DUSKFALL Deal Analysis

Base Case

Executive Summary

4 luxury stargazing domes, 6.82-acre cliff parcel, Saugerties NY. Owner-operated STR. Phase 1 of a 71-acre entitled assemblage.

VERDICT: GO
The thesis in one sentence. Infinity pool on a cliff under the Milky Way, 2 hours from NYC — a category that does not exist anywhere within 3 hours of the largest urban feeder market in North America.

Investment Highlights

  • No direct competition. Zero stargazing domes with private pools exist within 3 hours of NYC. 2 of 4 pools targeting cliff-edge infinity design (subject to structural confirmation).
  • Capital efficient. ~$757K/key all-in vs $500K–$830K for comparable boutique cabin developments. Bedrock anchors on existing site (well, septic, power) eliminate excavation.
  • Proven demand. Domes at Catskills (127 reviews, $375/night) and Luxury A-Frame Saugerties (131 reviews, 4.97★) validate premium unique-stay pricing in this exact market.
  • Owner-operated, zero staff. No employees, no restaurant, no front desk. Airbnb handles discovery, booking, payments, guest communication.
  • Inherently viral product. Stargazing domes are the #1 shared unique-stay category on TikTok/Instagram — organic social amplifies the $63K/yr marketing budget.
  • Phase 1 of larger opportunity. The 71-acre parcel is entitled for up to 121 resort units under the May 2025 Rural Resort SUP. These 4 domes validate the site before scaling.

Core Metrics vs Benchmark

MetricThis DealBenchmarkVerdict
Unlevered Yield (NOI / Cost)~21%8–12% = institutional qualityTop decile
DSCR (Stabilized)3.28x1.25x = lender minimum2.6× the floor
NOI Margin~58%40–45% = strong hospitalityAt high end
Levered IRR37.5%20%+ = institutional targetExceeds target
Equity Multiple10.9x2–3× = standard PE return3.6× the standard
After-Tax IRR (bonus dep)46.8%Levered IRR as floorShield front-loads returns
Y1 Tax Shield$795KEquity invested: $909K87% of equity back Y1

What You Need to Believe

AssumptionBase CaseFloor to Break EvenAssessment
Stabilized ADR$850/night~$570 (33% below base)Requires catastrophic miss
Stabilized Occupancy65%~35% (debt service only, at base ADR)Half of base = still viable
Exit Cap Rate9.5%14%+ to zero equityNo Hudson Valley comp near 14%
Construction Budget$3.03M+30% overrun = still fundableDents IRR, doesn't kill deal
The one real risk: ADR realization. The $850 stabilized ADR is the largest unproven assumption — no direct comparable exists. At $700 ADR (an 18% miss) the deal still produces 17% levered IRR and 1.71x DSCR. The deal does not go underwater until ADR falls to ~$560 (a 34% miss).

Why the Tax Structure Matters

Year 1 bonus depreciation shield of $795K is 87% of equity invested, returned as tax savings within 12 months of opening. Effective net equity at risk after Year 1: ~$114K. A 1031 exchange at exit defers all $2.1M in capital gains taxes. After-tax IRR of 46.8% exceeds pre-tax levered IRR because the shield front-loads returns beyond what the standard model captures.

Phase 2: The Asymmetric Upside

Phase 1 (4 domes) generates 37.5% IRR standalone — this is not a land position play. If the operating model proves at this scale, the 71-acre Rural Resort SUP supports four expansion paths:

ScenarioUnitsCapexEst. Stab. NOI
Phase 2A: +8 Dome Expansion8 add'l F75~$4.0M~$900K+
Phase 2B: Boutique Lodge12–16 rooms~$6.0M~$1.2M
Phase 2C: Full Resort Build-Out50+ units$18–25M~$4.5M+
Phase 2D: Sell Stabilized P1Exit$6.8M+ at 9.5% cap
Source of truth: stargazing_domes_proforma.py · Scenarios saved in browser localStorage.