Comfort Suites Galveston

3606 89th Street, Galveston, TX 77554, US

Execute Confidentiality Agreement

THE OFFERING

HVS, as the sole and exclusive advisory firm to ownership, is pleased to present the opportunity to acquire the 57-key Comfort Suites GalvestonA new investor will have the opportunity to realize the significant upside of acquiring a recently renovated asset in a historically robust leisure market, substantially below replacement cost.

Galveston

Submarket

Value-add

Investment Type

$6,000,000

Pricing Guidance

57

Keys

2007

Year Built

INVESTMENT HIGHLIGHTS

Underperforming Asset with Upside

  • Per the August 2021 STR Report, the Hotel registered fifth out of six competitive hotels in terms of occupancy among its competitions, with an 82.5% penetration index, registering the second-lowest RevPAR amongst its competitors. Given the midscale brand affiliation and recently renovated product, there is room to increase occupancy and average rate (ADR).

  • Going forward, the Hotel is well positioned to recapture demand that was absent because of the COVID-19 pandemic, allowing it to transition to one of the local market leaders.

Discount to Replacement Cost

  • This opportunity presents an investor the ability to acquire the Property at a price well below replacement cost. Given the recent renovations, a minimal change-of-ownership PIP is expected.

  • To construct a similar asset with comparable amenities, the estimated all-in investment would be a minimum of $125,000 per key. The higher costs are due to the scarcity of available land along Seawall Boulevard.  

Robust Recovery for Drive-To Leisure Markets

  • Given recent developments and wide distribution of the COVID-19 vaccines, hospitality industry reports indicate that domestic drive-to leisure markets are expected to rebound sooner and stronger than other segments, driven by relatively low gas prices, continued concerns with air-travel safety, and uncertainties related to international quarantine protocols.

  • In a typical year, there are over 80 year-round festivals, special events, sporting events, and gatherings held in Galveston, in addition to the strong demand generated during the spring and summer months.

  • Based on the August 2021 STR Report, year-to-date room-night demand for the competitive market and the hotel increased 32.6% and 47.5%, respectively.

Choice Hotels International Franchise

  • Upon brand approval, an investor can expect a new, 20-year franchise license agreement with Choice Hotels International.

  • In 2019, the Comfort brand received a $2.5-billion strategic investment directed toward complete redesign, marketing, and brand awareness. Comfort is Choice International’s most prominent brand, with exposure to over 36 million Choice Privileges® Rewards members.

Excellent Location Among Strong Corporate and Leisure Demand Generators

  • The Property benefits from very good visibility on the Galveston Seawall, near numerous dining, retail, and entertainment options, which is a positive attribute for both business and transient guests. Guests can easily walk across the street to access the many beaches along Seawall Boulevard.  

  • Corporate demand generators in the area include the University of Texas Medical Branch (UTMB), Galveston College, Texas A&M University, Landry’s, Moody Gardens, Moody Bank, ANICO, Mitchell Family Companies, Marathon Petroleum, and Valero.

  • Leisure demand generators in the area include Moody Gardens, Schlitterbahn Water Park & Resort, Pleasure Pier, 61st Street Fishing Pier, Galveston Island Convention Center, and the historic Downtown Galveston.

  • The Port of Galveston is ranked fourth out of the busiest cruise ports in North America. In 2019, the cruise-ship industry had a record year; over one million passengers traveled through the Port, generating an economic impact of $2.1 billion. Although 2020 was a challenging year due to the pandemic, the cruise-ship industry is expected to recover, as evidenced by Disney Cruise Line recently executing a ten-year agreement to double its departures from Galveston, and Royal Caribbean scheduling to break ground on a new, $100-million terminal in 2021.

PROPERTY OVERVIEW

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Property Details

  • Address: 3606 89th Street, Galveston, Texas 77554
  • Submarket/Tract: Galveston and Texas City, Texas
  • Food & Beverage: Breakfast Dining Area (complimentary breakfast)
  • Meeting Space: 720 Square Feet
  • Year Opened: 2007
  • Stories: Three
  • Structure: Wood Frame
  • Foundation: Concrete Slab
  • Exterior Walls: EIFS & Brick
  • Interior Walls: Sheetrock & Decorative Millwork
  • Roofing: Pitched Shingle
  • Elevators: One
  • Lot Size: 78,105 Square Feet (1.79 acres)
  • Parcel Number: 243300000001000
  • Management: Unencumbered
  • Brand: Comfort Suites
  • Franchise: Choice International Hotels
  • Ownership Interest: Fee Simple
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Hotel Amenities

  • Fitness Room
  • Outdoor Swimming Pool
  • Lobby Workstation
  • Guest Laundry Facility
  • Daily Housekeeping Service
  • Self Parking
  • 24-hour Common Area in the Lobby

Guestroom Amenities

  • Complimentary Wi-Fi
  • Premium Bedding
  • Mini Refrigerator
  • Microwave
  • Coffeemaker 
  • Flat-screen Televisions 
  • Work Desk with Ergonomic Office Chair 
  • Iron and Ironing Board
  • Sofa 
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Guestroom Summary

Double Queen23
Double Queen (Balcony)8
King14
King (Balcony)12
Total57

MAP

CONTACT US

Investment Sales Contacts

Eric Guerrero

Managing Director, Brokerage & Advisory
HVS
Houston
+1 (713) 955-0012
eguerrero@hvs.com

James Rebullida

Senior Associate, Brokerage & Advisory
HVS
Houston
+1 (713) 955-5580
jrebullida@hvs.com

Fadi Rawashdeh

Senior Financial Analyst, Brokerage & Advisory
HVS
Houston
+1 (713) 955-0013
frawashdeh@hvs.com

Capital Markets Contact

Emil Iskandar

Senior Vice President, Capital Markets
HVS
Los Angeles
+1 (720) 231-3927
eiskandar@hvs.com