Highly Desirable Home2 Suites by Hilton Extended-Stay Hotel Development Opportunity

• It is rare to find a Home2 Suites by Hilton development opportunity, especially in the high-entry-to-barriers Central Texas market.

• The Home2 Suites by Hilton brand has a strong reputation in the industry with both private and institutional investors; moreover, extended-stay hotels are highly desirable assets to own and have proven their resilience during downturns.

• Upon development and approval, an investor can expect a new, long-term, 20-year franchise agreement with Hilton.

• The Home2 Suites by Hilton is one of the fastest growing brands in the industry. The modern-style, all-suite, midscale brand targets the sophisticated, value-conscious, extended-stay segment. The all-suite design promotes guest independence, which allows for lower housekeeping costs and higher profits.

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

 Strong Market Fundamentals and Limited Midscale Extended-Stay Supply 

• Aside from the 85-key, 2019-construction TownePlace Suites by Marriott located nearby, there is a shortage of newer construction, premium-branded, extended-stay hotels in the local submarket.

• Per the STR Trend Report, the competitive submarket, consisting of four midscale to upper-midscale limited-service and one extended-stay hotels, achieved occupancy and average daily rate (ADR) levels of 66.7% and $105.24, respectively, resulting in $70.93 RevPAR for the trailing-twelve-month (TTM) period ending February 2025.

• Per occupancy tax receipts for year-end 2024, the other Home2 Suites by Hilton in Waco, located seven miles south of the property, achieved a $100 RevPAR, amounting to $3.8 million (rounded) in rooms revenue.

• Once developed, as the newest hotel in the competitive set, it will be deemed superior to its competitors in terms of quality and guestroom product given the in-room kitchenettes.

Strong Performance Expected

• Based on HVS pro-forma projections, stabilized rooms revenue is anticipated to exceed $3.9 million, with a net operating income (NOI) flow-through of over $1,495,000 (rounded), resulting in a RevPAR of over $107.

Excellent I-35 Location Among Strong Corporate & Leisure Demand Generators

• The property is strategically located near Interstate 35 (I-35), north of Loop 340.

• Commercial demand generators in the area include Mars Wrigley, L3Harris Technologies, TYMCO, Neighborly Brands, Texas State Technical College, Waco Regional Airport, Cargill, and Waco Convention Center.

• Leisure attractions include Waco Surf Water Park, Magnolia Market at the Silos, McLane Stadium, Downtown Waco, Brazos River, Cameron Park Zoo, Dr Pepper Museum, and the Texas Ranger Hall of Fame & Museum.

• Waco is home to several hospitals and medical centers, including Baylor Scott & White Medical Center, providing jobs and services to the region, while also generating lodging demand.

• Available dining options near the property include Heitmiller Steakhouse, Cracker Barrel Old Country Store, IHOP, Casa Olé, and Whataburger.

Rapidly Expanding Waco Market

• Over the past four years, there have been 37 major investment announcements, resulting in over $3.3 billion in new capital investments across the greater Waco MSA.

• These economic expansions have generated more than 4,500 new jobs and an additional 7,000 indirect jobs, driving significant growth in the region.

Texas State Technical College $72-Million Campus Expansion

• Located three miles from the property, Texas State Technical College (TSTC) is currently underway on a $72-million, 126,000-square-foot facility that will be the new home for the building construction technology; electrical construction; heating, ventilation and air-conditioning technology; plumbing and pipefitting technology; and solar energy technology programs.

• The facility is slated for completion in 2026 and will allow each program to grow by 30% to 40%. 

Baylor University

• The Waco economy is anchored by Baylor University, which occupies 1,000 acres, has a total enrollment of 20,000+ students, and operates with an annual budget of roughly $1 billion.

• Annually, the University spends nearly $62 million locally and pays $317 million in salary to full- and part-time faculty and staff.

• Several exciting expansion projects have been recently completed or are underway to enhance its campus and facilities:

  • Fudge Football Development Center: Opened in the fall of 2024, the state-of-the-art complex includes a 14,460-square-foot expansion of the adjacent Allison Indoor Practice Facility, which created a full-size field and a new front entry, lobby, second-level bridge access connecting the Fudge Center and Allison Indoor Practice Facility; new offices for the football program’s coaching staff; advanced weight-training rooms; hydrotherapy and healthcare spaces; and more. It aims to provide unparalleled resources for the football program.

  • Honors Residential College: The Memorial and Alexander Residence Halls have been renovated and connected to the Carona Family Commons, offering improved dining, study areas, and community spaces.

  • Mark & Paula Hurd Welcome Center: Located at the corner of I-35 and University Parks Drive, this center serves as a welcoming hub for students, alumni, and visitors.

  • Paul & Alejandra Foster Pavilion: Situated along the Brazos River, this pavilion enhances Baylor's home court advantage with seating for over 7,000 fans.

  • Black Gospel Archive Expansion: Baylor Libraries received a $2.48-million grant to expand the Black Gospel Archive, including new programming, exhibits, and a concert series.

Significant Upside for Developer to Exit

• The property presents an opportunity for a developer to construct an extended-stay hotel in a growing Central Texas market, with a potential attractive exit capitalization rate.

• Following construction and stabilization of operations, the hotel would be a desired investment for the comprehensive pool of regional and national investors interested in premium-branded hotel investments.