Leesburg, VA 124 Keys Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants
Holiday Inn @ Carradock Hall 124 Keys Leesburg, VA EXECUTIVE SUMMARY OPPORTUNITY: This 124 keys, two stories, interior corridor asset is a unique hotel attached to a stately 1747 mansion home, conveniently located just two miles from Downtown Leesburg s historic district and 12 miles from the Dulles International Airport. The hotel sits on a 4.0+/- land parcel. In addition to the hotel land, an adjoining parcel (4.0+/- acres) is part of this package. The land prices in the area are ranging from $800,000 to 1 Million per acre. The land value itself is close to $8 million. The additional land, zoned for hotel use, can be used to build a premium flag such as a Marriott Courtyard or mid market extended product such as Home 2 Suites. At an offering price of $11 million, including the additional land, the project offers a significant upside and/or development opportunities. Until middle of 2011 the property operations included Food and Beverage services which created a cash drain. Since then the F & B operations has been leased out to an experienced operator. The lease income from this arrangement exceeds $ 140,000 per year. Consequently the property Net Operating Income has improved substantially in 2012. The property is located on highway 7 which is well connected to all major arteries leading to Washington DC, Northern Virginia and Maryland markets. Leesburg market offers high barriers to entry and no known new construction is planned. Major renovations to the property were conducted during 2007 2008 and the property is fully compliant with brand re-imaging for the Holiday Inn. Consequently no major PIP is expected. The Leesburg market is strong and gets its room demand from strong corporate base during the weekdays. On the weekends it gets it demand from tourists interested in exploring the historical sites, golf, shopping etc. The historical market occupancies have been in excess of 70% and the ADR is close to $100 under normal economic condition. Based on these facts, the property is capable of achieving room revenues in excess of $ 2.7 million. The property is operated as an absentee owner. During 2009 till June 2011 the ownership focused its efforts and resources on other properties within its portfolio. As a result the property revenues declined. However, from July 2011 the property management has been changed and the staff has been overhauled. As a result the property has gradually regained its market share. It is interesting to note that the during the same period the property market share of the occupancies have been steady, however, the property ADR was declining. This was due to the fact that property adopted the strategy to go after cheaper ADR business while still maintaining the occupancy levels. The STR report data from June 2011 indicates that the trend has changed and the property is making significant progress in gaining its market share. The tables on the following pages describe the property and competing properties performance. An experienced owner/management coupled with focused sales and marketing efforts and with effective revenue management, the property can reach higher revenues and net operating income. In addition, an experienced owner can increase the operational efficiencies for even higher net operating income. Once the economy improves, the property is capable of achieving revenues similar to previous years. Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants
Table 1 - Property & Competitive Set Historical Performance Property Competitive Set Occupancies 2008 56.08 63.49 2009 54.51 57.01 2010 55.16 59.59 2011 53.78 60.28 YTD Nov 2011 55.22 61.98 YTD Nov 2012 56.14 63.10 ADR 2008 101.68 102.88 2009 83.57 95.06 2010 70.07 89.92 2011 77.17 87.36 YTD Nov 2011 77.13 87.91 YTD Nov 2012 84.59 89.17 RevPAR 2008 57.41 65.69 2009 45.71 54.33 2010 39.09 54.00 2011 42.02 53.16 YTD Nov 2011 43.16 54.92 YTD Nov 2012 48.16 56.59 Table 2 Property Penetration within Competitive Set Property Occ. Index ADR Index RevPAR Index 2008 87.17 98.79 85.78 2009 96.92 87.79 85.03 2010 94.08 77.86 73.07 2011 90.17 88.20 79.32 YTD Nov 2011 90.09 87.54 78.64 YTD Nov 2012 88.52 94.78 83.83 Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants
Table 3 Property & Competitive Set Trends Property Competitive Set Avg. Room Demand/Month 2008 2,122 9,373 2009 2,058 8,399 2010 2,086 8,778 2011 2,105 8,902 YTD Nov 2011 2,080 9,126 YTD Nov 2012 2,117 9,330 YTD Nov 2008 2,173 9,679 Trend 2008 vs. 2009-2.98-10.39 Trend 2009 vs. 2010 1.36 4.51 Trend 2010 vs. 2011 0.87 1.42 Trend Nov - 2011 vs. 2012 1.75 2.23 Trend YTD Nov - 2008 vs. 2012-2.60-3.61 Avg. ADR 2008 101.68 102.88 2009 83.57 95.06 2010 70.07 89.92 2011 77.17 87.36 YTD Nov 2011 77.13 87.91 YTD Nov 2012 84.59 89.17 YTD Nov 2008 103.36 103.57 Trend 2008 vs. 2009-17.81-7.60 Trend 2009 vs. 2010-16.15-5.40 Trend 2010 vs. 2011 10.13-2.85 Trend Nov - 2011 vs. 2012 9.67 1.44 Trend YTD Nov - 2008 vs. 2012-18.16-15.65 LOCATION: The property address is 1500 East Market Street, Leesburg, VA 20176 GUEST AMENITIES: 124 tastefully decorated rooms and suites with the amenities such as Free hi speed wireless internet, Free Newspaper, Phones with voice mail and data ports, Microwave and mini Refrigerator, Cable/Satellite TV, Work Desk with Lamp etc. A total of four state of the art meeting and banquet rooms with nearly 7,000 sq. ft space. Two restaurants offering casual dining in contemporary theme. A newly renovated lounge with intimate settings. Business Center, Fitness Room, Outdoor Swimming Pool, Guest Laundry are some of the other amenities are offered. In addition to onsite restaurant and lounge, a wide selection of eating establishments and other amenities are within walking distance of the property. Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants
The property is served with public sewer, water, and gas. OTHER AREA HOTELS: Table 4 Competitive Set Hotel # of Keys Days Inn Leesburg Downtown 80 Best Western Leesburg Hotel & Conf Center 99 Comfort Suites Leesburg 80 Hampton Inn Suites Leesburg 101 No known new construction planned. AGE AND CONDITION: Built in 1747 and major overhaul completed in 1986 and 2006-2007. No major PIP is anticipated. ACRES: 8.0+ acres, conforming use. The land prices in the area, with conforming zoning, are app. $ 1,000,000 per acre. FIXED COSTS: Real Estate taxes app. $50,000; Insurance app. $30,000. AREA INFORMATION: Loudoun County is part of the Washington Metropolitan Area. It was the fourth fastest-growing in the United States in 2008. Leesburg is the County seat. As of 2007, Loudoun County has the highest median household income in the United States at $107,207, beating neighboring Fairfax County at $105,241. The two counties have been trading places as the wealthiest county in the US in recent years. The County has targeted several important industry clusters for future economic development: Information & Communications Technology, Aerospace and Federal Government Contracting, Life Sciences, International and High-Value Agriculture. In addition to these clusters, the County boasts a significant presence in Transportation and Warehousing because of Washington Dulles International Airport in the County. FINANCIALS: Holiday Inn Leesburg @ Carradoc Hall 2012 2011 2010 2009 2008 Gross Revenues 2,163,352 2,350,406 2,309,449 2,953,044 3,618,693 ADR 85.07 78.16 69.90 85.41 102.68 % Occupancies 55.03 54.22 56.69 54.42 56.71 RevPAR 46.82 42.38 39.62 46.48 58.23 Net Operating Income (NOI) Adjusted 837,336 715,377 444,513 765,358 912,179 YTD Nov 2012 OFFERING PRICE: $10,000,000 (Including additional 4 acres land parcel) Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants
LOCATION Holiday Inn @ Carradock Hall MTEL Consultants MTEL Consultants