Hotel-Motel

Super 8 South Padre Island

Listing Price: $4,300,000

Cap Rate
9.22%
Number of Rooms
66
RevPAR
$47
Gross SF
46,940
Price/Room
$65,152
RRM
3.81
Price/Gross SF
$91.61
Year Built
1999

Investment Overview

Marcus & Millichaps National Hospitality Group, as an exclusive representative of the seller, is pleased to present for sale to qualified investors the Super 8 South Padre Island. The Wyndham-branded hotel is priced at $4,300,000 or $65,152 per room; this represents a 3.81 times multiple on year-end 2019 room revenues. An established property, constructed in 1999, is located along the Padre Boulevard.

Priced at a 9.2 percent capitalization rate, this two-story, 66-room hotel presents a new owner the opportunity to acquire a stabilized asset on South Padre Island, in a high barrier to entry market. Labelled the Pride of Super 8 Hotel in 2019, this well-maintained hospitality asset is being sold at a price below replacement cost. An investor, looking to act as an owner-operator, can continue to maximize profits through a reduction in management costs for the property; additionally, a two-bedroom, one bath apartment is located on-site. The hotel is equipped with an outdoor pool, fitness center, and conference space.

Furthermore, the hotel is perfectly positioned in an Opportunity Zone and can provide upside to a potential owner in a 1031 exchange. Opportunity Zones are a new community development program established by Congress to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to reinvest their unrealized capital gains into Opportunity Funds that are dedicated to investing in Opportunity Zones, designated by the chief executives of every U.S. state and territory.

Operationally, the hotel achieved above $1,100,000 in 2019 room revenue; resulting in a net operating income of approximately 34.8 percent of total revenue; this translates to about $400,000 before debt service. The hotels room revenues have consistently surpassed $1,000,000 with a 10-year room revenue average above $1,250,000. The expenses include provisions for a four percent reserve for capital replacement. The hotel is offered fee simple, unencumbered by a management contract and debt.

High Barrier to Entry Market Only Three Hotels Have Been Built Since 2006
o Lighthouse Inn 2015
o Hilton Garden Inn 2018
o Courtyard - 2019

Investment Highlights

  • 66-Room, Exterior Corridor, Economy Hotel
  • Priced Significantly Below Replacement Cost at $65,152 Per Key
  • Strong Cash Flowing Asset With Approximately $400,000 in 2019 Net Operating Income
  • On-Site Owners Apartment; Two Bed, One Full Bath, and Full Kitchen
  • Priced at 3.42X the 10 Year Average Room Revenue
  • Award-Winning 2019 Pride of Super 8 Hotel

Exclusively Listed By

Hotel-Motel

Super 8 South Padre Island

Listing Price: $4,300,000

Cap Rate
9.22%
Number of Rooms
66
RevPAR
$47
Gross SF
46,940
Price/Room
$65,152
RRM
3.81
Price/Gross SF
$91.61
Year Built
1999

Investment Highlights

  • 66-Room, Exterior Corridor, Economy Hotel
  • Priced Significantly Below Replacement Cost at $65,152 Per Key
  • Strong Cash Flowing Asset With Approximately $400,000 in 2019 Net Operating Income
  • On-Site Owners Apartment; Two Bed, One Full Bath, and Full Kitchen
  • Priced at 3.42X the 10 Year Average Room Revenue
  • Award-Winning 2019 Pride of Super 8 Hotel

Investment Overview

Marcus & Millichaps National Hospitality Group, as an exclusive representative of the seller, is pleased to present for sale to qualified investors the Super 8 South Padre Island. The Wyndham-branded hotel is priced at $4,300,000 or $65,152 per room; this represents a 3.81 times multiple on year-end 2019 room revenues. An established property, constructed in 1999, is located along the Padre Boulevard.

Priced at a 9.2 percent capitalization rate, this two-story, 66-room hotel presents a new owner the opportunity to acquire a stabilized asset on South Padre Island, in a high barrier to entry market. Labelled the Pride of Super 8 Hotel in 2019, this well-maintained hospitality asset is being sold at a price below replacement cost. An investor, looking to act as an owner-operator, can continue to maximize profits through a reduction in management costs for the property; additionally, a two-bedroom, one bath apartment is located on-site. The hotel is equipped with an outdoor pool, fitness center, and conference space.

Furthermore, the hotel is perfectly positioned in an Opportunity Zone and can provide upside to a potential owner in a 1031 exchange. Opportunity Zones are a new community development program established by Congress to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to reinvest their unrealized capital gains into Opportunity Funds that are dedicated to investing in Opportunity Zones, designated by the chief executives of every U.S. state and territory.

Operationally, the hotel achieved above $1,100,000 in 2019 room revenue; resulting in a net operating income of approximately 34.8 percent of total revenue; this translates to about $400,000 before debt service. The hotels room revenues have consistently surpassed $1,000,000 with a 10-year room revenue average above $1,250,000. The expenses include provisions for a four percent reserve for capital replacement. The hotel is offered fee simple, unencumbered by a management contract and debt.

High Barrier to Entry Market Only Three Hotels Have Been Built Since 2006
o Lighthouse Inn 2015
o Hilton Garden Inn 2018
o Courtyard - 2019

Exclusively Listed By

MM Texture Background
MM Textured Background Lower