Consistent Rooms Revenue Trend and Market Leader

• The hotel generated $2,380,000 (rounded) in rooms revenue in 2024.

• From 2021 through 2023, rooms revenue averaged over $2,300,000 (rounded). During the same period, the hotel maintained its status as a market leader, registering an average RevPAR penetration index of 105.8%.

• The property has been well maintained by current ownership. Despite its dated appearance, the hotel has achieved strong top-line performance, showing the strength of the local market and the onsite management team.

Operational Upside Potential for a Robust Operator

• The hotel is currently institutionally owned and operated, providing an excellent upside opportunity for a new, more aggressive owner/operator.

• Per the trailing-twelve-month (TTM) October 2024 profit-and-loss (P&L) statement, the hotel’s gross operating profit (GOP) was 35.6%, with a net operating income (NOI) flow-through of about $470,000 (rounded), assuming a 4.0% FF&E reserve for replacement. Great upside exists for a more hands-on operator to restructure the hotel’s operations to maximize NOI flow-through.

• Based on a selection of similar vintage Hampton by Hilton operating statements, the hotel should achieve a stabilized GOP margin between 44.0% and 48.0%, an approximate ten percentage-point increase over today. 

• Current ownership recently locked in a significant reduction in property insurance. The new insurance premium going forward is $95,000 (rounded), reflecting a 43.0% decrease from the $168,000 (rounded) paid in 2024.

• Per the November 2024 STR data, the hotel ranked fourth in terms of occupancy, and third in ADR, indicating market capacity to increase post-renovation rooms revenue. 

• On a proforma basis, a 10-percentage-point increase in GOP, in addition to the reduction in insurance expense would increase TTM October NOI from $470,000 to $786,000, representing a 11.6% cap rate on the purchase price, which excludes revenue growth following execution of the property improvement plan (PIP).  

Favorable Rooms Revenue Multiplier (RRM) of 2.8x

• Based on the $6,750,000 pricing guidance, the hotel asset underwrites to an attractive 2.8x RRM based on the 2024 rooms revenue.

• This pricing positions the hotel as an excellent value proposition with room for future growth and profitability.

Discount to Replacement Cost at $81,000 per Key

• This opportunity presents an investor with the ability to acquire the property at a price well below replacement cost, at $81,000 (rounded) per key. Following execution of the PIP, the all-in cost would be $106,00 to $116,000 per key.

• To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $130,000 to $150,000 per key.

Highly Sought-After Hilton Franchise (10-Year Minimum Franchise License Agreement)

• Upon acquisition and franchisee approval, an investor can expect, at a minimum, a new, 10-year franchise license agreement with Hilton.

• The Hampton by Hilton flag is a proven brand that dominates the upper-midscale segment. Franchisees benefit from Hilton’s global strength, reputation, and unrivaled Hilton Honors™ guest loyalty program.

• 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 115 million members account for more than 50.0% of all room nights globally for Hilton-branded hotels.

Property Improvement Plan (PIP)

• The change-of-ownership PIP report has been posted to the virtual deal room (VDR).

• Based on a selection of similar vintage Hampton by Hilton PIP quotes, the renovation cost estimate is $25,000 to $35,000 per key. 

• After the completion of the PIP, new ownership will have a blank slate to implement its own revenue-management strategy, with the capacity to drive ADR, occupancy, and NOI flow-through.

Ideal Location Along Interstate 20

• The property is strategically located at the Trenton Street Exit of Interstate 20/U.S. Highway 167, a highly developed thoroughfare in Ruston with excellent access and visibility.

• Ruston is the parish seat of Lincoln Parish, which had a population of 48,000 (rounded) as of the 2020 census.

• Ruston is home to both Louisiana Tech University, with 12,000 students enrolled, and Grambling State University, with 5,100 students enrolled.

• Aside from the two universities, top employers in the Ruston area include Northern Louisiana Medical Center; Green Clinic; Hunt, Guillot & Associates; Ardagh Group; and Origin Bank.

• Ruston Sports Complex, also known as the “Sports Capital of the South,” is a major demand generator locally that hosts on a regular basis. The state-of-the-art complex resides on a sprawling 185-acre site includes 36 fields, 16 turf fields, batting cages, meeting rooms, covered pavilions, a ticket office, as well as a six-acre pond, natural biodiversity reserve, and playground area.

• Additional leisure demand generators in Ruston include a thriving, 25-block, historic downtown district, the North Park Mall, the North Louisiana Military Museum, the Eddie G. Robinson Museum, and the Dixie Center for the Arts.

Major Developments Under Contstruction in Ruston 

• The highly anticipated Buc-ee's will be located off I-20 at the Tarbutton Road Exit, within a five-minute drive of the hotel property. Construction is expected to be completed by year-end 2025. This Buc-ee's will feature 120 gas pumps and is projected to create 200 local jobs. Once operational, the establishment is expected to attract 15,000 vehicles daily, driving significant economic and tourism growth in the area. 

• WestRock Paper Mill is nearing the completion of its $97-million expansion and modernization project just outside of Ruston, which will create more than 450 jobs and support roughly 3,700 indirect jobs. 

• Located approximately one mile from the property, JPMorgan Chase set to open its new, $31-million operations center in 2025. 

Meta Selects Northeast Louisiana as the Site for its $10 Billion AI-Optimized Data Center

• Meta’s $10-billion AI-Optimized Data Center project, slated for completion by 2030, is planned for development on a site less than an hour’s drive from the property. 

• Reportedly, this project will employ approximately 5,000 workers during its construction phase and create over 1,500 permanent jobs upon completion, further cementing Northeast Louisiana’s reputation as a growing hub for technology and innovation.

• With the anticipated influx of construction workers, new hires, and business visitors, as well as the expected corresponding increase in traffic along I-20, new ownership should be able to position the hotel as one of the top choices for business stays, long-term bookings, and corporate partnerships.