Why Hotels
Why Invest in HOTELS?
Hotels provide higher, more predictable, and lower-risk returns on your investment.
Reason #1
A hotel is a combination of real estate and a business. Since hotels charge by the day it can vary its room rate based on demand and supply. The combination of the two result in higher revenue per square foot compared with other income properties.
What It Means For You?
✔ Higher Yield
✔ Higher Return
Reason #2
A Franchised hotel like Marriott, Hilton, Holiday Inn, etc . had an established GLOBAL customer base. Moreover, it has systematized operations and marketing support. The combination of the two results in predictable revenue and predictable profit.
What It Means For You?
✔ Predictable Yield
✔ Predictable Return
Reason #3
Due to its higher revenue, hotels can afford truly professional hotel management and staff. Moreover, there’s an ongoing PIP (Property Improvement Plan) required by the franchise which means, the hotel is kept in great condition or institutional grade quality.
What It Means For You?
✔ Lower Risk on Your Investment
How We Pick the RIGHT Hotel to Invest in?
Hotels provide higher, more predictable, and lower-risk returns on your investment.
The Right Flag
We choose branded hotels. We like Marriott, Hilton and Hyatt. These brands have a loyal global customer base, great marketing support and best-in-class operational systems. This lowers our operational risk.
Well Below Rebuild Cost
We usually do not build from the ground up. Rather, we buy existing hotels and we consider its competitiveness vs. new builds. This ensures we can charge daily room rates that is profitable to us and affordable.
Demand Drivers
Is the hotel near offices, theme parks, big churches, sports stadiums, universities and tourist attractions? By choosing the right location with enough demand drivers, we lower our vacancy risk.
Value Add
We only choose hotel projects where we can create substantial increase in value through improved operations, & investing in a comprehensive PIP (Property Improvement Plan). This increases the value of our properties significantly lowering our disposition risk.
Discount to Value
We underwrite hotels conservatively and only acquire properties we can buy at substantially below market value. This gives us a good margin of safety to factor in cap rate decompressions or adverse economic corrections like a recession.
Across the US
We can buy hotels all over the country given our scale of operations. Our hotel operator partner company has over $1.5 BILLION of hotels with 1700 employees. We can also renovate properties cheaper than other operators given our vertical integration.
Interested in Investing in Hotels?
Below Are Just Three Deals Our Partner Repositioned...
Sharing a Few of Our Partner’s Remarkable Repositioning Successes.
Tampa Riverview
HILTON GARDEN
Ownership of the hotel engaged our hotel operator partner to manage the property when the owner/operated feared possible bankruptcy. Within one year the property’s value more than doubled:
- Improved RevPAR 18%
- Improved F&B Profit 386%
- Improved GOP 45.4%
- Improved EBITDA 119%
Wisconsin Dells
HILTON GARDEN
This building was in bankruptcy. Our hotel operator partner moved quickly to stabilize the operations and nearly doubled the value of the asset within less than 18 months and delivered the following results:
- Improved RevPAR 15%
- Improved F&B Revenue 45%
- Improved GOP 18%
Kennesaw (Atlanta, GA)
EMBASSY SUITES
Our hotel operator partner took over management from the owner/operator who was experiencing difficult economic times. Within one year the property’s value more than doubled:
- Improved RevPAR 10%
- Trimmed House Expense 14%
- Improved GOP 28%
- Improved EBITDA 37%