Extended Stay Hotel, 80 Suites, Houston

At $8,000,000 across 80 suites this is $100,000 a key, and that is a number that needs a reason behind it. Here the reason is the demand, not the building.

• The Texas Medical Center is the largest medical complex in the world, and it generates a type of demand most hotels never touch: long stay patients, families of patients, rotating clinical staff and medical corporate travel.
• That demand does not move with the business cycle the way airport or convention demand does. People do not postpone cancer treatment because the economy softened.
• Four floors, 45,932 square feet, on 1.41 acres, under an IHG affiliated extended stay flag.

Three things I would check before writing an offer

• The property improvement plan, because at this price it decides the deal. A change of ownership triggers a brand review: soft goods, case goods, bathrooms, the lobby, sometimes the exterior. On extended stay the kitchenettes make it worse, because appliances, cabinetry and plumbing in every unit add a line most buyers forget. I have seen PIPs land anywhere from $8,000 a key to $25,000. On 80 suites that is a swing of more than a million dollars. Get the scope in writing from the brand before you agree a number, not after.
• How concentrated the medical demand actually is. Proximity to the Medical Center is the thesis, so test it. Is the business coming from a dozen referring institutions or from one hospital relocation programme, one insurance placement or one construction project. Ask for length of stay and the top accounts. Concentration is the one thing that turns recession resistant demand into ordinary demand overnight.
• How far away it really is, in traffic. South Houston is a wide area and the Medical Center premium falls off quickly with drive time. Fifteen minutes at 2pm is forty at 8am. Drive it at shift change before you accept the submarket argument.

Who it fits

• An operator who already runs extended stay and understands the money is made on cost control and renewals rather than on rate.
• A buyer who wants the least cyclical demand profile available in Texas hospitality and will pay for it.

Who it does not fit

• A first-time hotel buyer. Eight million dollars and a brand standard is a long way from where most people start.
• A buyer who has not priced the PIP before agreeing a number. At $100,000 a key there is no room for a surprise.

Financing

• SBA 7(a) and 504 both fund owner-operated hotels, though at this size most buyers end up in a 504 structure or a conventional loan with an SBA piece.
• The lender will want brand approval, the PIP estimate and the trailing financials.
• 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

Operating numbers, length of stay, the account mix, trailing financials and franchise documents are released after a signed NDA is verified.