Upside Potential for a Robust Operator

• Based on the year-end 2019 profit-and-loss (P&L) statement, the Hotel achieved a house profit of 41.3%, with an NOI flow-through of 21.9%, including 3% management fees and 4% FF&E reserves. Great upside exists for a more “hands-on” operator to restructure the Hotel’s operations, establish yield-management strategies, and initiate cost-containment initiatives to maximize RevPAR penetration and NOI flow-through.
• Per the July 2020 STR Report, the Hotel ranked fifth out of six competitive hotels in terms of occupancy, registering the second-lowest overall RevPAR among its competitors. A more prudent and hands-on operator should be able to recapture demand from corporate travelers and transition the hotel into becoming a market leader.

Discount to Replacement Cost

• This opportunity presents an investor the ability to acquire the Property at a price well below replacement cost. To construct a similar limited-service asset with comparable amenities, the estimated all-in investment would be a minimum of $110,000 to $130,000 per key.

IHG Franchise

• Upon acquisition and approval, an investor can expect a new, 20-year license agreement with IHG. The Holiday Inn Express brand is IHG’s largest and fastest-growing hotel brand in the world. The brand offers delivers a consistently fresh and innovative guest experience, meeting guests’ needs and driving value for owners.

Excellent Location Along Interstate 10 and Demand Generators

• The Property benefits from very good visibility off the frontage road along Interstate 10, proximate to numerous dining, retail, and entertainment options, which is a positive attribute for both business and transient guests.
• In November 2019, Stream Realty Partners purchased 300 acres along Interstate 10 in Brookshire with plans to develop the Empire West business park. Stream Realty Partners will complete the development in phases and intends to attract e-commerce and consumer goods distributors.

Management Availability

• The Property is being offered free and clear of any management encumbrances, providing an investor with the flexibility to revamp the operational strategies of the Hotel.