David Kessler, founder and CEO of Sandstone Partners LLC, talks about his company’s plan to build a retro-chic boutique hotel, The McKinstry, a redevelopment project that became the co-winner of America’s Most Impactful Project award at the Opportunity Zone Expo in Denver. With over 19 years of real estate investment and development experience, Kessler shares insight into the story behind the project, the company’s mission and goals, as well as his expectations regarding the future of the Opportunity Zones program.



Can you please tell us about your project that won America's Most Impactful Project in Denver?

We purchased a 15,000 square foot vacant mansion that was built in 1835 and sits on a half-acre corner lot in the heart of Hudson, New York, which is known as "the downtown of upstate." We are redeveloping and expanding it into a 55-key, 35,000-square-foot independent boutique hotel with extensive amenities. With only 204 rooms in the market yet over 200,000 tourists per year, the Hudson hospitality market is thriving yet underserved.

What do you hope to achieve with your project?

Our mission statement is that we seek to improve the environment in which we live, work, and play, generating exceptional returns for our stakeholders and partners, while creating value for the community at large by executing business plans that neighbors value and embrace, which is true for this project.

With the development of The McKinstry, we hope to create a significant number of new full-time job opportunities for local residents, partner with local small businesses, fill a need in the market due to the undersupply of hotel rooms in the area, and provide excellent locally sourced food and drinks at an accessible price point to our customers. We also aim to generate excellent risk adjusted returns for our shareholders and partners.



What did it mean for you to win this OZ competition?

Despite being smaller than the other participants in terms of project and team size, we still came out on top. We are even more confident in the success of this project after seeing how well it was received at the Opportunity Zone Expo in Denver. Participating in America’s Top Project competition gave us exposure to industry professionals that we otherwise would have never met.

What advice would you like to give other companies competing in upcoming competitions?

Know your audience, be persistent, and believe in yourself and your project.

How would you describe your company?

Sandstone Partners is based in Hudson, NY, only three blocks from the project site. The company was founded in 2018. Sandstone Partners brings design excellence, financial expertise, and creativity to real estate projects in the Mid-Atlantic and New England. We target underperforming mixed-use, hospitality, and multifamily properties executing business plans ranging from value add to ground-up development. Our conservative underwriting, strong attention to detail, and user focused philosophy results in exceptional returns for investors. The firm’s innovative design not only allows us to deliver strong profits for investors but also enhances the community in which our projects are located. We pride ourselves on a culture that values integrity and collaboration in everything we do. Drawing on our deep understanding of real estate, cultural trends, and demographics, we seek unique development opportunities often overlooked by others that truly change a neighborhood.

What are your top business goals for this year?

To round out the capital raise for this project and commence construction for The McKinstry.

What are your plans for the future?

We see this as the first of several similar projects that we do in this region. We are already identifying a few potential future site acquisitions throughout the Catskills, Hudson River Valley, and the Berkshires. We intend to develop several independent boutique hotels and mixed-use projects in the region.

What do you think we can expect from the Biden administration when it comes to OZs?

We think the Biden administration will continue to push their proposal for a significant increase in the capital gains tax rate and close or reduce the 1031 exchange loophole, which means that projects located within the federal Opportunity Zones will become much more attractive.


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