Comfort Suites hotel located near the prominent Texas Medical Center in Houston.
The 55-key Comfort Suites located near the Texas Medical Center in Houston is now available for sale as part of a Chapter 11 bankruptcy process. With a consistent revenue history generating approximately $1,650,000 annually over the last three years, this hotel presents an attractive investment opportunity. The current price of $121,000 per key is significantly lower than the replacement cost, making it appealing for potential buyers who can enhance profitability through renovations and operational improvements.
The 55-key Comfort Suites located near the Texas Medical Center and NRG Stadium in Houston is now on the market as part of a Chapter 11 bankruptcy process. This sale is characterized by an attractive opportunity for potential buyers, as the acquisition will be free of liens and encumbrances, pending approval from the bankruptcy court.
This hotel, situated in a highly desirable area, boasts a consistent revenue history, generating an average annual revenue of approximately $1,650,000 over the last three years. The hotel’s gross operating profit (GOP) margin has averaged less than 30.0% during this period. In contrast, similar economy-branded limited-service hotels typically realize a stabilized GOP margin between 45.0% and 50.0%. This discrepancy highlights a significant potential for improvement under new ownership.
The property is being marketed by HVS Brokerage & Advisory, which acts as the exclusive advisory firm to the ownership. The current sale price of the hotel is set at $121,000 per key, a figure that is substantially lower than the replacement cost. For context, constructing a comparable limited-service hotel would entail a minimum investment of around $150,000 per key.
The hotel presents opportunities for value addition through a change-of-ownership property improvement plan (PIP). Renovations aimed at updating the facilities could lead to elevated room rates and improved competitiveness within the local market.
The size of the hotel, with its 55 keys, is deemed ideal for an experienced owner/operator who is poised to restructure operations to enhance net operating income (NOI) flow-through. Its prime location within the Texas Medical Center and NRG Park neighborhood is particularly advantageous, known for its high land costs and limited franchise options, which makes this property a sought-after asset.
Steady market demand over the past years suggests that, despite the challenges faced by the hotel, it has maintained a stable revenue stream. This consistent performance, coupled with the potential for improved profitability via strategic renovations and operational adjustments, positions the Comfort Suites favorably for prospective investors looking to capitalize on the area’s growth and demand.
The significant difference in operating profit margins compared to competitors signals an opportunity for incoming ownership to realize greater returns with targeted management and investment strategies.
The sale of the Comfort Suites near the Texas Medical Center marks an important movement in the Houston hospitality market, providing potential investors with a unique opportunity to tap into a lucrative sector. With its solid revenue history, strategic location, and potential for enhanced profitability, this property could serve as a valuable addition to any hospitality portfolio.
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