Distressed-Asset Opportunity

• This is a distressed asset with a highly motivated seller, creating a rare opportunity for a buyer to acquire a hotel asset at a significant discount.

Absentee-Owned Asset

• The absentee-owned hotel operates with a full staff. Great upside exists for a more hands-on owner/operator to restructure the hotel’s operations and increase net operating income (NOI) flow-through.

Upside Potential for a Robust Owner/Operator

• The hotel has operated at significantly high expense margins given the absentee ownership. Per the 2023 and 2024 year-end financial statements, the hotel achieved an average gross operating profit (GOP) of 35.15%.

• Based on a selection of similarly branded, limited-service hotel operating statements, the hotel should achieve a stabilized GOP margin between 48.0% and 52.0%.

Underperforming Hotel, Significant Rooms Revenue Growth Expected

• Per the April 2025 STR data, the hotel ranked last out of six in terms of RevPAR, registering a 71.8% penetration index and underscoring strong potential for rate growth.

• Post renovation, upside exists for an experienced operator to implement more-aggressive sales strategies to improve both occupancy and top-line performance.

Increasing Revenue Trend

• The hotel’s 2024 rooms revenue equated to $961,000 (rounded), reflecting an 11.53% increase compared to the previous year. Meanwhile, the competitive set’s revenue increased by 37.5%, indicating the lack of managerial attention of the existing ownership.

• Per the year-to-date April 2025 STR data, RevPAR continued to increase for both the hotel and competitive set, up by 10.5% and 11.1%, respectively, compared to the same period last year.

Priced Below Replacement Cost

• This opportunity presents an investor with the ability to acquire the property at a price well below replacement cost, at less than $59,000 (rounded) per key.

• To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $100,000 per key.

La Quinta Inn & Suites by Wyndham Franchise

• Upon approval by Wyndham Hotels & Resorts, an investor can expect a new, 20-year license agreement.

• La Quinta by Wyndham is a well-established, limited-service, upper-midscale hotel brand that appeals to both business and leisure travelers. The brand’s RevPAR index averages over 100.0% nationally, and franchisees benefit from the 100 million Wyndham Rewards members to help drive guest stays.

$6-Billion E-Fuels Facility Coming to Matagorda

• HIF Global is developing a $6-billion e-fuels facility in Matagorda County. Construction is slated to begin in 2026, with the plant expected to produce 1.4 million tons of e-methanol annually. The project will bring approximately 4,000 construction workers during peak buildout and create around 140 permanent jobs once operational. This large-scale industrial development is expected to generate significant hotel demand from both construction crews and long-term corporate travelers supporting plant operations and maintenance.

Excellent Location Among Strong Corporate & Leisure Demand Generators

• The property is strategically located off State Highway 35 in Bay City, Texas, proximate to numerous dining, retail, and entertainment options, which is a positive attribute for both business and transient guests.

• Bay City is the closest population base to the Phillips 66 Sweeny Refinery in the nearby town of Old Ocean, Texas.

• Large industrial complexes in the region generate significant lodging demand for the market. Many contractors and workers relocate to the area (on a temporary basis) for special projects and improvements at the refineries. These temporary workers travel to various oil projects in the area, often staying at local hotels for extended periods of time.

• Leisure demand generators include the Matagorda County Museum, Palacios Area Historical Museum, and Birding Nature Center.

• Special events also play a role during key weekends, such as the Matagorda Seafood Fest and Fisherman's Festival. Additionally, youth sports tournaments and outdoor fishing events and tournaments are popular in the region and provide demand throughout the year based on various sport and fishing seasons.