Frequently Asked Questions
We understand that investing is a meaningful decision. Here you’ll find answers to the most common questions about Scholar Hospitality Holdings I LLC, the Scholar Owners Club, the investment structure, and what you can expect as an investor.
They are not included in this investment opportunity. The offering currently includes five properties: the Hyatt Hotel, Fraser Centre Retail, The Scholar Hotel, the Marriott Courtyard, and the Marriott Residence Inn.
The minimum investment is $5,000.00. Â The maximum total amount that may be raised under the offering is $75,000,000. Once this amount is reached, the offering will be closed.
Additionally, while there is no limit to the amount an accredited investor can invest in the offering (subject to the $75,000,000 offering limit), non-accredited investors may only invest up to the greater of 10% of their annual income or 10% of their net worth (if such investor is a natural person) or the greater of 10% of their annual revenues or 10% of their net assets based on the investor’s most recent fiscal year end (if such investor is a business or other entity). These caps on non-accredited investors apply to the total amount invested during the lifetime of the offering and are not reset annually to allow for additional investments in future years once these caps are met.
The specific details of the Club benefits are still being finalized. Overall, the goal is to provide the investors/members with the following benefits:
- Preferred Reservations
- Room Upgrades
- Dining Discounts
- Early Access to High Demand Weekends
- Access to Exclusive Events at the Hotels
In addition to properties included in the investment offering, the plan is to include other Scholar properties as part of the Owners Club. This would include the Nittany Lion Inn, The Penn Stater Hotel and the Nittany Residence Club.Â
Following the acquisition of the identified properties by Scholar Hospitality Holdings I LLC, the loyalty and benefit program is expected to commence thereafter, although timing may vary. The goal is for Scholar Hospitality Holdings I LLC to acquire the properties before December 31, 2026 with the Scholar Owners Club taking shape in early 2027.Â
Additional properties may be included in the loyalty program at the discretion of the Manager. Properties may also be added to or removed from the program at any time.
This FAQ is for informational purposes only and is qualified in its entirety by the offering circular and related documents. Prospective investors should carefully review the offering materials, including the risk factors, before making an investment decision.
This communication is being made pursuant to Rule 255 under Regulation A of the Securities Act of 1933, as amended, for the purpose of determining whether there is interest in a potential securities offering. No money or other consideration is being solicited or will be accepted, and no securities are being offered or sold, at this time. Offers to buy cannot be accepted and no part of the purchase price may be received until an offering statement on Form 1-A has been filed with and qualified by the U.S. Securities and Exchange Commission. Any indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance is given after the qualification date. An indication of interest does not constitute an offer to buy securities and does not obligate or commit any person to purchase securities or take any other action. If an offering statement is filed and qualified, a copy of the offering circular will be available at scholarhh.com, or may be obtained by contacting Gary Brandeis, Managing Member, Scholar Hospitality Holdings I, LLC, at scholarhh@scholarhotels.com.
The Investment
The minimum investment in Scholar Hospitality Holdings is $5,000. Investors may invest additional amounts in $5,000 increments, subject to the terms and availability of the offering.Â
No. Scholar Hospitality Holdings is being offered through a Regulation A offering, which allows both accredited and non-accredited investors to participate, subject to applicable investment limitations and the terms of the offering.Â
Scholar Hospitality Holdings is targeting annual cash distributions of approximately 4–6%, based on the investor's initial investment.Â
Returns and distributions are not guaranteed and will depend on the financial performance of the portfolio and other factors described in the offering documents.
Distributions are based on available net cash flow after operating expenses, debt service, reserves for capital improvements and other obligations of the portfolio have been satisfied.Â
Scholar Hospitality Holdings anticipates making distributions quarterly, assuming the properties perform as expected and sufficient cash is available for distribution.Â
Investors are also expected to receive quarterly reporting providing information about the portfolio's financial and operating performance.Â
Scholar Hospitality Holdings should be viewed as a long-term, evergreen real estate investment. The anticipated investment horizon could extend 15 to 20 years or longer, and the assets are not intended to be sold at a predetermined date.Â
Any future decision to sell or otherwise dispose of assets would depend on property performance, market conditions and the best interests of investors.
Scholar Hospitality Holdings combines an investment in income-producing real estate with hospitality benefits designed for investors who have a connection to Penn State, State College and Happy Valley.Â
Investors should evaluate the financial investment on its own merits while viewing the Scholar Owners Club as an additional benefit of ownership.Â
Ownership & The Portfolio
Investors own an interest in Scholar Hospitality Holdings, which in turn owns interests in the real estate assets included in the portfolio. The initial portfolio includes four State College hotels and the Fraser Centre retail property.Â
The hotel brands themselves—such as Marriott, Hilton and Hyatt—do not own the underlying real estate simply by virtue of their franchise agreements.Â
A change in franchise affiliation does not change an investor's underlying ownership interest in the real estate.Â
As franchise agreements expire, the existing agreement may be renewed, the property may affiliate with another brand, or it may operate independently, depending on what is determined to be in the best interests of the ownership group.Â
The Nittany Lion Inn and The Penn Stater operate under a long-term ground-lease arrangement with Penn State University. Because Scholar Hospitality Holdings does not own the underlying real estate and because of restrictions associated with those agreements, the properties are not currently included among the investment assets.Â
However, both properties participate in the Scholar Owners Club hospitality program.
Potentially. If the offering raises capital beyond the amount needed for the initial assets, additional capital may be used for purposes such as reducing debt, improving existing assets or pursuing additional hospitality-related investments.Â
Any future investments would be evaluated based on their potential benefit to the portfolio and its investors.
If future investment opportunities arise, particularly opportunities involving additional State College assets, existing investors may be provided an early opportunity to participate.Â
Any future offering would be subject to its own structure, terms and applicable securities requirements.Â
Liquidity, Transfers & Long-Term Value
Scholar Hospitality Holdings is designed as a long-term investment and should not be considered a liquid investment.Â
A matching or bulletin-board feature through the investor portal may help connect investors wishing to sell with parties interested in purchasing an interest. Investors may also be able to transfer their interest to another eligible person, subject to the terms of the offering.Â
There is no guarantee that a buyer will be available when an investor wishes to sell.
Potential options include transferring or selling the investment to another eligible investor or transferring it to a family member or heir.
Evolving technology and regulations surrounding tokenized private securities could create additional liquidity options in the future. However, no future trading mechanism is currently guaranteed.Â
The portfolio is expected to undergo an annual mark-to-market valuation process as part of its financial reporting. This may involve internal valuations and/or third-party appraisals of the underlying assets.Â
The resulting balance sheet can provide investors with information about the estimated value of their ownership interest. However, the price at which an individual interest could actually be sold may differ from its balance-sheet value.Â
Potentially. The value of the underlying real estate may increase or decrease based on property performance, market conditions and other factors.Â
In addition, as mortgage principal is paid down, the equity held in the properties may increase. These factors are expected to be reflected through periodic valuation of the portfolio.Â
The anticipated cash distribution percentage is based on the investor's original investment amount; it is not automatically recalculated based on subsequent appreciation in the value of the portfolio.Â
Any appreciation in the underlying real estate would instead be reflected in the value of the investor's ownership interest.Â
Additional Investments, Capital Calls & Dilution
No capital calls are permitted under the investment structure. Once an investor makes an investment, the investor will not be required to contribute additional capital.Â
Scholar Hospitality Holdings intends to maintain property-level reserves and access to credit facilities to address future capital needs.
Each hotel is expected to reserve approximately 4% of gross revenue for future capital improvements and renovations.Â
If those reserves are insufficient for a required project, Scholar Hospitality Holdings intends to have access to portfolio-level credit facilities that can provide additional capital as needed.Â
Dilution would generally only become a consideration if additional investors and additional assets were brought into the same investment structure.Â
Future Scholar Hospitality Holdings offerings may instead be structured as separate investment pools, depending on the assets and circumstances involved.
Yes, as long as the offering remains open and has not reached its maximum raise. For example, an investor who initially invests $5,000 may be able to make an additional investment later.Â
Once the offering reaches its maximum or closes, additional investments would no longer be accepted.
No. An unfunded portion of an investment cannot be reserved.Â
An investor may invest one amount now and potentially increase that investment later while the offering remains open, but availability cannot be guaranteed.
Transfers, Families & Estate Planning
Yes. The investment structure allows ownership interests to be transferred to eligible family members or other parties, subject to the terms governing transfers.Â
When an ownership interest is transferred, the associated Scholar Owners Club membership transfers with it.
Yes. The subscription documents allow investors to select how their investment will be held, including individual ownership, joint ownership by a married couple or ownership through an entity such as an LLC.
Yes. An entity such as an LLC may invest in Scholar Hospitality Holdings. However, an entity investment does not create multiple Scholar Owners Club memberships. One individual would be designated to receive the associated Owners Club membership.
Taxes & Investor Reporting
Yes. Investors will receive a Schedule K-1 reflecting their allocated share of the partnership's financial activity.Â
The goal is to provide K-1s by approximately March 15 each year, giving investors time to incorporate the information into their individual tax filings.Â
Yes. Investors will receive quarterly financial reporting and applicable financial information associated with the Regulation A structure.Â
Periodic investor communications will also provide opportunities to review the portfolio's financial and operating performance.
Scholar Owners Club
Scholar Owners Club membership is tied to the ownership of the investment. As long as you continue to own your investment, you remain eligible for the associated Owners Club benefits.Â
If you transfer or sell your investment, the membership transfers with the ownership interest.
The Scholar Owners Club is designed to provide investors with preferential access to rooms for high-demand periods such as Penn State football weekends, Arts Fest and other major State College events.Â
Exact timing, inventory and procedures will depend on availability and will be communicated to investors.Â
Scholar Owners Club members will have preferred access to a limited number of reservations at participating restaurants that accept reservations, particularly during high demand periods.Â
Availability will be limited and is expected to be offered on a first-come, first-served basis.
Yes. The Scholar Owners Club is intended to include benefits beyond overnight accommodations, including dining discounts, investor events and other hospitality opportunities at participating Scholar Hotels venues.Â
Scholar Owners Club benefits are intended for the investor and are not designed as freely transferable benefits for extended family and friends.Â
Yes. When staying at the corresponding branded properties on a qualifying rate, investors may continue to participate in the applicable hotel loyalty program, including Marriott Bonvoy, Hilton Honors and World of Hyatt.Â
No. An investment in Scholar Hospitality Holdings does not make an investor an individual Marriott franchise owner or provide access to Marriott's franchisee owner benefits or owner portal.
Offering & Funding
The Regulation A offering allows Scholar Hospitality Holdings to raise up to $75 million.Â
The offering contains different funding thresholds or tranches, which are described in greater detail in the official offering documents.Â
The offering is subject to minimum funding requirements. If the necessary conditions to proceed are not met, invested funds would be returned in accordance with the terms of the offering.Â
Investors should review the official offering documents for the specific minimum offering amounts, conditions and procedures.
No. Invested funds are held in a non-interest-bearing escrow account while the capital raise is underway. Investors do not begin participating in property distributions until the investment closes and they become owners in the investment.Â
The goal is to complete the capital raise and close the investment by the end of 2026. However, that timing is a goal rather than a guarantee.Â
The offering could also close earlier if it reaches its maximum raise.
Alignment & Investor Communications
Yes. Gary Brandeis and other existing investors will retain interest in the hotels that is being rolled into Scholar Hospitality Holdings, and the leadership team will maintain an ownership interest in the investment.Â
This structure is designed to align the interests of the Scholar team with those of the broader investor group.
Yes. Investors can expect regular communications, including quarterly financial reports and periodic investor webinars or meetings to discuss portfolio performance.Â
Scholar Hospitality Holdings is also expected to provide investors with applicable audited financial information and other reporting required under its Regulation A structure.