offering memorandum - loopnet · 2019-10-04 · one hour from pittsburg and cleveland 4 miles north...

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.


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 02

STR

Historical P&L

5 Year Pro Forma

Acquisition Financing

MARKET COMPARABLES 03

Sales Comparables

MARKET COMPETITORS 04

Competitive Set Performance

Competitor Data

MARKET OVERVIEW 05

Market Analysis

Demographic Analysis


3


4

INVESTMENT

OVERVIEW


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

5

VITAL DATA

CURRENT YEAR 1

Price $2,250,000 CAP Rate 16.94% 15.57%

PIP $0 Net Operating Income $391,225 $350,424

Down Payment 20% / $450,000 Net Cash Flow After Debt Service

56.42% / $253,904

47.36% / $213,103

Loan Amount $1,848,000 Total Return69.74% / $313,844

60.68% / $273,043

Loan Type Proposed New

Interest Rate / Amortization

4.25% / 20 Years

Price/Room $42,453

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)

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

St Elizabeth Health Center 2,500

GE 1,570

Youngstown State University 728

William F Maag Jr Library 540

Nationa Lease 461

Northeast Ohio Corrections 450

BOARD OF MAHONING COUNTY COMMI

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

2018 Estimate Pop 3,133 33,785 87,774

2010 Census Pop 3,192 34,597 89,534

2018 Estimate HH 1,261 13,180 35,048

2010 Census HH 1,314 13,791 36,429

Median HH Income $42,434 $37,892 $35,937

Per Capita Income $22,097 $21,394 $20,861

Average HH Income $54,490 $53,270 $50,259

DAYS INN & SUITES GIRARD

OFFERING SUMMARY

53 Rooms

Highly Visible Location - Directly off Interstate (I-80)

Renovated In 2018

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 56.13 percent,

ADR of $60.29, and a RevPAR of $33.84 The hotel currently operates at 42.94 percent margins which is a net operating income $391,225.00

The Subject property generates roughly $780,000.00 in room revenues, 60 percent Occ, $59 ADR and a net operating income ranging from $370,000 - $390,000.00. 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 over a 45% (EBITDA) return year over year for the then five years.

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


#

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


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


9

OFFERING SUMMARY


10

PROPERTY SUMMARY

THE OFFERING

Property Days Inn & Suites Youngstown/Girard

Price $2,250,000

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


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 $1,848,000


Interest Rate 4.25%

Amortization 20 Years

Loan Term 10 Years

Loan to Value 82%

Debt Coverage Ratio 2.85

SECOND TRUST DEED

Loan Type All Cash

REGIONAL MAP


11

LOCAL MAP


12

AERIAL PHOTO


13

PARCEL MAP


14

Marcus & Millichap closes

more transactions than any other

brokerage firm.

12


15

PROPERTY PHOTO


16

FINANCIAL

ANALYSIS

OFFERING SUMMARY


17

PROPERTY SUMMARY

THE OFFERING

Property Days Inn & Suites Youngstown/Girard

Price $2,250,000

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


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 $1,848,000


Interest Rate 4.25%

Amortization 20 Years

Loan Term 10 Years

Loan to Value 82%

Debt Coverage Ratio 2.85

SECOND TRUST DEED

Loan Type All Cash


18

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS


STR

19

FINANCIAL ANALYSIS


HISTORICAL P&L

20

FINANCIAL ANALYSIS


HISTORICAL P&L

21

FINANCIAL ANALYSIS


5 YEAR PRO FORMA

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FINANCIAL ANALYSIS


5 YEAR PRO FORMA

23

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


24


25

MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEW

YOUNGSTOWN

FAMILY FRIENDLY

A desirable quality of life attracts many families. Draws include Youngstown’s

collection of four- and five-star schools.

ACHIEVABLE HOMEOWNERSHIP

The 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 MANUFACTURERS

Matalco, 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


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


27

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


28

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


29

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


30


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


31

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


32

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


33

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


34

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


35


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


36


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


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


2010 Census


2000 Census


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


Average (Mean) Household Size 2.34 2.34 2.33

2010 Census


2000 Census


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%

37

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


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

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DEMOGRAPHICS

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