Hotel-Motel

BW Plus / Executive Residency

Listing Price: $7,700,000

Cap Rate
5.60%
Number of Rooms
82
RevPAR
$49
Gross SF
56,717
Price/Room
$93,902
RRM
5.25
Price/Gross SF
$135.76
Year Built
2018

Investment Overview

Marcus & Millichap is proud to exclusively offer the brand new Best Western Plus Executive Residency Ascension Hotel, a four-story limited service hotel located in Gonzales, Louisiana. The 82-unit, upper-midscale, interior corridor property is a new concept developed to accommodate extended-stay consumers, which is a fast-growing segment in the lodging industry.

According to Best Western CEO, David Kong, [The concept] is designed for quality, cost-effective construction, efficient operations, and will drive bottom-line results." Since it is two brands under one roof, the property attracts business, leisure and extended-stay guests thereby lowering development and operating costs while simultaneously realizing improved market share.

Listed at $7.7 million, the property is offered below the appraised value of $8.45 million and below the typical replacement cost of $9 million or $110,000 per room. Using conservative metrics for the market, $97 ADR and 64 percent occupancy, the property is estimated to produce $1.85 million in 2019 for the first full year. As a result, the property should realize an NOI of approximately $616,000 or an 8 percent cap rate.

The Tax Cuts and Jobs Act (TCJA) added an enormous new deduction and also beneficially changed depreciation that will affect this business.

Section 199A Deduction
There is a new deduction for qualified business income of pass-through entities, also known as Section 199A provision, which allows a deduction of up to 20 percent of the qualified business income for owners of some businesses. Using Section 199A, business owners may get to simply not pay income taxes on 20 percent of the income they earn.

Depreciation
The TCJA allows 100 percent expensing for business property acquired and placed in service after September 27, 2017 and before January 1, 2023. This 100 percent deduction generally applies to depreciable business assets. Machinery, equipment, furniture, fixtures, computers, appliances, fences, parking lots, and landscaping all generally qualify.

Investment Highlights

  • New Construction - October 2018
  • Nearby Demand Generators - Downtown Baton Rouge, LSU and New Orleans
  • Great Access to Interstate 10
  • Opportunity to Capitalize on the Bonus Depreciation of 2018 Tax Plan
  • Excellent Stable Market

Exclusively Listed By

Hotel-Motel

BW Plus / Executive Residency

Listing Price: $7,700,000

Cap Rate
5.60%
Number of Rooms
82
RevPAR
$49
Gross SF
56,717
Price/Room
$93,902
RRM
5.25
Price/Gross SF
$135.76
Year Built
2018

Investment Highlights

  • New Construction - October 2018
  • Nearby Demand Generators - Downtown Baton Rouge, LSU and New Orleans
  • Great Access to Interstate 10
  • Opportunity to Capitalize on the Bonus Depreciation of 2018 Tax Plan
  • Excellent Stable Market

Investment Overview

Marcus & Millichap is proud to exclusively offer the brand new Best Western Plus Executive Residency Ascension Hotel, a four-story limited service hotel located in Gonzales, Louisiana. The 82-unit, upper-midscale, interior corridor property is a new concept developed to accommodate extended-stay consumers, which is a fast-growing segment in the lodging industry.

According to Best Western CEO, David Kong, [The concept] is designed for quality, cost-effective construction, efficient operations, and will drive bottom-line results." Since it is two brands under one roof, the property attracts business, leisure and extended-stay guests thereby lowering development and operating costs while simultaneously realizing improved market share.

Listed at $7.7 million, the property is offered below the appraised value of $8.45 million and below the typical replacement cost of $9 million or $110,000 per room. Using conservative metrics for the market, $97 ADR and 64 percent occupancy, the property is estimated to produce $1.85 million in 2019 for the first full year. As a result, the property should realize an NOI of approximately $616,000 or an 8 percent cap rate.

The Tax Cuts and Jobs Act (TCJA) added an enormous new deduction and also beneficially changed depreciation that will affect this business.

Section 199A Deduction
There is a new deduction for qualified business income of pass-through entities, also known as Section 199A provision, which allows a deduction of up to 20 percent of the qualified business income for owners of some businesses. Using Section 199A, business owners may get to simply not pay income taxes on 20 percent of the income they earn.

Depreciation
The TCJA allows 100 percent expensing for business property acquired and placed in service after September 27, 2017 and before January 1, 2023. This 100 percent deduction generally applies to depreciable business assets. Machinery, equipment, furniture, fixtures, computers, appliances, fences, parking lots, and landscaping all generally qualify.

Exclusively Listed By

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