Newly Constructed, High-Quality, Extended-Stay Hotel Asset, Opened March 2024

• Having opened this past March, the property is in excellent physical condition, thus allowing an investor to acquire a Hilton-branded asset without concerns of a change-of-ownership property improvement plan (PIP).

• The Home2 Suites by Hilton brand has a strong reputation in the industry with both private and institutional investors; moreover, extended-stay hotels are highly desirable assets to own and have proven their resilience during downturns.

• The property was built with exceptional construction quality; the exterior was built per the 2.3 prototype, while the interior was finished per the 3.0 prototype.

Absence of Midscale Extended-Stay Supply

• The hotel is the only premium branded, midscale, extended-stay option in the submarket, with the nearest other extended-stay hotels located over 25 miles away in Conroe, thus filling an important need in the market. Prior to the opening, the only extended-stay option in this submarket was the economy-branded Studio 6 hotel.

• As the newest lodging facility in the competitive submarket, the property is the nicest hotel option. Bolstered by its extended-stay product offering, including a kitchenette in every guestroom, the hotel is well suited to capture high-rated transient and commercial demand and should achieve its competitive market positioning quickly during the ramp-up of operations.

Strong Market Fundamentals

• The hotel is positioned to quickly ramp up performance due to the increasing demand and absence of midscale, extended-stay lodging supply in the market. For its first full month of operations, the hotel achieved rooms revenue of $226,000 (rounded), or $83.70 RevPAR, in April.

• Current ownership did not pre-market the hotel prior to opening and does not have a permanent General Manager or Sales Manager hired; considering these factors, the brand and submarket are very strong to produce the aforementioned results in the first month.

• Per the December 2023 STR Trend Report, the competitive submarket, consisting of five midscale to upper-midscale limited-service hotels, achieved occupancy and average daily rate (ADR) levels of 64.2% and $113.38, respectively, resulting in $72.81 RevPAR for year-end 2023.

• Per occupancy tax receipts for the trailing-twelve-month (TTM) period ending March 2024, the submarket leader was the 75-key Hampton Inn & Suites by Hilton (next door), which achieved a $120.70 RevPAR, amounting to $3.3 million (rounded) in rooms revenue.

• As the newest hotel in the competitive set, the property is deemed superior to its competitors in terms of quality and guestroom product given the in-room kitchenettes.

• Based on HVS pro-forma projections, stabilized rooms revenue is anticipated to exceed $4.0 million, with an NOI flow-through of over $1,800,000 (rounded), resulting in a RevPAR of over $123.00.

Sam Houston State University 

• Sam Houston State University (SHSU) in Huntsville encompasses over 300 acres, serving more than 21,000 students and employing roughly 2,400 people. The accredited university offers 90 undergraduate degrees, 60 master’s degrees, and 10 doctoral degree programs. Additionally, the school’s NCAA Division-I football team plays its home games at the 14,000-seat Bowers Stadium. Last May, the SHSU announced the approval of its ten-year Master Plan, which includes building new facilities and renovating some of the existing buildings in Huntsville.

Texas Department of Criminal Justice Prison System

• The Texas Department of Criminal Justice (TDCJ) is headquartered in Huntsville and employs over 4,300 people. Along with servicing the entire state of Texas, the TDCJ also operates the following seven prison units in Huntsville:

  • Byrd (DU): 282 total employees and 1,341 capacity

  • Ellis (E): 400 total employees and 2,073 capacity

  • Estelle (E2): 755 total employees and 3,480 capacity

  • Goree (GR): 315 total employees and 1,321 capacity

  • Holliday (NF): 435 total employees and 2,120 capacity

  • Huntsville (HV): 446 total employees and 1,705 capacity

  • Wynne (WY): 480 total employees and 2,621 capacity

Excellent Location Among Numerous Demand Generators

• The property benefits from its location along the frontage road of Interstate 45, within the Ravenwood Village Shopping Center, offering guests several dining, retail, and entertainment options.

• Notable local demand generators include the Huntsville State Park, Sam Houston National Forest, Sam Houston Memorial Museum, Texas Prison Museum, The HEARTS Veterans Museum of Texas, Huntsville Memorial Hospital, and the historic Downtown Huntsville district.

Highly Sought-After Hilton Franchise, World-Class Affiliation & Distribution Platform

• Upon acquisition and approval, an investor can expect a new, long-term franchise agreement with Hilton.

• The Home2 Suites by Hilton is one of the fastest growing brands in the industry. The modern-style, all-suite, midscale brand targets the sophisticated, value-conscious, extended-stay segment. The all-suite design promotes guest independence, which allows for lower housekeeping costs and higher profits. This business model benefits an investor in operating a hotel asset that yields high GOP margins and NOI flow-through.

• An investor will benefit from operating a franchise of one of the world’s leading global hospitality companies. Every Hilton hotel and resort benefits from the unique system of innovative solutions and advanced technologies, known as the Hilton Performance Advantage, which delivers leading-edge support to consistently drive profits and efficiencies. It is a powerful resource for owners and operators, unrivaled in the industry. Hilton Honors™ is an award-winning guest loyalty program. Its roughly 190 million members account for more than 50.0% of all room nights globally for Hilton-branded hotels.

Management Availability

• The hotel asset is being offered free and clear of any management encumbrances, providing an investor with the flexibility to either install its preferred management company or to self-operate the hotel if approved by Hilton.