All buyers will be required to tour the hotel prior to submitting an offer. We will be hosting property tours on the dates noted below. If you are interested in touring, please contact Eric Guerrero at eguerrero@hvs.com, or +1 (713) 955-0012, or Emil Iskandar at eiskandar@hvs.com, or +1 (720) 231-3927, to book an appointment.

• Wednesday, June 28, 2023, and Thursday, June 29, 2023 

The call-for-offer deadline is scheduled for Thursday, July 13, 2023; we will release details about the offer requirements soon. After the initial offer deadline, the top buyers will be invited to submit a second offer in a best and final round. All offers will be evaluated and accepted or rejected at the discretion of the seller.

Excellent Location Among a Diverse Mix of Demand Generators

• The property is favorably located on the northern end of Petaluma, just off the Redwood Highway exit along U.S. Highway 101.

• For business and leisure travelers alike, the property’s location provides easy access to Downtown Petaluma, numerous business parks, world-renowned vineyards, and state parks. By car, the property is approximately ten minutes from Downtown Petaluma, 35 minutes from Bodega Bay, and one hour from San Francisco.

• The hotel benefits from a healthy mix of demand, with leisure travelers visiting the Sonoma wine country and the coastal communities to the west and transient demand from motorists along U.S. Highway 101 and visitors to the many businesses located within the vicinity.

• Major leisure demand generators in the area include the numerous wineries nearby, various world-class restaurants, the Russian River, Bodega Bay, Sonoma Raceway, top-notch golf courses, museums, champagne cellars, and activities such as tours and whale watching.

• Major businesses and entities include Sonoma State University, Petaluma Valley Hospital, Labcon North America Distribution Facility, and Enphase Energy.

• Petaluma is located within the greater San Francisco Bay Area, home to 7.75 million residents, and an hour’s drive from both San Francisco International Airport and Oakland International Airport, which welcomed a combined total of 53.3 million passengers in 2022. Additionally, the Charles M. Schultz – Sonoma County Airport is located a short drive to the north.

Onsite Living Quarters

• The property includes a manager’s apartment with a fully equipped kitchen and a bathroom, located above the lobby, which would be ideal for a “hands-on” future owner/operator.

Operational Upside After Renovation

• The hotel’s trailing-twelve-month (TTM) rooms revenue equated to $3,421,000 (rounded) as of March 2023, reflecting a 13.7% increase compared to the same period ending March 2022. In comparison, the Santa Rosa Sonoma, California, submarket registered a 3.0% TTM revenue increase as of March 2023.

• The increase in top-line revenue has been largely driven by the return of commercial and leisure demand in the market.

• The hotel’s 2019 performance reflects a top-line room revenue of $4,201,000 (rounded), indicating a tremendous amount of room for future growth.

• There is significant upside for new ownership. After completing the change-of-ownership PIP, an investor will have a newly updated, limited‐service hotel and the ability to increase RevPAR by implementing more focused revenue-management tactics to increase both top-line revenue and bottom-line EBITDA.

• The openings of new hotels in this market in recent years, including the Hampton by Hilton, Home2 Suites by Hilton, and Hotel Petaluma - Tapestry Collection by Hilton, should continue to support upward momentum in market-wide ADR.

Strong-Performing Market

• For the trailing-twelve-month (TTM) period through March 2023, the competitive set’s RevPAR continued to demonstrate robust recovery, increasing by 6.4% to $89, compared to the same period ending in March 2022. The growth was primarily driven by a healthy increase in market-wide ADR. For comparison, RevPAR during the peak years of 2018 and 2019 was between $89 and $103.

• Rising travel costs have pushed travelers to visit nearby drive-to leisure destinations, such as Sonoma County, which has been able to capture a greater proportion of demand from Californians.

• With long summers and mild winters, Sonoma County hosts events and festivals throughout the calendar year, driving strong and continuous demand to this region.

Unencumbered Opportunity

• The asset can be acquired fully unencumbered of the franchise affiliation, giving an investor the opportunity to either reposition the hotel into a different hotel class or to convert the property to an alternative use.

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

• The property has been well maintained by current ownership; thus, the change-of-ownership PIP is expected to be modest.