Galveston, TX Marriott Two-Pack

9550 Seawall Boulevard, 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 both the 88-key TownePlace Suites by Marriott and the 85-key Courtyard by Marriott. The lender-owned properties must be acquired as a portfolio. The two properties are located next to one another and have a highly coveted location along the Galveston Seawall. A new investor will have the opportunity to realize the significant upside of acquiring and renovating two premium-branded assets in a historically robust market, substantially below replacement cost.

Galveston, TX

Submarket

Value-add

Investment Type

173

Keys

2013

Year Built

$124.00

Average Daily Rate

66.0%

Occupancy

$82.00

RevPAR

$5,146,075

Room Revenue

$721,027

Net Operating Income

15 Years

Expected Franchise Term

Financials as of Year-End 2019

TRANSACTION TIMELINE

We will be hosting property tours during the below dates. If you are interested in touring, please contact James Rebullida at jrebullida@hvs.com or +1 (713) 955-5580 to book an appointment. All buyers will be required to tour the hotels prior to submitting an offer. 

  • Wednesday, May 5, 2021, and Thursday, May 6, 2021
  • Wednesday, May 12, 2021 and Thursday, May 13, 2021

The call-for-offer deadline is scheduled for Thursday, May 20, 2021,and we will release details soon about the offer requirements. After the initial offer deadline, the top buyers will be invited to submit a second offer in the form of a seller approved purchase & sale agreement (PSA). The PSA will be distributed to the top buyers after the initial offer deadline. All offers will be evaluated and accepted or rejected at the discretion of the seller. 

INVESTMENT HIGHLIGHTS

LENDER-OWNED (REO) ASSETS

  • Ownership was transferred to the lender in January 2021.

SIGNIFICANT UPSIDE FOR A ROBUST OPERATOR

  • In the past two years, the hotels suffered from a lack managerial attention resulting in employee retention issues, out-oforder rooms (from general maintenance), and low guest satisfaction scores. Collectively, these issues contributed to the decline in revenues.

  • Per the December 2020 trailing-twelve-month (TTM) STR Trend Reports, the Courtyard ranked second (out of six competitive hotels) in terms of occupancy, ranking second in terms of average rate (ADR). The TownePlace Suites ranked first (out of six competitive hotels) in occupancy, while ranking fourth in ADR.

  • The portfolio offers operational efficiencies of key property-level functions including a shared General Manager, Director of Sales, Sales Coordinator, and a Chief Engineer, allowing for reduced payroll costs and higher NOI flow-through. In 2020, the TownePlace Suites’ top 125 accounts only accounted for 30% of rooms revenue. With its extended-stay model and brand affiliation, there is opportunity for new management to target long-term contracts and improve revenues.

  • Upon completion of renovations, new ownership will be able to recapture the hotels’ competitive advantage by offering a refurbished product, implementing aggressive sales tactics, increasing room rates, and improving guest satisfaction scores.

ROBUST RECOVERY FOR DRIVE-TO LEISURE MARKETS

  • Given recent developments and wide distribution of the COVID-19 vaccine, hospitality industry reports indicate that domestic drive-to leisure markets are expected to rebound sooner and stronger than other segments, driven by 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.

WORLD-CLASS BRAND AFFILIATIONS AND DISTRIBUTION PLATFORM

  • Upon completion of the brand mandated change-of-ownership PIPs, an investor can expect new, 15-year license agreements with Marriott.

  • The Courtyard brand is Marriott’s largest brand by distribution and has a great reputation in the industry. Per Marriott, the brand has a legacy of impressive performance that includes consistent delivery of high returns and solid RevPAR to owners. Courtyard owners also benefit from Marriott’s robust demand generation engine that drives top-line revenue while maximizing bottom-line savings.

  • TownePlace Suites by Marriott represents one of Marriott’s extended-stay brands, targeted at business travelers who want to feel at home and stay productive. The brand’s extended-stay orientation helps to drive occupancy levels and reduce the team member-to-guest ratio, which results in lower operating costs and some of the highest profit margins in the industry. Owning TownePlace Suites by Marriott hotels offers compelling economics and strong RevPAR performance. The average RevPAR index for the brand is 110.2% nationally.

  • The award-winning Marriott loyalty program, known as Bonvoy, is one of the largest in the hotel industry, offering members access to more than 6,700 hotels across 29 brands. Serving nearly 100 million enrolled members worldwide, it is an effective tool for driving customers to Marriott hotels and creating brand loyalty.

Excellent Location Among Strong Corporate and Leisure Demand Generators

  • The properties benefit from very good visibility off the frontage along 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 the seawall.  

  • Available dining options nearby include Gaido’s Seafood Restaurant, Jimmy’s on the Pier, Salsas Mexican Restaurant, and Galveston Island Brewing

  • Corporate demand generators in the area include 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 this spring.

Management Availability

  • The properties are being offered free and clear of any management encumbrances, providing an investor with the flexibility to revamp the operational strategies of the hotels.

COURTYARD

Image

Property Details​​​​​​​​​​​​​​​​​​​​​

  • Address: 9550 Seawall Boulevard, Galveston, Texas 77554
  • Submarket: Galveston and Texas City, Texas
  • Food & Beverage: The Bistro (restaurant) and The Market (market pantry)
  • Meeting Space: 1,177 Square Feet
  • Stories: Four
  • Foundation/Substructure: Concrete Structural Slab, Grade Beams and Pilings
  • Superstructure: Wood Framing
  • Exterior Walls: EIFS
  • Interior Walls: Sheetrock & Decorative Millwork
  • Roofing: Low Slope with Rubber Membrane Covering
  • Elevators: Two
  • Lot Size: 209,088 Square Feet (4.80 acres)
  • Parcel Number: 533300000001000
  • Management: Unencumbered
  • Brand: Courtyard by Marriott
  • Franchise: Marriott International, Inc.
  • Ownership Interest: Fee Simple
Image

Hotel Amenities

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

Guestroom Amenities

  • Complimentary Wi-Fi and Wired Internet in Rooms
  • Premium Bedding
  • Mini-Refrigerator
  • Coffeemaker 
  • Flat-screen Televisions 
  • Work Desk with Ergonomic Office Chair 
  • Iron and Ironing Board
  • Sofa 
Image

Guestroom Summary

King

60

Double Queen

22

Double Queen Suite

3

Total

85

TOWNEPLACE SUITES

Image

Property Details​​​​​​​​​​​​​​​​​​​​​

  • Address: 9540 Seawall Boulevard, Galveston, Texas 77554
  • Submarket: Galveston and Texas City, Texas
  • Food & Beverage: Breakfast Dining Area (complimentary breakfast) & Market Pantry
  • Meeting Space: None
  • Stories: Three
  • Foundation/Substructure: Concrete Structural Slab, Grade Beams and Pilings
  • Superstructure: Wood Framing
  • Exterior Walls: EIFS
  • Interior Walls: Sheetrock & Decorative Millwork
  • Roofing: Low Slope with Rubber Membrane Covering
  • Elevators: Two
  • Lot Size: 209,088 Square Feet (4.80 acres)
  • Parcel Number: 533300000001000
  • Management: Unencumbered
  • Brand: TownePlace Suites by Marriott
  • Franchise: Marriott International, Inc.
  • Ownership Interest: Fee Simple
Image

Hotel Amenities

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

Guestroom Amenities

  • Complimentary Wi-Fi and Wired Internet in Rooms
  • Premium Bedding
  • Mini-Refrigerator
  • Coffeemaker 
  • Flat-screen Televisions 
  • Work Desk with Ergonomic Office Chair 
  • Iron and Ironing Board
  • Sofa 
Image

Guestroom Summary

King Suite

63

Two-Bedroom Suite

14

Double Queen Suite

11

Total

88

MAP

CONTACT US

Investment Sales Contacts

Eric Guerrero

Managing Director and Head, 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