Operational Upside for a New Operator

• Based on the trailing-twelve-month (TTM) financial statement ending in July 2024, the hotel achieved 27.0% (rounded) in gross operating profit (GOP) and a net operating income (NOI) flow-through of 7.9%. Thus, this is an ideal opportunity for a more aggressive operator to improve operations and increase NOI flow-through.

• Based on a selection of operating statements from similar vintage Hilton Garden Inn hotels, the hotel should achieve a stabilized GOP margin between 42.0% and 48.0%. We see multiple opportunities for improvement that could lead to a collective decrease in rooms expense, specifically in the payroll department.

• Per the August 2024 monthly STR report, the hotel ranked last (out of six) and third among its competitors in terms of occupancy and average daily rate (ADR) for the TTM period ending in July 2024, registering a 80.9% RevPAR penetration index. This presents upside for a more prudent operator to recapture demand from corporate travelers and transition the hotel into becoming a market leader.

• If the hotel were to capture its fair share of market demand, at a RevPAR index of 100.0%, it would be generating in excess of $2.6 million in rooms revenue.

• Based upon HVS’s pro-forma projections, stabilized rooms revenue in 2026/27 (Year 2) is anticipated to be in excess of $2.5 million, with an NOI flow-through of $800,000 (rounded).

Increasing Topline Revenue Trend

• The hotel’s rooms revenue for the TTM period ending in August 2024 equated to $2,250,000 (rounded)—a 16.1% increase compared to last year.

• Per the August 2024 monthly STR report, year-to-date demand for the hotel has increased 11.6%, compared to the same period last year.

High-Quality Physical Product Priced Below Replacement Cost at $85,000 per Key

• This opportunity presents an investor the ability to acquire the property at a price well below replacement cost at 85,000 per key.

• The hotel opened in 2016, and ownership has maintained the physical asset well.

• To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $150,000 to $180,000 per key.

Change-of-Onwership PIP 

• The change-of-ownership property improvement plan (PIP) report can be found in the virtual deal room (VDR).

Highly Sought-After Hilton Franchise

• An investor can expect a new, long-term, 15-year franchise agreement with Hilton.

• The Hilton Garden Inn franchise is an industry-proven brand with a strong reputation among corporate travelers. Per Hilton, the brand is able to drive a higher ADR than its competitors due to its leading food and beverage offerings and modern amenities, which result in improved profitability.

• An investor will benefit from operating a franchise of one of the world’s leading global hospitality companies. Every Hilton-branded property benefits from a 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. Specifically for the Hilton Garden Inn brand, 65.0% of guests are Hilton Honors members.

Attractive Seller Financing Available 

A seller financing package with attractive terms is available for a qualified buyer. Please see the terms below and reach out to the deal team for more details. 

• Loan-to-Value (LTV): 65.0%
• Fixed Interest Rate: 8.0%
• Payments: Interest only
• Term: 3 years
• Personal Guarantee: None, non-recourse loan

Excellent Location Along I-45 Among Demand Generators

• The property is located near multiple corporate demand generators in the area, including the growing City Place (formerly known as Springwoods Village) mixed-use development, Exxon, HP, Baker Hughes, Halliburton, HCA Houston Healthcare Northwest, CEVA Logistics, Richey Business Park, Oil Center Business Park, Schlumberger, ALL STOP! Survival & Safety Training, Vallourec Tube-Alloy Houston, Gulf State Toyota, and MiTek.

• Nearby leisure attractions in the area include The Woodlands Mall, Champions Golf Club, The Woodlands Market Street, Hurricane Harbor Splashtown, Sam Houston Raceway, Mercer Arboretum & Botanic Gardens, and Ashton Gardens North Houston (wedding venue).

• The property is also located ten miles from George Bush Intercontinental Airport (IAH), which is convenient for both business and leisure travelers.

Management Availability

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