Hodges Ward Elliott is pleased to present for your consideration the sale of the fee-simple interest in the 146-room Holiday Inn Express Houston South Medical Center (“Hotel” or "Property"). As one of the newer lodging products in the market, the 2016-built Property is currently undergoing a soft-goods renovation, delivering a freshly renovated product upon sale. Optimally positioned next to NRG Park (home of the Houston Texans) and near the 1,345-acre Texas Medical Center (“TMC”), the largest medical complex in the world and eighth largest business district in the country, the Hotel is a primary benefactor of the district’s year-round, captive demand.
The offering presents investors with an exceptional opportunity to acquire premier, fee-simple real estate in an A+ location adjacent to NRG Park and just minutes from the world-renowned TMC. The Holiday Inn Express is offered free and clear of debt and unencumbered by management.
INVESTMENT HIGHLIGHTS
Premier, High Barrier Location Neighboring World’s Largest Medical Complex
The Property features a premier location, proximate to the Texas Medical Center, delivering superior accessibility and optionality for the more than 15 million visitors to the district each year. This fee-simple, premium-branded asset located among the world’s largest medical campus represents impeccable real estate, providing immense value to a prospective investor. Further, as a global industry leader in medical care and research, the TMC only continues to expand, currently in the midst of more than $3 billion in new construction projects.
106,000+ employees
50+ million SF
10 million annual patients
World’s largest children’s hospital – Texas Children’s Hospital
World’s largest cancer hospital – MD Anderson Cancer Center
8th largest business district in the U.S. (1,345 total acres)
$3 billion in new construction projects underway
Recently Renovated Asset Offering Notable Upside
The next owner will benefit from significant capital improvements, with $1.4 million (±$10,000/key) in capital invested to refresh the already recent vintage Hotel. A new owner is positioned to realize a meaningful ramp in performance and market share, with little to no additional capital expenditure required.
Substantial Discount to Replacement Cost
Considering the Hotel’s prominent TMC location, which provides additional proximity to NRG Park, coupled with today’s escalating construction costs, a comparable hotel project would take several years to develop and likely cost well in excess of $300,000 per key.
Resilient Performance + Ramping Cash Flows
The Holiday Inn Express has historically produced ample cash flow, with both Year-End 2023 and 2024 TTM total revenue approaching $5.0 million (±$91 RevPAR). As a testament to the resiliency of both the asset and market, the hotel has bounced back sharply post-COVID. For Year-End 2022, the Holiday Inn Express posted RevPAR growth of 17.3% over 2021 levels. This resurgence continued in 2023, with Year-End RevPAR up another 21.3%. While the Property offers investors an inflationary hedge, the opportunity exists to step into rapidly accelerating operations, build on in-place momentum, and participate in the unrealized renovation upside created by current ownership.
Houston - Global Economic Epicenter
The nation’s fourth largest city and fifth largest metropolitan area, Houston covers nearly 10,000 square miles and is home to over 3.1 million jobs. It is a global gateway city, boasting a history of impressive GDP, population and employment growth. Its citizens’ storied history of philanthropy has led to the creation of, among other things, the Energy Capital of the World, largest medical center in the world, the largest U.S. export port and a globally renowned arts hub. As further testament to the city’s prominence on the global stage, Houston has sky-rocketed toward the top of countless charts since the onset of Covid, including #2 Fastest Growing Tech Hubs Amid the Pandemic (Axios), #1 Top Corporate Destination City (Allied Van Lines), #1 Most Diverse City in America (Wallet Hub), #3 Best U.S. Metro for Corporate Relocation and Expansion (Site Selection) and #3 among Tier 2 Cities of the Future (fDI Intelligence).
Dominant Brand & Distribution System
Operating under the Holiday Inn Express flag, the Hotel is backed by IHG, one of the strongest brands in the lodging industry, providing a highly rated reservation system and access to over 100 million members. IHG is known to have a tremendously loyal customer following and appeals to a variety of consumer segments that provide strong room night demand every day of the week.
Optimal Offering - Fee Simple, Non-Union, Unencumbered of Debt
The Hotel is operated with non-union labor, offered fee simple and free and clear of debt, affording a new owner utmost optionality in the operation and capitalization of the Property.