Strong Cash Flow, $1.12-Million NOI Flow-Through

• Per the year-end 2024 financial statement, the hotel achieved a gross operating profit (GOP) of 64.4%, leading to an impressive $1,120,000 (rounded) net operating income (NOI) flow-through.

• Based on HVS pro-forma projections, stabilized rooms revenue is anticipated to exceed $2,300,000 ($70 RevPAR), with an NOI flow-through of $1,270,000 (rounded).

Highly Desirable Economy, Extended-Stay Hotel Operation

• The Extended Stay America (ESA) brand has a strong reputation in the industry as one of the leading economy-class, extended-stay hotel products, benefitting from an efficient operating model.

• Extended-stay hotels are highly desirable assets to own and have proven their resilience during downturns.

• The all-suite design promotes guest independence, which yields to lower housekeeping costs and potentially higher profits. This business model benefits an investor, with the ability to operate a hotel asset that yields high GOP margins and NOI flow-through.

• Based on operating histories collected from HVS, ESA-branded hotel properties averaged a GOP of 53.9% from 2019 through 2023, with the year-over-year (YoY) GOP margin having increased by 7.0% in 2023.

• The ESA long-term customer base is driven primarily by guests who either cannot qualify for or afford permanent housing; thus, many guests call the hotel home. This type of property allows for a predictable cash-flow stream, similar investment to an apartment complex.

Increasing Top-Line Revenue Trend, $2.13-Million Rooms Revenue

• The hotel’s rooms revenue in 2024 equated to $2,130,000 (rounded), reflecting a 27.1% YoY increase.

• The upward trend is expected to continue this year, as rooms revenue in January increased by 18.0%, compared to the same month in 2023.

• Based on the December 2024 STR report, year-end room-night demand for the submarket market and the hotel increased 12.9% and 40.5%, respectively.

Priced at a Discount to Replacement Cost, $102,000 per Key

• This opportunity presents an investor the ability to acquire the property at a price well below replacement cost at $102,000 (rounded) per key.

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

Highly Desirable Location near The Woodlands

• The property benefits from its strategic location south of The Woodlands, a 28,000-acre, master-planned community that is situated approximately 30 miles north of Downtown Houston.

• The Woodlands is home to more than 185,000 residents and over 1,700 businesses and corporations.

• The Woodlands has solidified its reputation as one of the most desirable business hubs in the Houston metro area, with the highest office demand in the region.

• Per a report from Howard Hughes Holdings, this office submarket boasts a 90% occupancy rate, significantly outpacing Greater Houston’s level of 75%, and it continues to attract top-tier corporate tenants.

• Seven new tenants across technology, healthcare, and real estate signed leases in Q4 2024, reinforcing the area's appeal.

CityPlace Development (Formerly Springwoods Village)

• The property is located three miles from the CityPlace development, a 2,000-acre, master-planned community that features over 14 million square feet of commercial office space; 750,000 square feet of retail, dining, and entertainment options; and about 290 acres of parks and trails.

• The mixed-use development is home to ExxonMobil Corporation, the largest publicly traded integrated oil-and-gas company in the world.

• In 2015, ExxonMobil completed construction of its three-million-square-foot campus in the development. Since then, the company has consolidated 10,000 local and national employees at the new campus, having officially relocated its corporate headquarters from Dallas to the CityPlace campus in 2023.

• Additional corporations in the development include Hewlett-Packard Enterprise (HPE), ABS, Southwestern Energy, and St. Luke’s Hospital.

• In 2023, HPE also relocated its headquarters and roughly 2,200 employees to a 568,000-square-foot, two-building campus at CityPlace.

Excellent Location Along Interstate 45, Among Strong Corporate & Leisure Demand Generators

• The property is strategically located along Interstate 45 near the Rayford/Sawdust Exit, proximate to numerous dining, retail, and entertainment options.

• Available dining options nearby include SwitchHouse, Bread Zeppelin, Island Grill City Plaza Drive, and Chipotle Mexican Grill.

• Corporate demand generators in the area include Occidental Petroleum, Huntsman Corporation, Baker Hughes, Chevron Phillips Chemical Company, Halliburton, Repsol, Entergy, Tetra Technologies, Talisman Energy, Newfield Exploration, and Geo-Southern Energy, as well as numerous business parks.

• Leisure demand generators in the area include the Cynthia Mitchell-Woods Pavilion, The Woodlands Mall, W. W. Thorne Stadium, National Museum of Funeral History, and Hurricane Harbor.

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.