Palace Inn I-45 & Crosstimbers

4221 North Freeway, Houston, TX 77022, US

Execute Confidentiality Agreement

THE OFFERING

HVS Brokerage & Advisory, as the sole and exclusive advisory firm to ownership, is pleased to present the opportunity to acquire the 53-key Palace Inn Houston I-45 & Crosstimbers, an economy-branded, exterior-corridor hotel asset in Houston, Texas, approximately ten minutes north of Downtown Houston. This offering represents an opportunity for a more hands-on owner/operator to realize the significant upside of acquiring an absentee-owned, underperforming hotel asset. The property benefits from its strategic location just off Interstate 45 at the Crosstimbers Street Exit. Interstate 45 is a densely trafficked highway that serves as a main artery through Houston, extending north to Dallas and southeast to Galveston. Demand in this area comprises mainly transient and leisure travelers passing through the area or visiting nearby family/friends. Additional demand is also generated by extended-stay guests looking to take advantage of the lower weekly/monthly rates.

North Houston

Submarket

Value-add

Investment Type

$3,500,000

Pricing Guidance

53

Keys

1978

Year Built

PROPERTY HIGHLIGHTS

Ideal Opportunity for an Owner/Operator

  • It is rare to find a highly desirable Palace Inn-branded hotel for sale in Houston.

  • The property contains the following features:

    • Three apartments with two bedrooms and a fully equipped kitchen as part of the inventory

    • One apartment with one bedroom and a fully equipped kitchen as part of the inventory

    • An owner/manager's apartment with one master bedroom and two other bedrooms, along with a living room that has a direct connection to the registration area and front desk

    • Tile flooring in all guestrooms

  • The 53-key count is an ideal guestroom size for an owner/operator.

  • There is an opportunity to add nine or ten guestrooms to the property, bringing the total key count to over 60.

Opportunity to Increase Performance

  • The hotel averaged $412,000 in rooms revenue over the last four years, with an average RevPAR of $21, whereas the competitive set’s RevPAR average has been closer to $38 (rounded); thus, significant upside exists.

  • Per the trailing-twelve-month (TTM) September 2022 data, the following competitors achieved higher RevPAR amounts:

    • Crystal Inn, 39 keys: $46.31 RevPAR

    • Luxury Inn, 22 keys: $48.85 RevPAR

    • Haven Inn & Suites, 42 keys: $48.23 RevPAR

  • Based upon the HVS pro-forma projections, stabilized rooms revenue in 2025/26 is anticipated to be in excess of $700,000 ($36 RevPAR), with an NOI flow-through of $310,000 (rounded).

Excellent Location near Downtown Houston

  • The property benefits from excellent visibility and accessibility off the frontage road along Interstate 45, less than ten minutes (6.9 miles) north of Downtown Houston.

  • Based on the 2021 data from the Texas Department of Transportation (TxDOT), this section of Interstate 45 averages 225,000 vehicles daily.

  • Local establishments include a Walmart Supercenter, the Northline Transit Center/HCC light-rail station, Northline Commons (outdoor shopping mall), The Houston Farmers Market, and several fast-food options.

Fully Unencumbered of Franchise

  • The property is being offered free and clear of any franchise encumbrances, providing an investor with the flexibility to revamp operations and the ability to rebrand it, if desired.

  • The Palace Inn franchise may be retained with the completion of a change-of-ownership PIP. The seller has ordered the PIP; it will be uploaded to the virtual deal room (VDR) upon receipt.

MAP

CONTACT US

Investment Sales Contacts

Fadi Rawashdeh

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

Fadi Rawashdeh

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

James Rebullida

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

Kyle Peterek

Senior Associate, Brokerage & Advisory
HVS
Seattle
+1 (206) 259-7150
kpeterek@hvs.com

Eric Guerrero

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