Hotel-Motel

Econo Lodge Effingham

Listing Price: $1,095,000

Cap Rate
13.39%
Number of Rooms
65
RevPAR
$19
Gross SF
41,731
Price/Room
$16,846
RRM
2.45
Price/Gross SF
$26.24
Year Built
1977

Investment Overview

Marcus & Millichaps National Hospitality Group, as an exclusive representative of the seller, is pleased to present for sale to qualified investors the Econo Lodge Effingham. The Choice-branded hotel is priced at $1,395,000 or $21,462 price per room; this represents a 3.12 times multiple on trailing twelve-month room revenues. An opportunistic property, constructed in 1977, is located on West Fayette Avenue, near Interstate 70.

Priced at an attractive 10.51 percent capitalization rate, this two-story, 65-room hotel presents a new owner the opportunity to acquire a well-maintained hospitality asset at a price below replacement cost. An advantageous property, with significant upside potential for an owner-operator, has additional value-add opportunities for a new owner. The hotel is positioned in an opportunity zone, which will provide a new owner tax break incentives on specific hotel improvements, contact agent for more information.

Operationally, this hotel achieved $447,639 in room revenue, resulting in a net operating income of approximately 31.9 percent of overall revenues; this equates to roughly $146,632 before debt service. The hotel underwent major renovations in 2018 and over the next few years could see an increased return on investment. Through additional marketing to drive RevPAR growth, a new owner will be able to capitalize on a moderate increase in revenues to meet the market.

This large 122-room hotel is currently operating 65 rooms, per agreement with Choice. With a full completion of Econo Lodge PIP, a new owner can put in service an additional 57 rooms; this increase in room count offers potential to experience an increase in revenues. Recently, the current owner has completed construction on a meeting room and is in the process of building out two on-site owner quarters.

The expenses include provisions for a four percent reserve for capital replacement. The hotel is offered fee simple, unencumbered by management and debt.

Investment Highlights

  • Less than Five Miles from Effingham County Memorial Airport
  • Priced Significantly Below Replacement Cost at $16,846 per Key
  • Hotel Underwent Major Renovations Completed in 2018
  • Operational Upside for Prospective Hands-On Owner-Operator Investor
  • Impressive Property Operations with Lucrative 13.39 Percent Capitalization Rate
  • 65-Room, Exterior Corridor, Economy Hotel Built in 1977

Exclusively Listed By

Listing Price: $1,095,000

Cap Rate
13.39%
Number of Rooms
65
RevPAR
$19
Gross SF
41,731
Price/Room
$16,846
RRM
2.45
Price/Gross SF
$26.24
Year Built
1977

Investment Highlights

  • Less than Five Miles from Effingham County Memorial Airport
  • Priced Significantly Below Replacement Cost at $16,846 per Key
  • Hotel Underwent Major Renovations Completed in 2018
  • Operational Upside for Prospective Hands-On Owner-Operator Investor
  • Impressive Property Operations with Lucrative 13.39 Percent Capitalization Rate
  • 65-Room, Exterior Corridor, Economy Hotel Built in 1977

Investment Overview

Marcus & Millichaps National Hospitality Group, as an exclusive representative of the seller, is pleased to present for sale to qualified investors the Econo Lodge Effingham. The Choice-branded hotel is priced at $1,395,000 or $21,462 price per room; this represents a 3.12 times multiple on trailing twelve-month room revenues. An opportunistic property, constructed in 1977, is located on West Fayette Avenue, near Interstate 70.

Priced at an attractive 10.51 percent capitalization rate, this two-story, 65-room hotel presents a new owner the opportunity to acquire a well-maintained hospitality asset at a price below replacement cost. An advantageous property, with significant upside potential for an owner-operator, has additional value-add opportunities for a new owner. The hotel is positioned in an opportunity zone, which will provide a new owner tax break incentives on specific hotel improvements, contact agent for more information.

Operationally, this hotel achieved $447,639 in room revenue, resulting in a net operating income of approximately 31.9 percent of overall revenues; this equates to roughly $146,632 before debt service. The hotel underwent major renovations in 2018 and over the next few years could see an increased return on investment. Through additional marketing to drive RevPAR growth, a new owner will be able to capitalize on a moderate increase in revenues to meet the market.

This large 122-room hotel is currently operating 65 rooms, per agreement with Choice. With a full completion of Econo Lodge PIP, a new owner can put in service an additional 57 rooms; this increase in room count offers potential to experience an increase in revenues. Recently, the current owner has completed construction on a meeting room and is in the process of building out two on-site owner quarters.

The expenses include provisions for a four percent reserve for capital replacement. The hotel is offered fee simple, unencumbered by management and debt.

Exclusively Listed By

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