Chapter 11 Bankruptcy Sale

• The hotel asset is being offered as part of a Chapter 11 bankruptcy process, allowing a qualified buyer to acquire it free and clear of liens and encumbrances, subject to bankruptcy court approval.

Desirable Location in High-Barriers-to-Entry Submarket

• The Texas Medical Center (TMC) and NRG Park area is a densely developed and highly sought-after submarket due to high land costs and limited franchise options.

• The property is centrally located within this neighborhood, just minutes from the TMC and adjacent to NRG Park, home to the NFL’s Houston Texans.

Ideal Opportunity for an Experienced Owner/Operator

• The 55-key count is considered an ideal size for an experienced owner/operator, offering the ability to restructure the hotel’s operations to boost net operating income (NOI) flow-through.

Absentee Owner with High Operating Expenses

• Over the last three years, the hotel registered an average gross operating profit (GOP) of less than 30.0%.

• Based on a selection of similar economy-branded, limited-service operating statements, the hotel should achieve a stabilized GOP margin between 45.0% and 50.0%.

Consistent Revenue History: $1.65 Million

• Over the last three years, the hotel recorded a stable revenue average of $1,650,000 (rounded) annually, reflecting the presence of steady market demand.

Trailing Twelve Months Rooms Revenue: $1.7 Million

• For the trailing-twelve-month (TTM) period through March 2025, the hotel’s rooms revenue amounted to $1,700,000 (rounded).

Value-Add Potential Through PIP Completion

• Per the March 2025 STR data, the hotel ranked fourth out of five competitive hotels in terms of both ADR and RevPAR, underscoring strong potential for rate growth.

• After completing the change-of-ownership property improvement plan (PIP), an investor will have a newly renovated product and the ability to increase room rates to outperform the other hotels in the competitive set.

Located near the Texas Medical Center (TMC)

• The property is strategically located within the TMC neighborhood, proximate to numerous dining, retail, and entertainment options—a positive attribute for both business and transient guests.

• The TMC is the largest medical complex in the world. There are over 54 medicine-related institutions, including 21 hospitals, 8 specialty institutions, 8 academic and research institutions, 4 medical schools, 7 nursing schools, 3 public health organizations, 2 pharmacy schools, and a dental school. Encompassing 1,345 total acres and producing $25 billion in GDP, the TMC ranks as the eighth-largest business district in the United States. Key highlights related to the economic impact of the TMC include the following:

  • 180,000+ annual surgeries

  • 750,000 ER visits per year

  • 9,200 patient beds

  • 25,000+ babies delivered per year

  • 13,600+ heart surgeries

• Additionally, over $3 billion in construction projects are currently in the works here, including the University of Texas MD Anderson Cancer Center research facility, UTHealth Houston School of Public Health Campus, Memorial Herman Hospital Expansion, and the recently announced Texas Children’s Cancer Care Hospital expansion.

NRG Park

• The property is located directly adjacent to NRG Park.

• NRG Park is a versatile tradeshow, consumer show, convention, and sports/entertainment complex, with the following attributes:

  • The uniqueness of NRG Park is apparent in the flexibility of its facilities, each offering the opportunity to host large exhibitions, concerts, sporting events, conventions, and meetings.

  • NRG Stadium is the only rodeo and NFL indoor/outdoor, retractable-roof stadium that can be configured to utilize a 125,000-square-foot space for general sessions, catered functions, exhibits, and concerts.

  • NRG Center offers over 706,000 square feet of contiguous single-level exhibit space that is divisible into 11 separate halls, 59 meeting rooms (configurable into over 100 variations), 2 major conference centers, 118 loading bays, 150,000+ square feet of registration space, and a 280,000-square-foot marshalling area.

Well Below Replacement Cost at $121,000 per Key

• This opportunity presents an investor the ability to acquire the property at a price well below replacement cost at $121,000 (rounded) per key.

• An investor can expect a new, 20-year franchise license agreement with Choice Hotels upon completion of the brand-mandated change-of-ownership PIP.

• The PIP report has been ordered and will be posted to the virtual deal room (VDR) upon receipt.

• To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $150,000 per key. The higher costs are due to the scarcity of available land in this submarket.

• Based on recent land sales, the land alone is valued between $30,000 and $50,000 per key.

Management Availability

• 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 operator.