Reduced Pricing Guidance

• Ownership is motivated and has agreed to reduce the pricing guidance to $5,100,000.​​​​​​​

Ideal Opportunity for an Experienced Owner/Operator to Improve Performance and NOI Flow-Through

• The 57-key count is considered an ideal size for an experienced owner/operator.

• According to the past three years of financial statements, the hotel registered an average gross operating profit (GOP) below 30.0%.

• Based on a selection of operating statements from similarly aged Choice-affiliated hotels, the hotel should achieve a stabilized GOP margin between 45.0% and 50.0%.

• We see multiple opportunities for improvement that could lead to a collective decrease in rooms expense, specifically in the payroll department.

• Per the February 2024 STR data, the hotel came in sixth out of six competitive hotels in terms of occupancy, with a 62.8% penetration index; in addition, it recorded the lowest RevPAR among the competitive set. Given the upper-midscale brand affiliation and recently renovated product, there is flexibility for a new operator to increase occupancy and improve RevPAR.

• Based on HVS pro-forma projections, stabilized rooms revenue in 2025 is anticipated to exceed $1,550,000 ($74.00 RevPAR), with an NOI flow-through of $487,000 (rounded).

High-Barriers-to-Entry Market with Beach Access

• Galveston is a high-barriers-to-entry market due to limited developable land, limited franchise availability, strict zoning regulations, and a historic district that restricts new construction.

• The property has an irreplaceable location just off Seawall Boulevard where guests can walk to the beach and Galveston Fishing Pier.

Robust Drive-to Leisure Market of Galveston

• An investor will have an exceptional opportunity to purchase an asset strategically located within the “Texas Triangle” of Austin, Dallas, Houston, and San Antonio. There are approximately 21 million residents within a four-hour drive of Galveston.

• There are numerous festivals, special events, sporting events, and gatherings held throughout the year in Galveston, with particularly strong demand generated during the spring and summer months.

• Tourism demand in Galveston has increased in recent years along with city-wide efforts to improve local roads and infrastructure, expand the beaches, and improve the cruise-ship terminals. Per the 2023 Galveston Economic Impact of Tourism Study, completed by city officials last summer, tourist visitation reached a peak of 8.1 million visitors in 2022, a 25.0% increase from 2021 and a 10.9% increase from 2019. These visitors spent a record $1.2 billion, which directly affected the local economy.

Choice International Franchise

• An investor can expect a new, 20-year franchise license agreement with Choice Hotels International upon completion of the brand-mandated change-of-ownership PIP.

• Given the recent renovations, a minimal change-of-ownership PIP is expected.

Excellent Location Among Strong Corporate and Leisure Demand Generators

• The property benefits from very good visibility along the Galveston Seawall and from its proximity to 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 Bank, American National Insurance Company, Mitchell Historic Properties, and Marathon Petroleum.

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