Highly Desirable Candlewood Suites Extended-Stay Hotel Development Opportunity

• Upon approval and development of the Candlewood Suites, an investor can expect a new, 20-year license agreement with InterContinental Hotels Group (IHG).

• The all-suite design promotes guest independence, which yields to lower housekeeping costs and higher profits. This business model benefits an investor to operate an asset that yields high gross-operating-profit (GOP) margins and net operating income (NOI) flow-through.

• The brand’s extended-stay orientation helps to drive occupancy levels and reduce the team member-to-guest ratio, resulting in lower operating costs and some of the highest profit margins in the industry.

• With more than 100 million members, IHG gives members access to more than 6,600 hotels across 19 brands. The IHG One Rewards is an effective tool for driving customers to IHG hotels and creating brand loyalty.

 Strong Market Fundamentals, Absence of Midscale Extended-Stay Supply  

• There is a shortage of newer vintage, premium-branded, extended-stay hotels in the local submarket, which also lacks a midscale extended-stay hotel product, such as a Candlewood Suites hotel.

• Per the STR trend report, the competitive submarket—comprising four midscale to upper-midscale extended-stay and limited-service hotels—achieved an average occupancy level of 62.6%, average daily rate (ADR) of $101, and RevPAR of $63 for the trailing-twelve-month (TTM) period ending February 2025.

• According to the occupancy tax receipts for year-end 2024, the 2007-built TownePlace Suites by Marriott San Antonio Northwest, located adjacent to the property, achieved a RevPAR of $47, amounting to $2.1 million (rounded) in rooms revenue.

• Once developed, the proposed hotel will be the newest hotel in the competitive set, superior to its competitors in terms of quality and product offering, inclusive of the in-room kitchens.

• Based on HVS pro-forma projections, stabilized rooms revenue is anticipated to exceed $2.4 million, with an NOI flow-through of over $1,100,000 (rounded), resulting in a RevPAR of over $78.

Excellent I-10 Location Among Strong Corporate & Leisure Demand Generators

• The property is strategically located near the intersection of Fredericksburg and Prue Roads, just west of the Huebner Road Exit along Interstate 10 (I-10), approximately three miles from the South Texas Medical Center (STMC) and five miles from Six Flags Fiesta Texas.

• Other corporate demand generators nearby include USAA’s corporate headquarters’ campus, LabCorp, Frost Bank, Whataburger, HEB, Valero, Tesoro, and Rackspace.

• Available dining options near the property include Cracker Barrel Old Country Store; Bill Miller BBQ; Magnolia Pancake Haus; Snooze, an A.M. Eatery; and Alamo Biscuit Company & Panadería.

Significant Upside for Developer to Exit

• The offering presents a developer with an opportunity to construct a Candlewood Suites hotel in a major metropolitan area, with a potentially attractive exit capitalization rate.

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

• The offering also includes an option to develop the adjoining pad site for retail use or quick-service restaurant (QSR) construction, which would provide natural synergy for an extended-stay hotel to further increase guest retention; alternatively, an investor would have the ability to subdivide and sell off the pad site.