This investment contains a high degree of risk, which is detailed in the Risk Factors section of the Carey Watermark Investors 2 Incorporated (CWI 2) prospectus. You should consider all of the risks described in the prospectus before you decide to purchase our securities, including the following:
- There is no public market for our shares; a public market is unlikely ever to develop and we are not required ever to provide you with liquidity for your shares. If you are able to sell your shares before we complete a liquidity event, you will likely receive less than your purchase price.
- This is a blind pool offering. We have not had any net income. We have a limited operating history and you will be unable to evaluate our complete investment portfolio prior to your investment.
- Our advisor and the sub advisor will be paid substantial fees based on factors other than the quality of services provided, which may encourage them to use increased leverage or to make riskier investments. Our agreements with our advisor, the sub advisor and Carey Financial, LLC, the dealer manager, are not arm’s length agreements.
- We will be subject to the risks of operating lodging properties and the lodging industry generally. Failure of lodging industry fundamentals to continue to improve may adversely affect our business strategy.
- Our failure to qualify as a REIT would adversely affect our operations and ability to make distributions.
- The payment of distributions is subject to the Board of Directors and there can be no assurance as to the amount or timing of any future distributions. Distributions are not guaranteed. Our distribution coverage using FFO was approximately 19% of total distributions for both the year ended December 31, 2016 and on a cumulative basis through that date with the balance funded with proceeds from our offering. Our distributions will likely exceed earnings before we have substantially invested the net proceeds of the public offering and may be paid without limit from offering proceeds, borrowings or sales of assets, which could reduce your overall return.
- We may change our investment policies, including our targeted class of investments, without stockholder notice or approval, which could change the nature of your investment and adversely affect our ability to achieve our investment objectives.
- As a new investor, you will experience substantial dilution in the net tangible book value of your shares equal to your shares’ proportionate share of the costs of the offering.
- Shares of our common stock are subject to a 9.8% ownership limitation that is intended, among other purposes, to assist us in complying with restrictions imposed on REITs by the Internal Revenue Code.
- Research may not reflect all views or studies of the past and prospective performance of the lodging industry. The information presented in this website may be known by others including existing and potential competitors, and competitive factors may diminish issuer returns.
Not FDIC or NCUA/NCUSIF insured, not bank or credit union guaranteed and may lose value.