HVS Brokerage & Advisory, as the only real and unique advisory agency to Possession, presents the chance to amass the 83-key Candlewood Suites Galveston, a just lately renovated, extended-stay resort asset in Galveston, Texas. A brand new investor can have the chance to understand the numerous upside of buying a just lately renovated extended-stay resort in a traditionally strong leisure market.

Sturdy Money Circulate, $770,000 NOI and 10.4% Cap Fee

• The 83-key rely is taken into account an excellent measurement for an skilled proprietor/operator.

• Per the 2024 year-end monetary assertion, the resort achieved a 58.4% gross home revenue (GOP), resulting in a powerful $770,000 (rounded) NOI flow-through, which underwrites to a ten.4% capitalization (cap) charge on the pricing steering. 

• Based mostly on HVS pro-forma projections, stabilized rooms income in 2026 (12 months two) is anticipated to exceed $2,100,000 ($70 RevPAR), with an NOI flow-through of $900,000 (rounded).

• From 2021 by way of 2023, the resort’s GOP averaged 53.5%, supported by persistently low working bills.

Resilient Ramp-Up Interval Publish Renovation

• Possession accomplished an intensive, property-wide renovation in 2022/23. As a result of complete renovation, company accounts have been displaced from 2000 by way of 2022.

• Based mostly on the November 2024 STR report, YTD room-night demand for the submarket market and the resort elevated 6.1% and 12.8%, respectively.

• The resort has skilled a powerful rebound in rooms income, with YTD November 2024 income registering a 14.9% enhance over the identical interval final 12 months.

Extremely Desirbale Prolonged-Keep Lodge Operation

• The Candlewood Suites model has a powerful fame within the trade as one of many main midscale extended-stay merchandise; furthermore, extended-stay lodges are extremely fascinating property to personal and have confirmed their resilience throughout downturns.

• The all-suite design promotes visitor independence, which yields to decrease housekeeping prices and probably larger income. The model additionally promotes a low-cost working mannequin that permits a typical Candlewood Suites property to function with twelve workers. This enterprise mannequin advantages an investor to function an asset that yields excessive GOP margins and NOI flow-through.

Low cost to Substitute Price at $89,000 per Key

• This chance presents an investor with the flexibility to amass the property at a value nicely under alternative value, at $89,000 (rounded) per key.

• To assemble an identical asset with comparable facilities, the estimated all-in funding could be a minimal of $130,000 per key. The upper prices are because of the shortage of obtainable land and restricted franchise choices in Galveston.

• Given the current renovation, a minimal change-of-ownership property enchancment plan (PIP) is anticipated.

Sturdy Drive-to Leisure Market of Galveston

• An investor can have an distinctive alternative to buy an asset strategically positioned close to I-45 and throughout the “Texas Triangle” of Austin, Dallas/Fort Price, Houston, and San Antonio.

• Roughly 21 million folks reside inside a four-hour drive of Galveston.

• There are quite a few festivals, particular occasions, sporting occasions, and gatherings held all year long in Galveston, with significantly robust demand generated throughout the spring and summer season months.

• Tourism demand in Galveston has elevated lately together with citywide efforts to enhance native roads and infrastructure, develop the seashores, and enhance the cruise-ship terminals.

• Per the 2023 Galveston Financial Affect of Tourism Examine, accomplished by metropolis officers final summer season, vacationer visitation reached a peak of 8.9 million guests in 2023, reflecting a 9.3% enhance from 2022. These guests spent a file $1.7 billion, which immediately affected the native financial system.

Over $1 Billion in Developments All through Galveston

• Early final 12 months, builders introduced that they’re to start with phases of developing the $700-million Margaritaville Resort on 95 acres of land to the east of the island. Together with the 15-story resort, the event will embrace an expansive, elevated pool deck that overlooks the seaside; a waterpark with a lazy river; a big ballroom; a number of eating places; and 278 multi-bedroom cottages. This undertaking would be the largest resort growth in Galveston and the model’s first way of life, ground-up resort growth in Texas. Development is slated for completion by 2026.

• Galveston’s panorama is evolving with main developments pushed by the Galveston Wharves, together with the $90-million West Port Cargo Advanced and the groundbreaking of the $151-million and fourth cruise terminal complicated on the Port of Galveston, the place MSC Seascape will homeport from November 2025 onward. These port expansions sign vital financial progress and job creation alternatives in Galveston. This previous October, Norwegian Cruise Line confirmed a ten-year contract to sail out of the brand new terminal as soon as accomplished.

• Moreover, the brand new Engineering Classroom and Analysis Constructing at Texas A&M College, scheduled for completion within the fall of 2025, additional contributes to town’s transformation, enhancing academic choices and bolstering Galveston’s attraction as a dynamic coastal vacation spot.

• Along with these initiatives, notable actual property developments, resembling Roseate Seaside (a 160-home beachfront group) and Tiara on the Seaside (a ten-story condominium complicated) are below development in Galveston’s West Finish neighborhood. These ventures, together with a deliberate, $250-million, beachside, mixed-use growth close by, illustrate town’s rising variety and attractiveness.

Wonderful Location Amongst Sturdy Company & Leisure Demand Turbines

• The property advantages from its strategic location on the 61st Road Exit off I-45, a significant thoroughfare for these touring to Galveston Island.

• The property is proximate to quite a few eating, retail, and leisure choices, which is a optimistic attribute for each enterprise and transient friends.

• Company demand mills within the space embrace the College of Texas Medical Department (UTMB), Galveston Faculty, Texas A&M College, Landry’s, Moody Gardens, Moody Financial institution, ANICO, Mitchell Household Firms, and the petrochemical refineries in Texas Metropolis.

• Texas Metropolis is house to the key petrochemical refineries of DOW Chemical Firm, Marathon, Valero, Eastman Chemical Firm, and INEOS Styrolution America; these amenities generate year-round demand associated to plant shutdowns and upkeep.

• Leisure demand mills within the space embrace Port of Galveston Cruise Terminal, Moody Gardens, Schlitterbahn Water Park & Resort, Pleasure Pier, 61st Road Fishing Pier, Galveston Island Conference Heart, and the historic Downtown Galveston.

• The Port of Galveston ranks because the fourth-busiest cruise port in North America. In 2023, the port hosted 354 cruise-ship sailings, accommodating over 1.49 million passengers and reflecting a 42.0% enhance from 2022. Moreover, it’s on observe to be the third hottest cruise house port in america and is acknowledged as one of many high cruise ports globally.

Candlewood Suites Franchise, 10-Yr Settlement

• Upon the sale, an investor can count on a brand new, 10-year license settlement with InterContinental Motels Group (IHG).

• The award-winning IHG® Rewards Membership loyalty program is among the largest within the resort trade, providing members extra selections to redeem their factors than some other resort loyalty program on the planet. Serving over 100 million enrolled members worldwide, IHG Rewards Membership is an efficient instrument for driving prospects to IHG lodges and creating model loyalty.

For inquiries please go to here to execute the Confidentiality Settlement.