Best Western Premier Energy Corridor Houston

  • Opportunity. The hotel is a newly constructed upscale Best Western Premier that will be delivered to an investor with no change of ownership PIP needed, making this a turn-key opportunity. This is the second Best Western Premier to open in Houston and the 29th to open in the U.S.; it was exceptionally constructed with a custom design package.
  • Location. The hotel is strategically located on Interstate 10 and Westgreen Boulevard, near several large power retail centers and restaurants, making it an ideal choice for guests. Additionally, the hotel is within a five-minute drive of Typoon Texas waterpark, Katy Mills Mall and several oil/gas office complexes that make up the area known as the Houston Energy Corridor.
  • Robust Pro Forma. The hotel opened in August 2016 and based on conservative underwriting, the hotel is expected to achieve an $66.15 RevPAR in 2017, which will flow through to a Net Operating Income (NOI) of $935 thousand. As the hotel finishes ramping up, it is expected to stabilize at a RevPAR of $74.43 in 2019, finishing the year with a $1.07 million NOI.
  • Houston Energy Corridor. The West Houston-Energy Corridor-Katy submarket has historically been one of the strongest markets in Houston, driven heavily by corporate travel in the oil/gas industry. As the oil prices recover, oil/gas companies are expected to open up budgets for corporate travel. This could lead to an increase in hotel room demand and drive room rates higher.
  • New Development. Because of the growing Katy and West Houston area, there is a surge in new company growth in 2017: Shell Oil is relocating to the Houston West Energy Corridor in 4th quarter 2016 and 1st quarter 2017, adding 4,000 employees to the area. GEICO’s new Houston Claims Center, located in Katy, has hired over 700 people and will employ 1,500 people in the coming years. FedEx has a distribution Facility opening in early 2017 in far North Katy. Illinois Tool Works is relocating to the Energy corridor in early 2017 adding 1,000 jobs to the market. Retail expansion is explosive with the amount of shopping and restaurants coming to the area which creates business from opening teams and ongoing training locations. Typhoon Texas opened in summer 2016 to larger crowds than expected the first year and expect even more attendance next summer.

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Holiday Inn Express & Suites Houston East

  • Well Performing Asset. The hotel is a recently constructed, 91-room premium branded IHG Holiday Inn Express & Suites located in the booming petrochemical market of Baytown in Houston, Texas. Since opening in April 2014, the hotel has had an impressive ramp-up, currently performing at 124.2% RevPAR penetration index from the STR report on the trailing 12 months ending December 2016.
  • Assumable Debt. The hotel is current encumbered by an assumable CMBS loan at attractive terms with just over seven and a half years remaining on the term. The interest rate is fixed at 4.78%, which presents an ideal rate considering what is available in the marketplace today.
  • Change of Ownership PIP. The change of ownership PIP for the buyer is estimated at $500,000 or $5,494 per room, given that the hotel is newly constructed and will not need to comply with full Formula Blue requirements for approximately another five to seven years.
  • Resilient Market. The Baytown submarket of Houston has remained resilient despite the downturn in oil prices. While certain markets within Houston have experienced a 10 – 15% decline in RevPAR in 2015, Baytown experienced a 10% increase in RevPAR.
  • Demand Generators. Baytown has the largest petrochemical industry in the United States. Petrochemical facilities in the area are adding capacity, hiring approximately 35,000 employees, to take advantage of the opportunity afforded by new technologies such as fracking. Low gas prices are driving much of this new construction. Chevron Phillips is currently building a new $2.5 billion ethane cracker plant in Baytown to produce more ethylene, which is the primary building block of most plastics. Baytown is also home to TGS Cedar Port Industrial park which houses large manufacturing/storage facilities for large employers including: National Oil Well Varco, Home Depot, Ikea, Siemens, IPSCO, General Electric, Wal-Mart, and JSW Steel USA.

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Former Best Western near Houston

  • The Former Best Western Inn & Suites is located on US-59/I-69 in Livingston TX, Located 73 miles from Downtown Houston, just outside the Houston, TX MSA.
  • Opportunity to purchase an interior corridor , three-story, asset, built in 2008, with multiple conversion opportunities with Choice International, Wyndham, and Best Western (contact broker for more details)
  • The hotel is currently priced below replacement cost at $52,500 per room.
  • The hotel has a 3-bedroom/4-bathroom owner's apartment on site, making this ideal for an owner operator.
  • The hotel is located along Interstate 69 (I-69) the interstate is also known as the NAFTA "Superhighway" because it the trade route used to travel between Mexico, the United States, and Canada.

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Holiday Inn Downtown

  • Unmatched Location. The Holiday Inn’s superior location in the Houston CBD and Midtown allows the hotel’s guests easy access to Texas Medical Center, NRG Stadium and the George R. Brown Convention Center as well as offices of Exxon Mobil, Chevron, Deloitte, Accenture, Baker Hughes, Pricewaterhouse Coopers, KBR (a Fortune 500 engineering firm), JP Morgan Chase, Oracle and AIG to name just a few.
  • Fully Renovated. The hotel was originally opened as the iconic Savoy Hotel but sat empty for the last two decades. The hotel was purchased in 2013 for a multi-million dollar complete renovation. With its recent opening in January 2016, the property debuted a modern look that will draw corporate guests, as well as amenities that will draw families. Additionally, the restaurant’s current design and operations allow it to be profitable; it is currently on track to achieve $1 million in revenue this year.
  • Value-Add Opportunity. The offering includes the fee-simple interest in the three separate parcels: the hotel, the five-story parking garage, and 7,205 sq. ft. of developable land. It is expected that a future owner could either hold the land while the garage and hotel provide cash flow or take the opportunity to build towers on both the garage and the land to the highest and best use. As the price of oil recovers, further developments on the lots will only create additional demand for the parking garage, restaurant and hotel.
  • Underperforming Asset. Opened in January 2016, the hotel is slowly ramping up - significantly underperforming the comp. set with a 40% RevPAR penetration index on 2016 year-to-date numbers from the September 2016 monthly STR report. The hotel is operating at a $43 RevPAR, while the comp. set is operating at a $109 average RevPAR. This offering presents an excellent opportunity for an astute full-service hotel operator to turn-around operations and increase cash flow.
  • Strong Cash Flow Projections. The hotel is projected to finish year two at 63.8% occupancy and an ADR of $155.87, and flow through to a Net Operating Income (NOI) of $3.2 million. As the Holiday Inn finishes ramping up and securing corporate negotiated rates, it is expected to stabilize at 66.5% occupancy in year three, with an ADR growth to $158.99 and finishing with a $3.5-million NOI.

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La Quinta Inn & Suites

  • Strong In-Place Cash-Flow. The hotel has a strong cash-flow, currently performing at $560,856 net operating income based on Jan 2017 trailing twelve months pro forma. Additionally, the hotel has an average net operating income of $645,090 over the last three years, showing that it is a stabilized asset.
  • Recently Renovated. Current ownership completed an extensive PIP over the past year in excess of $280,000 with upgrades to the exterior, common areas/corridors and guestroom bedding.
  • Resilient Submarket. Bay City has a growing industrial base and strong agriculture base of business, keeping the market resilient despite the downturn in oil prices. The major industrial plants in the area bring in hundreds of contract employees during planned outages, shutdowns or expansions; which fuels hotel room demand.
  • Robust Returns. The hotel is attractively priced at 3.27 RRM and 11.93% CAP rate based on January 2017 trailing twelve months pro forma. Assuming a 75% LTV SBA 7(a), the hotel currently generates a $307,374 cash-flow after debt service, which is a 26.16% return on investment.
  • Long-term Franchise License Agreement. There are twelve years remaining on the existing franchise license agreement and based on feedback from La Quinta, the buyer can apply for a fifteen to twenty year franchise license agreement and the transfer fee is a modest $2,500.

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Data for Decisions: Texas Hotel Revenues and REVPAR Statistics – Visualize Trends by Hotel, City, Zip Code and Franchise.

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