days inn & suites youngstown/girard · 2019. 6. 11. · competitor data market overview 05...
TRANSCRIPT
1615 E Liberty St • Girard, OH 44420
Offering Memorandum
1
DAYS INN & SUITES YOUNGSTOWN/GIRARD
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and
should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified
information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due
diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the
future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or
asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any
tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable;
however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters
and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of
the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name
is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or
commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
DAYS INN & SUITES YOUNGSTOWN/GIRARD
Girard, OH
ACT ID Y0300456
BOR:
Michael Glass
230 West St., Suite 100,
Columbus, OH 43215
TEL: 614-360-98
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TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Offering Summary
Regional Map
Local Map
Aerial Photo
Parcel Map
FINANCIAL ANALYSIS 02STR
Historical P&L
5 Year Pro Forma
Acquisition Financing
MARKET COMPARABLES 03Sales Comparables
MARKET COMPETITORS 04
Competitive Set Performance
Competitor Data
MARKET OVERVIEW 05Market Analysis
Demographic Analysis
DAYS INN & SUITES YOUNGSTOWN/GIRARD
3
DAYS INN & SUITES YOUNGSTOWN/GIRARD
4
INVESTMENT
OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
#
EXECUTIVE SUMMARY
OFFERING SUMMARY
MAJOR EMPLOYERS
EMPLOYER # OF EMPLOYEES
St Elizabeth Health Center 2,500
Youngstown State University 853
Northside Medical Center 798
William F Maag Jr Library 521
NationaLease 460
Northeast Ohio Corrections 450
Board Mhning Cnty Cmmissioners 400
Exal Corporation 385
Westview Apartments Ohio LLC 385
Mahoning County 384
US Post Office 333
Brentwood Originals Inc 330
DEMOGRAPHICS
1-Miles 3-Miles 5-Miles
2017 Estimate Pop 3,155 33,832 87,901
2017 Census Pop 3,203 34,592 89,610
2017 Estimate HH 1,276 13,306 35,299
2017 Census HH 1,315 13,795 36,428
Median HH Income $42,114 $37,034 $34,800
Per Capita Income $21,904 $20,884 $20,294
Average HH Income $53,756 $51,576 $48,606
5
VITAL DATA
CURRENT YEAR 1
Price $2,350,000 CAP Rate 13.32% 13.1%
PIP $0 Net Operating Income $321,113 $307,768
Down Payment 20% / $470,000 Net Cash Flow After Debt Service 40.54% / $190,538 37.70% / $177,193
Loan Amount $1,928,000 Total Return 49.44% / $232,345 46.60% / $218,999
Loan Type Proposed New
Interest Rate / Amortization 4.65% / 25 Years
Price/Room $44,340
Ownership Type Fee Simple
Number of Rooms 53
Rentable Square Feet 25,658
Number of Buildings 1
Number of Stories 2
Year Built 1978
Lot Size 2 acre(s)
DAYS INN & SUITES GIRARD
OFFERING SUMMARY
▪ 53 Rooms
▪ Highly Visible Location - Directly off Interstate (I-80)
▪ Renovated In 2014
▪ One Hour from Pittsburg and Cleveland
▪ 4 Miles North of Downtown Youngstown
▪ Owners Apartment - Two Floors, Two Living Spaces, Two Kitchens, Three Bed
Rooms, Two Full Baths, and Patio Area
INVESTMENT HIGHLIGHTS
Marcus & Millichap is pleased to present an opportunity to acquire a newly renovated Days Inn & Suites less than 4 miles from Youngstown State University and less than 5
miles from Covelli Center & Downtown Youngstown.
The subject property is one hour from Cleveland, Ohio and Pittsburgh, Pennsylvania. The Days Inn & Suites Youngstown/Girard Ohio has an occupancy of 58.2 percent,
ADR of $56.84, and a RevPAR of $33.09 The hotel currently operates at 42.94 percent margins which is a net operating income $289,878
We expect ADR and occupancy to rise since the main exit on I-80; exit 229 was closed down for construction and re-opened in the middle of 2017. The numbers for 2016-
2017 were lower as expected, but are now normalizing and predicted to generate close to $700,000.00 - $750,000.00 in room revenues, 60 percent Occ, $59 ADR and a net
operating income ranging from $290,000 - $300,000.00. The Days Inn & Suites Youngstown presents investors an opportunity to acquire a Limited Service product
surrounded by multiple demand generators, significant upside potential through hands on management and the ability to achieve a 20 percent five year return.
All rooms and suites include en-suite bathrooms with showers and tubs, free Wi-Fi, TVs, and desks with ergonomic chairs. Other amenities include microwaves, mini-fridges,
and tea and coffeemakers. Whirlpool tub suites are available. Also currently includes a continental breakfast buffet as well as parking for cars, trucks and buses.
There is a heated indoor pool, hot tub, fitness center, and business centers with meeting rooms available.
The subject property also has an owners apartment which consists of two floors, two living rooms, two full kitchens, three bed rooms, two full baths,, and patio area..
INVESTMENT OVERVIEW
6
DAYS INN & SUITES GIRARD
#
OFFERING SUMMARY
PROPERTY OVERVIEW
All rooms and suites include en-suite bathrooms with showers and tubs, free Wi-Fi, TVs, and desks with
ergonomic chairs. Other amenities include microwaves, mini-fridges, and tea and coffeemakers. Whirlpool tub
suites are available. Also currently includes a continental breakfast buffet as well as parking for cars, trucks and
buses. In 2019 all rooms received brand new mattresses, bedspreads, & bed sheets. Features brand new
water heaters in 2019 as well.
There is a heated indoor pool, hot tub, and fitness and business centers with meeting rooms available.
The subject property also has an owners apartment which consists of two floors, two living rooms, two full
kitchens, three bed rooms, two full baths, and patio area.
The Seller has owned this hotel for 25 years, it was a former Econo Lodge, and in 2007 they converted it into a
Days Inn & Suites by Wyndham.
***Main reason current owner is selling is due to the fact that they now live in Eastern Pennsylvania.***
7
▪ Indoor Heated Pool
▪ Complimentary Breakfast
Common Area Amenities
▪ Complimentary Wireless Internet Connection
▪ Business Center & Meeting Rooms
▪ Fitness Center
▪ Desk & Ergonomic Chairs
Guest Room Amenities
▪ New Mattresses & Bedspreads-Sheets
▪ Coffee/Tea Maker
▪ Television & Direct Dial Phone
▪ Mini-Refrigerator & Microwave
7
PROPERTY OVERVIEW
DAYS INN & SUITES GIRARD
The Days Inn & Suites Youngstown is located off of Interstate 80 the most traveled US interstate with business from a wide range of demand generators from large corporations
to leisure travel attractions.
The hotel is only 5 mile from one of the area’s top employers InfoCision. One of the premier companies in direct marketing services, InfoCision employs 1500 area residents
through their main campus. Other major area employers include AT&T, Delphi Packard, General Electric, General Motors Lordstown Plant, and Youngstown State University.
Area leisure attractions are anchored by all Ohio’s Mahoning Valley has to offer. The area is home to the Covelli Center, Hollywood Gaming Racino, Eastwood Mall, Southern
Park Mall, and The Butler Institute of American Art with many more attractions just a short drive away in Pennsylvania .
LOCATION OVERVIEW
8
PROPERTY OVERVIEW
DAYS INN & SUITES GIRARD
9
OFFERING SUMMARY
DAYS INN & SUITES YOUNGSTOWN/GIRARD
10
PROPERTY SUMMARY
THE OFFERING
Property Days Inn & Suites Youngstown/Girard
Price $2,350,000
Property Address 1615 E Liberty St, Girard, OH
Assessors Parcel Number 12-598854
Zoning Commercial - Hotel/Motel
SITE DESCRIPTION
Number of Rooms 53
ADA Rooms 2
Number of Stories 2
Year Built/Renovated 1978 / 2014
Ownership Type Fee Simple
Lot Size 2 acre(s)
Parking 70
Location Highway Exit
CONSTRUCTION
Foundation Concrete
Framing Brick
Exterior Stucco
Parking Surface Asphalt
Roof Shingle/Pitched
MECHANICAL
HVAC Individual PTAC
Elevators NO
CHANGE TO FRANCHISE
Application Fee $35,000.00
Parent Company Wyndham Hotel Group
ROOM TYPES
NUMBER OF ROOMS ROOM TYPE
26 Double
16 Queen
9 King
2 ADA Compliant
PROPOSED FINANCING
FIRST TRUST DEED
Loan Amount $1,928,000
Loan Type Proposed New
Interest Rate 4.65%
Amortization 25 Years
Loan Term 10 Years
Loan to Value 82%
Debt Coverage Ratio 2.46
SECOND TRUST DEED
Loan Type All Cash
REGIONAL MAP
DAYS INN & SUITES YOUNGSTOWN/GIRARD
11
LOCAL MAP
DAYS INN & SUITES YOUNGSTOWN/GIRARD
12
AERIAL PHOTO
DAYS INN & SUITES YOUNGSTOWN/GIRARD
13
Marcus & Millichap closes
more transactions than any other
brokerage firm.
12
DAYS INN & SUITES YOUNGSTOWN/GIRARD
14
PROPERTY PHOTO
PARCEL MAP
DAYS INN & SUITES YOUNGSTOWN/GIRARD
15
DAYS INN & SUITES YOUNGSTOWN/GIRARD
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FINANCIAL
ANALYSIS
FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
STR
17
FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
HISTORICAL P&L
18
FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
HISTORICAL P&L
19
FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
5 YEAR PRO FORMA
20
FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
5 YEAR PRO FORMA
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FINANCIAL ANALYSIS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
5 YEAR RETURN
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MARCUS & MILLICHAP CAPITAL CORPORATION
CAPABILITIES
MMCC—our fully integrated, dedicated financing arm—is committed to providing
superior capital market expertise, precisely managed execution, and unparalleled
access to capital sources providing the most competitive rates and terms.
We leverage our prominent capital market relationships with commercial banks,
life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae,
Freddie Mac and HUD to provide our clients with the greatest range of
financing options.
Our dedicated, knowledgeable experts understand the challenges of financing
and work tirelessly to resolve all potential issues to the benefit of our clients.
National platform
operating
within the firm’s
brokerage offices
$5.1 billion total
national
volume in 2016
Access to more
capital sources
than any other
firm in the
industry
Optimum financing solutions to
enhance value
Our ability to enhance buyer
pool by expanding finance
options
Our ability to enhance
seller control
• Through buyer
qualification support
• Our ability to manage buyers
finance expectations
• Ability to monitor and
manage buyer/lender progress,
insuring timely,
predictable closings
• By relying on a world class
set of debt/equity sources
and presenting a tightly
underwritten credit file
WHY MMCC?
Closed 1,651
debt and equity
financings
in 2016
ACQUISITION FINANCING
DAYS INN & SUITES YOUNGSTOWN/GIRARD
23
DAYS INN & SUITES YOUNGSTOWN/GIRARD
24
MARKET
COMPARABLES
PROPERTY NAMEDAYS INN & SUITES YOUNGSTOWN/GIRARD
SALES COMPARABLES
25
SALES COMPARABLES
Avg. .00
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Average RRM
Avg. $55.59
$0.00
$7.50
$15.00
$22.50
$30.00
$37.50
$45.00
$52.50
$60.00
$67.50
$75.00
Average RevPAR
Avg. $53,521
$0
$9,000
$18,000
$27,000
$36,000
$45,000
$54,000
$63,000
$72,000
$81,000
$90,000
Average Price Per Room
Avg. 10.38%
0
1
3
4
5
7
8
9
10
12
13
Average Cap Rate
PROPERTY NAME
MARKETING TEAM
DAYS INN & SUITES YOUNGSTOWN/GIRARD
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
26
1
Close of Escrow 5/22/2017
Asking Price $4,055,000
Price/Room $61,439
Price/SF $279.67
CAP Rate 10.92%
Total No. of Rooms 66
Year Built / Renovated 2001
Underwriting Criteria
Occupancy 61%
ADR $101.89
Rev PAR $62
HAMPTON INN4400 Belmont Ave, Youngstown, OH, 44505
Close of Escrow 5/5/2017
Asking Price $6,495,000
Price/Room $82,215
CAP Rate 10.24%
Total No. of Rooms 79
Year Built / Renovated 2002 / 2015
Underwriting Criteria
Occupancy 61%
ADR $108.92
Rev PAR $66
2
HAMPTION INN COLUMBUS2093 South Hamilton Road, Columbus, OH, 43232
PROPERTY NAME
MARKETING TEAM
DAYS INN & SUITES YOUNGSTOWN/GIRARD
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
27
Close of Escrow 3/3/2017
Asking Price $3,175,000
Price/Room $33,073
Price/SF $24.22
CAP Rate 11.04%
Total No. of Rooms 96
Year Built / Renovated 1987 / 2015
Underwriting Criteria
Occupancy 62%
ADR $61.72
Rev PAR $38
3
HAWTHORN SUITES TOLEDO6101 Trust Dr, Holland, OH, 43528
4
Close of Escrow 10/25/2016
Asking Price $2,010,000
Price/Room $33,500
CAP Rate 10.73%
Total No. of Rooms 60
Year Built / Renovated 1998 / 2013
Underwriting Criteria
Occupancy 55%
ADR $71.12
Rev PAR $39
BEST WESTERN PLUS UNIVERSITY 2117 Marion Mount Gilead Road, Marion, OH, 43302
Close of Escrow 5/31/2016
Asking Price $3,500,000
Price/Room $57,377
CAP Rate 8.96%
Total No. of Rooms 61
Year Built / Renovated 1998 / 2012
Underwriting Criteria
Occupancy 72%
ADR $101.41
Rev PAR $73
5
HOLIDAY INN EXPRESS7301 State Rte 37, Sunbury, OH, 43074
DAYS INN & SUITES YOUNGSTOWN/GIRARD
28
MARKET
COMPETITORS
DAYS INN & SUITES YOUNGSTOWN/GIRARD
$55.00
$56.00
$57.00
$58.00
$59.00
$60.00
$61.00
$62.00
Prior Year 3 Prior Year 2 Prior Year 1
ADR Comparison
Hotel/Motel Comp Set
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Prior Year 3 Prior Year 2 Prior Year 1
RevPAR Comparison
Hotel/Motel Comp Set
COMPETITORS
COMPETITIVE SET PERFORMANCE
The table below summarizes the occupancy, ADR, and RevPAR for the Days Inn & Suites Youngstown/Girard and its defined
competitive set for the Prior Year 3 - Prior Year 1 periods.
Source: Smith Travel Research
OCCUPANCY, ADR & RevPAR
Days Inn & Suites Youngstown/Girard
Occupancy ADR RevPAR
Year Hotel/Motel Comp Set Penet. Hotel/Motel Comp Set Penet Hotel/Motel Comp Set Penet
Prior Year 3 58.8% 47.1% 125.0% $59.06 $61.32 96.0% $34.73 $28.88 120.0%
Prior Year 2 50.7% 43.2% 117.0% $60.06 $59.93 100.0% $30.45 $25.89 118.0%
Prior Year 1 43.7% 40.4% 108.0% $60.18 $57.11 105.0% $26.30 $23.07 114.0%
% Change -13.8% -6.5% -13.6% 0.2% -4.7% 9.4% -13.6% -10.9% -5.0%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Prior Year 3 Prior Year 2 Prior Year 1
Occupancy Comparison
Hotel/Motel Comp Set
Prior Year 3 Prior Year 2 Prior Year 1
Hotel/Motel 58.8% 50.7% 43.7%
Comp Set 47.1% 43.2% 40.4%
Index 125.0% 117.0% 108.0%
Prior Year 3 Prior Year 2 Prior Year 1
Hotel/Motel $59.06 $60.06 $60.18
Comp Set $61.32 $59.93 $57.11
Index 96.0% 100.0% 105.0%
Prior Year 3 Prior Year 2 Prior Year 1
Hotel/Motel $34.73 $30.45 $26.30
Comp Set $28.88 $25.89 $23.07
Index 120.0% 118.0% 114.0%
29
DAYS INN & SUITES YOUNGSTOWN/GIRARD
30
MARKET
OVERVIEW
MARKET OVERVIEW
OVERVIEW
YOUNGSTOWN
FAMILY FRIENDLYA desirable quality of life attracts many families. Draws include Youngstown’s
collection of four- and five-star schools.
ACHIEVABLE HOMEOWNERSHIPThe metro’s affordable cost of living and low home prices allow 71 percent of
households to own a home, well above the U.S. rate.
GROWING CONCENTRATION OF MANUFACTURERSMatalco, Joseph Co. and other out-of-state manufacturers have recently
secured incentives to construct facilities in the metro.
The Youngstown metro is situated in the Mahoning Valley, spanning
portions of western Ohio and eastern Pennsylvania. The metro consists
of Mahoning, Trumbull and Mercer counties. The city of Youngstown is
the metro’s largest municipality and a midpoint between Cleveland and
Pittsburgh. Youngstown and the city of Warren account for a combined
107,000 citizens.
▪ The metro boasts a diverse employment base driven by the education, healthcare and manufacturing
sectors. Youngstown State University is one of the metro’s largest employers.
▪ Other major employers represent a variety of industries and include Joseph Company International,
which is constructing a beverage and technology complex in Youngstown that will produce the
world’s first self-chilling beverage. Canadian-based manufacturer Matalco recently opened an
aluminum re-melt factory in the village of Lordstown.
▪ Construction on the $900 million Lordstown Energy Center is nearing completion and a second $900
million gas-fired power plant is planned nearby.
DEMOGRAPHICS
1
ECONOMY
METRO HIGHLIGHTS
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau
DAYS INN & SUITES YOUNGSTOWN/GIRARD
2017POPULATION:
224K
2017HOUSEHOLDS:
43.8
2017MEDIAN AGE:
$44,100
2017 MEDIAN HOUSEHOLD INCOME:
U.S. Median:
378U.S. Median:
$56,3000.2%
Growth2017-2022*:
-0.8%
Growth2017-2022*:
554K
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
32
NORTH CENTRAL
Healthy Performance Gains Attract Investors to North Central Region
Business and sports support rising occupancy. Steady increases in room nights have driven occupancy and revenue metric improvements in the North Central region,
which comprises Indiana, Ohio and Michigan. In Indiana, a growing tech sector is underpinning business travel demand. As several firms expand and move to the state,
hotel occupancy, particularly during the workweek, may continue to rise from travel to interviews and business meetings. Occupancy in all three states will benefit from the
start of the collegiate school year in the fall. Travel to sporting events, particularly against rivalry teams, may support further occupancy improvement by year end.
Deal flow picks up regionally. Improving occupancy and steady growth in ADR and RevPAR during the year ending in June have heightened investor demand for hotel
properties in the North Central region. Assets in Ohio and Indiana made up the bulk of sales, with Cincinnati and Indianapolis garnering particular investor interest.
Regionally, economy and upper midscale hotel assets comprised the majority of transactions, though sales of upscale properties rose this time as several Hilton branded
properties traded.
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
33
NORTH CENTRAL
▪ Occupancy climbs regionally. Room nights of 3.9 percent outpaced the 1.3 percent increase in rooms
available during the prior 12 months, lifting occupancy in the North Central region 170 basis points to 71.8
percent in June. All states contributed to occupancy improvement during this time, with Indiana and Ohio
outperforming the region. In Ohio, occupancy jumped 200 basis points since last June to 72.0 percent as
room nights rose 4.3 percent. This increase could be attributed to the Republican National Convention
held last year. Occupancy in Indiana climbed 210 basis points to 73.4 percent, the highest rate among all
three states. Room nights in Indiana advanced 3.3 percent during the last four quarters as rooms
available ticked up marginally. Indianapolis registered a 60-basis-point increase during this time to 77.1
percent as few rooms were delivered during the last 12 months.
▪ Revenue metrics moderate. Improving regional occupancy drove increases in revenue metrics during the
last four quarters, though at a slower pace than last year. ADR in the North Central region rose 2.2
percent to $103.32 ending in the second quarter while RevPAR climbed 4.8 percent during this time.
Michigan posted the strongest ADR growth, moving up 3.6 percent to $79.69. The increase in ADR,
coupled with a 100-basis-point rise in occupancy, lifted RevPAR in the state up 4.8 percent. In Indiana,
ADR and RevPAR rose 3.4 percent and 6.5 percent, respectively. Revenue metrics in Cleveland
registered losses, slowing improvement for the state of Ohio, where ADR inched up 0.5 percent. The jump
in statewide occupancy did aid in a 3.4 percent increase in RevPAR.
▪ Bidding heats up for region’s hotels. Transaction velocity in the North Central region rose considerably as
demand for hotel properties picked up significantly in Ohio and Indiana. Increased demand for regional
hotel assets also drove up the average price roughly 4 percent during the last four quarters to $43,000 per
room. Hotels in Indiana changed hands near $57,600 per key on average.
* Forecast
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
34
HOSPITALITY RESEARCH
Investors Maintain Confidence in Hospitality Market
As Occupancy and Revenue Metrics Improve
Hotel room demand persists. The U.S. hospitality sector has recorded increases in occupancy and revenue
metrics during the year ending in June as room demand remained healthy. Employment growth nationwide and the
rising median household income will support travel in the near future. Both domestic and international travel
continue to rise, further benefiting room demand. Potential headwinds do exist including the growing construction
pipelines in many major markets that may place downward pressure on occupancy, the average daily rate and
RevPAR this year and into 2018.
• During the last 12-month period, hiring in office-using sectors rose 2.4 percent nationwide as 734,000 workers
were added to staffs. Healthy job growth and a tight employment rate of 4.4 percent bolstered medium
household incomes by 2.8 percent during this time. The rising incomes may spur additional leisure travel while
increased jobs may further business travel.
• Domestic and international passenger travel in the United States rose 3.8 percent during 2016. In particular,
international travel provides hotel operators opportunities for stronger demand drivers as passengers more than
doubled in the last three years.
• Texas and California have more than 20,000 rooms each that are expected to break ground in the next 12
months. The increased supply may place downward pressure on occupancy in the coming years.
MIDYEAR 2017
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
35
HOSPITALITY RESEARCH
Investors increasingly targeting hotels as demand drivers improve. Hotel operations that spur revenue growth have
kept buyers active in this sector. Transaction velocity rose roughly 10 percent nationwide as demand picked up for
properties in many of the country’s smaller markets. On average, hotel assets changed hands for nearly $100,000
per key, down slightly year over year as fewer properties in upper chain scales changed hands.
▪ Among chain scales, lower-tier hotels garnered significant investor attention. Trades increased considerably for
economy and upper midscale assets during the previous four quarters. Demand for upscale assets held steady
with the majority of trades in Marriott and Hilton branded properties.
▪ Several regions posted significant increases in transaction volume during the last 12 months. The Carolinas and
the Central Midwest region led the nation, with the Mid Atlantic, Mid South and Southwest regions following. In
prior years, coastal regions typically led sales volume.
▪ Sales velocity picked up for independent properties during the year ending in June as buyers widened their
acquisition expectations. The increased demand for soft brand hotels may further intensify bidding for their
properties moving forward as visitors seek experience oriented hotels.
MIDYEAR 2017
MARKET OVERVIEW
HOSPITALITY RESEARCH
36
Hotel construction pipeline on the rise. Roughly 111,000 rooms in more than 950 hotel projects were completed
nationwide during the last 12 months up to June. Moving forward, nearly 187,000 rooms are under development
and an additional 222,000 are expected to break ground in the next four quarters. The growing supply additions
may place downward pressure in occupancy over the coming year.
▪ The metros of Houston and New York City received the largest number of rooms as 4,200 and 5,400 rooms
were completed within July to June, respectively.
▪ Hilton Worldwide and Marriott International boosted their inventory during the last 12 months. Both companies
averaged between 27 percent and 28 percent increases of new hotel rooms over all supply additions.
▪ Among chain scales, the bulk of new completions were in the upscale and upper midscale segments with a
combined total of 77,000 rooms. Roughly 10,500 unaffiliated rooms were also constructed during this time.* Trailing 12 months through 2Q
MIDYEAR 2017
MARKET OVERVIEW
HOSPITALITY RESEARCH
37
Occupancy climbs amid healthy room demand. Since last June, demand for hotel rooms continued to outpace
supply growth, lifting occupancy in the United States 50 basis points to 73.4 percent at the end of the second
quarter. First half occupancy rose 40 basis points from the same time period last year to 65.3 percent.
▪ Large markets that demonstrated significant occupancy increases from last year include Norfolk-Virginia Beach,
Orlando and Atlanta. On the other hand, mounting supply pressures in metros including Dallas, Houston and
Nashville weighed on vacancy improvement in the last 12 months.
▪ Nearly all hotel chain scales posted occupancy improvements over the year ending in June. Economy chains
boasted the greatest improvement with occupancy increasing 90 basis points to 65.4 percent. The upscale
segment posted the only occupancy decrease as the rate ticked down 20 basis points year over year to 80.5
percent.
▪ Based on location, occupancy in properties in proximity to major thoroughfares climbed 100 basis points during
the previous four quarters to 66.6 percent. Room demand in these hotels typically comes from travelers passing
by. The highest occupancy rate remains in urban hotels at 80.4 percent, up 50 basis points year over year.
MIDYEAR 2017
MARKET OVERVIEW
HOSPITALITY RESEARCH
38
Room demand drives increases in revenue metrics. Rising occupancy nationwide is driving growth in revenue
metrics. During the year ending in the second quarter, the average daily rate advanced 2.1 percent to $129.12. The
increase in ADR and occupancy generated a 2.8 percent rise in RevPAR during this time to $94.73.
▪ ADR and RevPAR in independent hotels outperformed all other chain scales, rising 2.7 percent and 3.9
percent, respectively. Economy hotels followed as strong occupancy improvement and a 2.2 percent increase
in ADR drove a 3.5 percent climb in RevPAR during the last 12 months.
▪ Despite higher occupancy in urban areas, suburban hotels outperformed their counterparts in ADR and
RevPAR growth during the previous four quarters. ADR in urban hotels rose 0.3 percent while RevPAR inched
up 0.9 percent during this time. In the suburbs, ADR climbed 2.3 percent and RevPAR posted a 2.8 percent
advance.
▪ Major markets with RevPAR growth near or above 10 percent include Norfolk-Virginia Beach, Orlando, and San
Diego.
MIDYEAR 2017
* Trailing 12 months through 2Q
MARKET OVERVIEW
HOSPITALITY RESEARCH
39
Total Airport Passengers in Major Markets
MIDYEAR 2017
2016 International Visitation
▪ Passenger travel in the many of the nation’s largest
airports can highlight up-and-coming travel destinations
and the potential for improvement in hotel occupancy
and revenue metrics. The Los Angeles International
Airport registered an 8 percent increase in passenger
volume in 2016 from the prior year, making it the second
most traveled airport in the nation. During this same
time, hotel occupancy increased 100 basis points in the
Los Angeles metro while RevPAR jumped 10.9 percent
year over year. Additionally, hotels located near airports
tend to have some of the highest occupancy rates,
compared with interstate, resort, suburban and small
metro hotels.
▪ One of U.S. largest contributors to international
visitation, Brazil, was battered with political turmoil and a
recession leading to a 24 percent drop in arrivals in
2016. Many Florida markets are impacted from fewer
tourists visiting from the country and several of these
metros, including Orlando, registered occupancy
declines last year. On the other hand, the number of
tourists from China grew 15 percent in 2016 from the
prior year and that number is expected to increase. As a
result, many hotels are customizing amenities to entice
these travelers, including a hotel chain in California that
will now accept Chinese mobile payments.
Travel Highlights
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
40
HOSPITALITY RESEARCH
▪ Monetary policy in transition. Despite the Fed raising its benchmark short-term rate three times in seven months and signaling another rise before the end of the year,
long-term rates have remained stable. The yield on the 10-year U.S. Treasury bond remained in the low- to mid-2 percent range throughout the third quarter of 2017.
The Federal Reserve wants to normalize monetary policy and, in addition to raising its funds (or overnight lending) rate, has announced it will begin to taper its balance
sheet by allowing an initial $10 billion in securities to mature without reinvestment. By reducing its acquisitions of securities, 10-year Treasury rates should drift upward,
thereby widening the spread between short- and long-term rates.
▪ Increase in interest rates over the course of the year, pushing up the cost of capital. While commercial real estate fundamentals remain strong, rising costs associated
with debt financing will tighten the spread between cap rates and lending benchmarks. This environment could weigh on transaction activity as investors evaluate their
yield options. Cap rates have remained relatively stable over the last year, but upward movement in Treasury rates has amplified the expectation gap between buyers
and sellers.
▪ Capital markets remain highly competitive, with a broad assortment of fixed-rate products available. Year to date, CMBS market share has moved from a quarter of the
market up to comprising one-third of hotel lending. Loan-to-value for CMBS typically is in the low-60 percent range. Lending by national and regional/local banks
comprises a quarter of the lending activity this year with smaller loan sizes and LTV averaging from 60 percent to upwards of 90 percent for SBA products.
Capital Markets
MIDYEAR 2017
MARKET OVERVIEW
DAYS INN & SUITES YOUNGSTOWN/GIRARD
41
HOSPITALITY RESEARCH
Name State Rooms
Wyndham Garden Hotel Newark NJ 349
Clarion Orlando International Airport FL 330
Surfside Marina TX 281
Clarion Conversion KS 257
Holiday Inn & Suites Beaumont TX 253
Atrium Hotel & Conference Center KS 216
Cabot Lodge Jackson North MS 200
Crowne Plaza OH 200
A2B Budget Hotel GA 196
Fontana Village Resort NC 194
Denver’s Best Inn & Suites CO 190
Ramada Florence Center SC 190
Days Inn Birmingham South AL 159
Red Roof Inn St. Louis Westport MO 158
Holiday Inn & Suites WI 146
Clarion Inn & Suites Syracuse NY 143
Days Inn New Orleans LA 138
The Hotel Blue NM 140
Best Western Plus Westbank LA 138
Roadway Inn FL 125
Suburban Extended Stay South Bend IN 117
Days Inn Knoxville East TN 116
Holiday Inn Yakima WA 114
Motel 6 Tulsa South OK 114
2017 Marcus & Millichap Transactions
MIDYEAR 2017
PROPERTY NAME
MARKETING TEAM
DAYS INN & SUITES YOUNGSTOWN/GIRARD
DEMOGRAPHICS
Source: © 2017 Experian
Created on April 2018
POPULATION 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Population 3,091 32,640 84,955
▪ 2017 Estimate
Total Population 3,155 33,832 87,901
▪ 2010 Census
Total Population 3,203 34,592 89,610
▪ 2000 Census
Total Population 3,365 38,678 100,842
▪ Daytime Population
2017 Estimate 5,515 43,108 104,044
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Households 1,263 12,943 34,408
▪ 2017 Estimate
Total Households 1,276 13,306 35,299
Average (Mean) Household Size 2.34 2.34 2.33
▪ 2010 Census
Total Households 1,315 13,795 36,428
▪ 2000 Census
Total Households 1,350 15,125 40,050
HOUSING UNITS 1 Miles 3 Miles 5 Miles
▪ Occupied Units
2022 Projection 1,263 12,943 34,408
2017 Estimate 1,488 15,839 41,900
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
▪ 2017 Estimate
$200,000 or More 1.10% 1.47% 1.26%
$150,000 - $199,000 1.36% 1.68% 1.23%
$100,000 - $149,000 11.18% 8.10% 6.77%
$75,000 - $99,999 8.43% 9.79% 9.06%
$50,000 - $74,999 16.57% 16.27% 16.90%
$35,000 - $49,999 17.36% 15.01% 14.53%
$25,000 - $34,999 12.80% 11.99% 12.40%
$15,000 - $24,999 12.30% 14.69% 15.23%
Under $15,000 18.89% 21.00% 22.60%
Average Household Income $53,756 $51,576 $48,606
Median Household Income $42,114 $37,034 $34,800
Per Capita Income $21,904 $20,884 $20,294
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
▪ Population 25+ by Education Level
2017 Estimate Population Age 25+ 2,262 23,562 61,163
Elementary (0-8) 2.18% 2.32% 2.50%
Some High School (9-11) 8.16% 9.60% 10.21%
High School Graduate (12) 44.24% 41.01% 42.63%
Some College (13-15) 19.63% 20.54% 20.69%
Associate Degree Only 6.30% 6.62% 6.47%
Bachelors Degree Only 11.69% 11.34% 10.38%
Graduate Degree 7.55% 7.75% 6.17%
42
Income
In 2017, the median household income for your selected geography is
$42,114, compare this to the US average which is currently $56,286.
The median household income for your area has changed by 22.46%
since 2000. It is estimated that the median household income in your
area will be $47,085 five years from now, which represents a change
of 11.80% from the current year.
The current year per capita income in your area is $21,904, compare
this to the US average, which is $30,982. The current year average
household income in your area is $53,756, compare this to the US
average which is $81,217.
Population
In 2017, the population in your selected geography is 3,155. The
population has changed by -6.24% since 2000. It is estimated that the
population in your area will be 3,091.00 five years from now, which
represents a change of -2.03% from the current year. The current
population is 47.80% male and 52.20% female. The median age of the
population in your area is 44.68, compare this to the US average
which is 37.83. The population density in your area is 1,002.58 people
per square mile.
Households
There are currently 1,276 households in your selected geography. The
number of households has changed by -5.48% since 2000. It is
estimated that the number of households in your area will be 1,263
five years from now, which represents a change of -1.02% from the
current year. The average household size in your area is 2.34
persons.
Employment
In 2017, there are 3,255 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
53.42% of employees are employed in white-collar occupations in this
geography, and 48.01% are employed in blue-collar occupations. In
2017, unemployment in this area is 7.56%. In 2000, the average time
traveled to work was 21.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
68.88% White, 25.64% Black, 0.00% Native American and 1.07%
Asian/Pacific Islander. Compare these to US averages which are:
70.42% White, 12.85% Black, 0.19% Native American and 5.53%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 3.87% of the current year
population in your selected area. Compare this to the US average of
17.88%.
PROPERTY NAME
MARKETING TEAM
DAYS INN & SUITES YOUNGSTOWN/GIRARD
Housing
The median housing value in your area was $113,812 in 2017,
compare this to the US average of $193,953. In 2000, there were 929
owner occupied housing units in your area and there were 421 renter
occupied housing units in your area. The median rent at the time was
$395.
Source: © 2017 Experian
DEMOGRAPHICS
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DEMOGRAPHICS
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