hurricane-exposed market, and underwritten to an 11-point occupancy ramp. The non-obvious insight: the Glastonbury Homewood Suites is the quiet ballast of this deal - 84% year-1 occupancy, corporate extended-stay demand from RTX/Pratt & Whitney and Hartford insurers, minimal PIP - which means investors are effectively being paid the hotel-risk premium on the whole portfolio while roughly half of it behaves like stabilized extended-stay. Note also the sponsor-initiated 721: NexPoint can compel an exchange into an affiliated REIT operating partnership after year two, so buyers should be comfortable potentially ending up in a NexPoint vehicle rather than a clean future 1031. This fits investors who want above-average monthly income, accept RevPAR cyclicality, and like the 721 optionality; it is wrong for anyone who needs contractual rent certainty, fee-simple real estate, or a guaranteed path to a subsequent independent 1031 exchange.
Advantages
The all-cash capital stack is the headline strength: with 0% loan-to-capitalization there is no debt service, refinance exposure, or lender-forced sale risk in a cyclical asset class - distributions flex, but the equity cannot be wiped out by a maturity default. Reserves are unusually deep at $8.93 million (10.95% of the offering) plus $580,000 at the master tenants, pre-funding the Marriott and Hilton PIPs, ADA work and immediate repairs, so the value-add plan is capitalized on day one rather than dependent on future cash flow. Both franchise agreements are freshly reset 15-year terms (2026 effective dates), outlasting the 8-year projected hold. Yield progression is attractive for income buyers: 6.30% year 1 rising to 7.69% by year 8, paid monthly, averaging 7.15% - above what most stabilized zero-debt DSTs pay. The master leases share upside with investors through percentage rent (80% of revenue over baseline at Riverfront, 75% at Glastonbury), and projected exit economics are conservative-adjacent: a 7.96% base-case exit cap rate produces a 1.80x multiple and 9.7% average annual return at a year-8 sale, with FF&E reserves accruing at 5% of revenue from year 3 to keep the assets sale-ready. Market diversification across a Gulf Coast leisure corridor and a Hartford-area corporate extended-stay node, plus an unaffiliated third-party hotel manager (Dreamscape Hospitality), round out the profile.
Concerns
This is hotel operating risk in a DST wrapper: there is no credit lease, and rent to the trust is a function of nightly RevPAR at two properties - the projections assume portfolio RevPAR grows 12.1% in year 2 and ~3% annually thereafter, and any recession, new supply, or renovation disruption flows straight into the 80%/75% percentage-rent formula. The Courtyard is a 1984-vintage hotel on a ground lease with the City of Bradenton (99-year term expiring April 2079, improvements revert to the City), meaning investors own a leasehold, not fee simple, and a ground-lease default could forfeit the asset. Both master tenants must complete extensive PIPs within 18 months or risk franchise termination, and the Riverfront PIP reserve was funded not in cash but via a $4.062 million promissory note from the Depositor, guaranteed by OSL Holdco - only $1.62 million had been funded as of the memorandum date, adding counterparty risk to the renovation plan. The master tenants are thinly capitalized affiliates backed by demand notes tied to Ohio State Life (AM Best B+), and the master leases are not triple net - the subtrusts bear taxes, insurance and capex. Upfront load is 10.87% (9.35% offering costs plus a 1.52% sponsor acquisition fee), and the sponsor takes another 3% disposition fee at sale on top of 3% exit costs. The 721 Exchange Right is sponsor-initiated: the manager can compel the exchange after a two-year window, and holders who decline units receive taxable cash. The PPM also flags possible taxable boot from exchange funds used to pay acquisition costs, hurricane/flood exposure in Bradenton, and a best-efforts offering with no minimum raise.
NexPoint Lodging II DST — Complete Offering Data
Offering & Structure
Investment NameNexPoint Lodging II DST
SponsorNexPoint
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusAvailable
Last Updated2026-08-03
Size & Availability
Total Offering$81,573,000
Equity$81,573,000
DebtAll-Cash
Available Equity$81,573,000 (100% of equity)
Minimum Investment$100,000
Total Load10.87%
Initial Reserves10.95%
Property
Property TypeHospitality
StrategyCore-Plus
LocationCT, FL
Market TierTier 2
Income & Projections
Average Yield7.15%
Projected Yields (Y1–Y10)Y1 6.30% · Y2 6.50% · Y3 6.93% · Y4 7.25% · Y5 7.39% · Y6 7.54% · Y7 7.58% · Y8 7.69%
Tax-Adjusted Yield13.14%
Cap Rate Equivalent8.93%
Year 1 NOI$5,186,232
Y1 Payout Ratio1.01
Financing
In-Place LTV0.00% LTV
Exit
Estimated Hold Period8 years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income7.15% vs 4.52% market — Above Average
Growth22.06% vs 17.70% market — Above Average
Peak7.69% vs 4.83% market — Above Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
