HomeTowne Studios Houston Northwest
Hospitality | 145 Keys
Marketing description
HREC Investment Advisors and the Owner encourage potential investors to conduct their own research and analysis in the fee-simple interest HomeTowne Studios Houston Northwest ("Hotel" or "Property"), a 145-guestroom extended-stay hotel located at 5959 Guhn Rd, Houston, TX 77040. The Hotel maintains a premium location within the economically diverse Houston area and benefits from historically strong cash flows with opportunity to improve operating margins to industry standards.
The Hotel has experienced historically strong cash flows, with room for improvement. The Property has consistently earned revenues over $1.6 million since 2022, consistently outperforming the market in terms of occupancy. New management is well positioned to unlock meaningful bottom line growth through operational efficiencies that current ownership cannot effectuate across their national portfolio. Under new regional oversight, occupancy has averaged ~85%+ since February.
The Hotel features a highly accessible and strategically positioned location directly off of U.S. Route 290, which runs east-west and primarily connects Houston with Austin. Houston's diverse economy—anchored by manufacturing, energy, and healthcare, as well as being home to 26 Fortune 500 headquarters—has seen strong, sustained growth.
Investment highlights
- Historically Strong Cash Flows with Opportunity to Improve Operating Margins to Industry Standards - The Hotel has experienced historically strong cash flows, with room for improvement. The Property has consistently earned revenues over $1.6 million since 2022, consistently outperforming the market in terms of occupancy. New management is well positioned to unlock meaningful bottom line growth through operational efficiencies that current ownership cannot effectuate across their national portfolio. Under new regional oversight, occupancy has averaged ~85%+ since February.
- Significant RevPAR Upside Following Completion of Change-of-Ownership PIP - The Hotel is currently underperforming in ADR market penetration and will require a standard change-of-ownership PIP upon acquisition. Renovating the Property to current HomeTowne Studios' standards will allow a new owner to increase the rate and further penetrate the market. Competitive key money and PIP packages from other extended stay brands upon request.
- Premium Location - The Hotel features a highly accessible and strategically positioned location directly off of U.S. Route 290, which runs east-west and primarily connects Houston with Austin.
- Houston's Dynamic Economy - Houston's diverse economy—anchored by manufacturing, energy, and healthcare, as well as being home to 26 Fortune 500 headquarters—has seen strong, sustained growth. Over the past decade, significant private investment has transformed the city into a leading hub for innovation and business. From 2021 to 2023, the city led U.S. metros in GDP growth, expanding 25.1%. It continued to grow by 10.6% in the past two years.
- Extended Reach Brand Affiliation - Red Roof, an award-winning leader in the economy lodging industry, is recognized for creating an innovative economy segment, serving millions of guests each year. With coast-to-coast locations, Red Roof has over 700 properties in the U.S. and has expanded internationally to Canada and Japan. HomeTowne Studios, Red Roof's newest sub-brand, offers guests the "Basic Essentials for a Long-Term Stay" and benefits from the increasing demand for extended-stay products in addition to Red Roof's strong brand equity, attributes, and proven support system.
- Fee Simple Asset Offered at a Discount to Replacement Cost - The acquisition of the Hotel represents an opportunity for investors to acquire the fee simple interest in an economy-branded extended stay hotel, well below replacement cost with significant revenue and expense upside.
- Offered Unencumbered by Management and Debt - The Property is offered free and clear of a management contract and unencumbered by debt. A new owner/operator has the opportunity to revamp the operational strategies of the Hotel, implement new marketing and strategic cost control initiatives, and employ more aggressive revenue management strategies.
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