Holiday Inn Express & Suites Houston Northwest Tomball Area in Tomball, TX Listed for Sale

HVS Brokerage & Advisory, as the sole and exclusive advisory firm to ownership, presents the opportunity to acquire the 72-key Holiday Inn Express & Suites Houston Northwest Tomball Area, a limited-service hotel asset in Tomball, Texas, which is part of the Houston-The Woodlands-Sugar Land MSA.

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 NOI flow-through.

Increasing Topline Revenue Trend with Upside

• In 2023, the hotel achieved rooms revenues of $1,900,000 (rounded), a 23.3% increase compared to 2022, reflecting its highest performance since 2018.

• In 2023, room-night demand for the hotel and competitive set increased by 19.1% and 13.1%, respectively.

• Per the March 2024 Monthly STR Report, the hotel ranked third and fourth out of eight competitors in terms of average daily rate (ADR) and occupancy. A more prudent operator should be able to implement more aggressive sales initiatives and recapture demand from corporate travelers and transition the hotel into the market leader.

• Based on HVS pro-forma projections, revenue over the next twelve months is anticipated to exceed $2,000,000 ($75 RevPAR), with an NOI flow-through of $668,000 (rounded).

• The two hotels listed below are the market leaders in the local submarket, registering an average RevPAR of $92 (rounded) in 2023. When comparing the 2023 RevPAR numbers, the hotel is only penetrating the market at 79.0% of the average RevPAR of these two hotels, indicating strong upside.

  • Residence Inn by Marriott: 103 keys, $95 RevPAR

  • Staybridge Suites, an IHG Hotel: 94 keys, $88 RevPAR

Excellent Location Among Numerous Demand Generators

• The property benefits from its excellent visibility and location off State Highway 249, near multiple dining, retail, and entertainment options.

• Notable local demand generators include the Tomball Town Center, HCA Houston Healthcare Tomball, Lateral Technology Corporation, SLR International Corporation, Enhanced Energy Partners Corporation, Crow Corporation, Baker Hughes, VEOLIA, Grimes Industrial, and Lonestar College, among others.

• Tomball is home to several popular wedding venues, including Boxwood Manor, Ella’s Garden, Sandlewood Manor, and The Estates at Pecan Park.

• Additional weekend demand is generated by travelers passing through en route to other destinations, people visiting friends or relatives, and youth sporting groups.

Transformative Developments Shaping Tomball’s Future

• NewQuest is currently developing The Grand at 249, a $90-million, 404,256-square-foot retail center at the intersection of Grand Parkway and State Highway 249 in Tomball. Once completed in late 2025, The Grand at 249 will represent the largest concentration of retail in the Houston Northwest submarket. According to the company, 96.0% of the development is already leased or under negotiation.

• Lovett Industrial is currently developing a three-phased, 240-acre business park at the intersection of Grand Parkway and State Highway 249. The first phase has been completed, featuring 1.9 million square feet of industrial space, and is anchored by the recently opened Macy’s distribution center, which encompasses more than 908,000 square feet. The second phase is currently in the design stage.

• Fred Stockton, owner of Stockton Inc. and the chair of the Harris County Fair & Rodeo Board of Directors, purchased 165 acres of land near Grand Parkway and Telge Road to be the new home for the Harris County Fair & Rodeo. The first event is scheduled for October 2024. Plans also call for the grounds to double as event space for the community.

• In June 2023, White Unicorn Investments acquired 77 acres of land at the intersection of Grand Parkway and Cypress Rosehill Road. According to the company, plans call for the development of retail, multifamily residential, and industrial space. Construction is expected to begin in the next 18 to 24 months.

Well-Maintained Physical Product, Minimal Change-of-Ownership PIP Expected

• The hotel opened in 2015, and current ownership has maintained the physical asset well.

• Over the past 36 months, current ownership has invested over $500,000 renovating the property; major updates include a complete refresh of the lobby/breakfast area, new exterior paint and LED lighting, and a new server/hotel PMS system.

• The change-of-ownership property improvement plan (PIP) is available in the virtual deal room (VDR).

• The PIP is estimated to cost around $216,000, or $3,000 per key.

Discount to Replacement Cost

• To construct a similar limited-service hotel asset with comparable amenities, the estimated all-in investment would be a minimum of $140,000 per key.

• This opportunity presents an investor with the ability to acquire the property at a price well below replacement cost at $112,500 per key.

For inquiries please visit here to execute the Confidentiality Agreement.

Posted by Nevistas News on May 7, 2024.

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