Holiday Inn Express & Suites Cleveland

600 Highway 59 South, Cleveland, TX 77327, US

Execute Confidentiality Agreement

THE OFFERING

HVS Brokerage & Advisory, as the sole and exclusive advisory firm to ownership, is pleased to present the opportunity to acquire the 68-key Holiday Inn Express & Suites Cleveland, a limited-service hotel in Cleveland, Texas, which is part of the Houston–The Woodlands–Sugar Land Metropolitan Statistical Area (MSA). Cleveland is situated about 45 miles north of Downtown Houston along Interstate 69 (I-69), a major throughfare for travelers between Houston and East Texas cities of Lufkin, Nacogdoches, and Texarkana.

Houston North/Woodlands

Submarket

Value-add

Investment Type

$7,400,000

Pricing Guidance

68

Keys

2011

Year Built

$114.50

Average Daily Rate

69.9%

Occupancy

$80.03

RevPAR

127.6%

RevPAR Penetration Index

$1,986,373

Room Revenue

15 Years

Expected Franchise Term

Financials as of Year-End;2024

PROPERTY HIGHLIGHTS

Ideal Opportunity for Experienced Owner/Operator

  • The 68-key count is considered an ideal size for an experienced owner/operator, offering new ownership a blank slate to ramp up operations post renovation and the ability to increase both revenues and NOI flow-through.

Operated by Third-Party Management Company

  • The hotel is currently operated by a third-party management company with a full staff in place. Great upside exists for a more hands-on owner/operator to restructure the hotel’s operations and implement cost controls.

  • Per the 2024 profit-and-loss (P&L) statement, the hotel registered a gross operating profit (GOP) level of 40.5%. Comparable operating statements for similar hotel assets indicate that the average GOP should be between 46.0% and 50.0%.

  • There are multiple opportunities for improvement that could lead to a collective decrease in rooms expense and administrative & general (A&G) expenses, specifically within the payroll department, allowing for stronger cash flow.

Market Leader and Increasing Demand Trend

  • Since 2021, the hotel has outperformed and consistently dominated its competitive set, having registered an annual average RevPAR penetration index of 139.1% through year-end 2024.

  • Based on the December 2024 STR report, year-end room-night demand for the submarket market and the hotel increased 12.9% and 17.5%, respectively. This trend is expected to continue as the hotel continues to ramp-up post renovation.

Over $2 Million Renovation Recently Completed

  • From 2023 to 2024, ownership spent nearly $2.1 million ($30,000 per key) to complete a property-wide renovation for the brand’s “Formula Blue 2.0” design scheme.

Resilient Ramp-Up Period Post Renovation

  • Corporate accounts were displaced during the comprehensive renovation; however, the hotel has since experienced a strong rebound in rooms revenue, achieving over $2,000,000 (rounded) in rooms revenue in 2024 and a year-over-year increase of 27.3%.

  • Based upon HVS’s pro-forma projections, stabilized rooms revenue is anticipated to surpass $2.2 million, with an NOI flow-through of $700,000 (rounded).

Well-Maintained, High-Quality Physical Product at a Discount to Replacement Cost

  • Given the recent renovation, a minimal change-of-ownership property improvement plan (PIP) would be expected upon transfer.

  • This opportunity presents an investor the ability to acquire the property at a price well below replacement cost. To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $130,000 per key.

15-Year Holiday Inn Express & Suites Franchise License Expected

  • Upon approval from the franchisor and completion of the brand-mandated change-of-ownership PIP, an investor can expect a new, 15-year license agreement with InterContinental Hotels Group (IHG).

  • The award-winning IHG Rewards loyalty program is one of the largest in the hotel industry, offering members more choices to redeem their points than any other hotel loyalty program in the world. Serving over 100 million enrolled members worldwide, IHG Rewards is an effective tool for driving customers to IHG hotels and creating brand loyalty.

BNSF Railway Developing 1,200-Acre Industrial and Business Park

  • BNSF Railway is developing the Logistics Center North Houston at Cleveland, a 1,200-acre industrial and business park in Cleveland, Texas. This facility has been designed to accommodate up to 39 companies, providing them with direct rail access to transport goods across the country.

  • Construction is currently underway, with parceled lots/spaces available to companies now.

  • Per BNSF, there has been strong interest from companies interested in establishing operations in the business park, but due to ongoing negotiations, more information should be released later this year. Reportedly, the facility is slated for completion by year-end 2025.

Excellent Location Among Strong Demand Generators

  • The property benefits from excellent visibility along the Interstate 69 frontage road, near the State Highway 105 interchange. State Highway 105 is becoming a major connector route between Interstates 45 and 69.

  • Nearby commercial demand generators include the Cleveland Civic Center, Texan Theater, and Stancil Expo Center, as well as several healthcare facilities, such as Cleveland Health Care Center and the Texas Emergency Hospital.

  • Leisure demand generators include Lake Livingston State Park, the Retreat at Artesian Lakes, Speedsportz Racing Park, Big Rivers Waterpark, and Huntsville State Park.

Fully Unencumbered by Management

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

MAP

CONTACT US

Investment Sales Contacts

Eric Guerrero

Senior Managing Director, Partner, Brokerage & Advisory
HVS
Houston
+1 (713) 955-0012
eguerrero@hvs.com

James Rebullida

Senior Vice President, Brokerage & Advisory
HVS
Houston
+1 (713) 955-5580
jrebullida@hvs.com

Capital Markets Contact

Innara Panjwani

Associate, Capital Markets
HVS
Houston
+1 (713) 955-0104
ipanjwani@hvs.com