Holiday Inn Express -Hotel for Sale - Coldwater, Michigan

420 views

Published on

Hotel Negotiations
Hotel Source advised the hotel owner of buyer concerns about a forthcoming Holiday Inn Express PIP. In order to maximize price, the owner agreed to place a limit on the buyer’s financial exposure to the PIP cost as part of the purchase and sale agreement. With this objection removed, the buyer was able to move forward.
Once the contract was executed, the owner and Hotel Source assisted the hotel buyer with due diligence items, including the franchise license. The total PIP cost was minimized, and the buyer was able to keep the total project cost within budget, while the seller did not have any financial obligations regarding the PIP.
www.hotelsource.com

Published in: Real Estate
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
420
On SlideShare
0
From Embeds
0
Number of Embeds
10
Actions
Shares
0
Downloads
1
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Holiday Inn Express -Hotel for Sale - Coldwater, Michigan

  1. 1. Hotel Source, Inc. Marketing Proposal Prepared for XXX - XXX, XX 6 CASE STUDY: SOLD Holiday Inn Express – Coldwater, Michigan Built in 1999, this property was owned and operated by its original developer. The Holiday Inn Express benefits from excellent interstate visibility along I-69, between I–80/90 and I-94. Challenge The owner’s desire was to sell the hotel and pursue additional developments. Having produced a significant return since its opening, Ownership believed this was an excellent investment and was not under pressure to sell. From a buyer’s perspective, the property was a desireable asset, but had its challenges. The property’s excellent location was offset by the market not having high barriers to entry. The property’s NOI was significant but was considered to be maxi- mized. Lastly, the hotel held the uncertainty of a Holiday Inn Express Product Improvement Plan (PIP). Period 1 Period 2 Period 3 A.D.R. $83.85 $82.86 $79.22 Occupancy 62.7% 62.7% 65.1% RevPAR $52.55 $51.93 $51.55 Room Revenue $1,538,522 $1,516,257 $1,505,249 Total Revenue $1,581,506 $1,560,378 $1,540,790 NOI $646,560 $636,915 $627,675 Hotels Sales & Marketing Process Hotel Source, Inc. created a bidding contest by procuring offers from numerous buyer groups that believed there was upside to the property through revenue growth and expense minimization. Results Hotel Source, Inc. advised ownership of buyer concerns about the forthcom- ing Holiday Inn Express PIP. In order to maximize price, ownership agreed to place a limit on the buyer’s financial exposure to the PIP cost. The PIP was minimized, and the buyer was able to keep the total project cost within budget. The property sold at 93% of the list price at a 12.2% cap rate, 3.4 room revenue multiplier and $66,250 per room. To the buyer’s delight, the property was sold out the night of closing!

×