Economy Extended Stay Hotel, Texas

At $6.5 million this is an economy extended-stay hotel in a major Texas metro, and the first thing to notice is that it is the dearer of two similar properties we are carrying.

• The other one asks $5.75 million for the same brand and the same segment.
• A $750,000 spread between comparable assets is not noise. It is more rooms, better condition, a stronger corner, or a seller who has not yet tested the market.
• Working out which of those it is should be the first hour of your diligence, not the last.

Three things I would check before writing an offer

• The price per key, before anything else. Extended stay is bought and sold on rooms, and the room count settles an argument faster than any pitch does. Work out what $6.5 million buys per key here, then do the same for every economy extended-stay trade you can find in the metro over the last two years. If this one sits at the top of the band, the rest of your diligence is about finding out why. If it sits in the middle, you are looking at an ordinary deal and you can move faster than the buyer who is still guessing.
• The rooms themselves, in person. Extended-stay units carry kitchenettes, and kitchenettes mean appliances, cabinetry and plumbing in every room, used by guests who are living in the space rather than passing through. This is where deferred maintenance hides, because it is spread thinly across the whole property instead of sitting in one obvious place. Walk a dozen units, not the two the manager wants to show you. Then ask the brand for the property improvement plan scope in writing, because at this basis a heavy PIP is the difference between a fair price and an expensive one.
• Length of stay, and who is behind it. Extended-stay occupancy looks excellent on paper, because long-stay guests fill rooms for weeks at a time. What the occupancy number does not show you is the source. A property running on one large contract, a single construction project or an insurance placement is one phone call away from a very different year. Ask for length of stay and the top accounts before you ask for anything else.

Who it fits

• An operator who already runs extended stay and understands that the money here is made on cost control and renewals, not on rate.
• A buyer who wants the flattest occupancy curve in the hotel business and will accept a lower nightly rate to get it.

Who it does not fit

• Anyone planning to run it like a transient hotel. The staffing, the housekeeping cycle and the sales effort are all different.
• A first-time buyer at this size. The price is a long step up from where most people start.

Financing

• Extended-stay hotels are eligible for SBA 7(a) and 504 where the buyer will operate the property.
• The lender will want brand approval, the PIP estimate and the trailing financials. Lenders tend to look favorably on the flatter revenue profile.
• Under the rules effective October 1, 2026 the equity injection is 10 percent of total project cost, and on a special-purpose asset like a hotel a 504 lender can look for 15.

Not a commitment to lend. Subject to lender underwriting. Terms vary by borrower.

Next step

Room count, length of stay, guest mix, operating numbers, trailing financials and franchise documents are released after a signed NDA is verified. Sign it and they come to you by email.