Absentee-Owned Asset with Operational Upside for Hands-On Owner/Operator

• Since acquiring the property in 2021, the hotel has averaged $1,551,283 in annual rooms revenue, with 2024 finishing at $1,563,812.

• During this ownership period, the hotel has generated an average gross operating profit (GOP) margin of 33.5%, with net operating income (NOI) flow-through averaging 22.6%.

• Currently absentee owned, a more hands-on operator focused on active revenue management and operational oversight would be able to enhance performance and drive bottom-line growth.

Formula Blue PIP Completed; Minimal PIP Cost Expected for Incoming Buyer

• In 2021/2022, ownership spent approximately $1,300,000, or $15,000 per key, to complete the Formula Blue property improvement plan (PIP). A full breakdown of the completed PIP package has been uploaded to the virtual deal room (VDR). As a result, we anticipate the change-of-ownership PIP to be minor.

Discount to Replacement Cost with Limited Capital Exposure

• Based on current pricing guidance, the hotel asset can be acquired at an attractive discount to replacement cost at $90,000 per key, presenting a low basis and limited near-term capital exposure for a new investor.

Attractive Rooms Revenue Multiplier (RRM) of 3.48x

• Based on the hotel’s 2024 rooms revenue of $1,560,000 (rounded), the deal underwrites to a competitive 3.48x RRM, particularly compelling when given the minor PIP expected.

Strategic East Texas Location with Energy Sector Demand Drivers

• Center, Texas, located within a three-hour drive from both Dallas and Houston, benefits from regional economic support driven by the energy and O&G industries; major operators in the area include Aethon Energy, BPX Operating Company, and XTO Energy.

• Shelby County reported production of 281 barrels of oil and 326,314 MCF (thousand cubic feet) of natural gas in November 2024, reinforcing the area’s role in East Texas’ energy landscape and ongoing demand from traveling contractors and crews.

Limited Competition & Strong Brand Positioning

• The hotel is one of only three upper-midscale hotels in the Center, Texas, lodging market, alongside the Hampton Inn & Suites and Best Western Plus.

• Newly built hotel supply in the area is limited, with the last hotel development having been constructed in 2012.

• The hotel benefits from its strong competitive positioning given the market’s limited brand saturation and the consistent demand driven by the InterContinental Hotels Group (IHG) affiliation, including its participation in the loyalty program.

Long-Term Franchise Agreement with IHG

• Upon completion of the change-of-ownership PIP, an investor can expect a new long-term franchise license agreement with IHG, enhancing long-term brand security.

• The award-winning IHG® Rewards Club 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 Club is an effective tool for driving customers to IHG hotels and creating brand loyalty.