CBRE Hotels presents the opportunity to acquire the fee-simple interest in the 120-room Hampton Inn located in Columbia, MO. Strategically located along Interstate 70 at the Highway 63 interchange, the Hampton Inn commands excellent visibility and accessibility, and is within walking distance to nearly ten restaurants along Clark Lane, which parallels Interstate 70.
It’s I-70 location within two hours of both Kansas City and St Louis, makes Columbia an ideal stopover point for highway travelers, helping drive significant walk-in demand for the Hampton Inn. Furthermore, the Hampton Inn is located within three miles of the University of Missouri, the largest employer in Columbia. With over 31,000 students and over twenty Division I athletic programs, the Hampton Inn benefits greatly from higher rated lodging demand from major university events including home football games and graduations, among others.
Investment Highlights
Dynamic Location
The Hotel is located at the intersection of Interstate 70 and Highway 63, commonly referred to as the “Main Street of America”. The Hampton Inn is nearly equidistant to Kansas City and St. Louis, driving strong traffic counts and consistent walk-in lodging demand. Moreover, the Hotel is in proximity to several colleges and universities, including the University of Missouri, as well as numerous hospitals and Columbia’s largest corporations. The diverse economy, headlined by the University of Missouri, creates a stable and diverse economy, which creates a true seven day per week lodging market for Columbia hotels including the Hampton Inn.
University of Missouri
The University of Missouri is home to a student population of over 31,000 and an employment base of nearly 23,000, Mizzou is considered one of the premier universities in the Midwest region. The University offers over 300 degrees across 13 degree granting colleges and has been recognized for outstanding programs in the studies of business, health services, and journalism. Furthermore, Mizzou offers over six hundred student organizations, forty intramural clubs, and twenty Division I sports teams. The University of Missouri will remain a stable source of growth for the greater Columbia area while supporting the community with well educated workers all of which will benefit local area hotels, including the Hampton Inn.
Strong 2022 Performance
Consistent with many other hotels located in university markets, 2022 proved to be a strong year for the Hampton Inn. The asset realized a significant increase in performance, realizing revenue and income above the levels achieved in 2019. For year-end 2022, the Hampton Inn achieved a $92.46 RevPAR, driven by occupancy of 72 percent and an ADR of $128. The Hotel’s strong performance increase stemmed from both an 8 percent gain in occupancy coupled with a $13 lift in ADR to $128. The ability of the Hampton Inn to drive consistently strong RevPAR index levels versus the competitive set is a direct result of its historically local market reputation, brand, dominant I-70 location, and the strong on-site executive team, which has been at the Hotel for over a decade.
Opportunity to Increase ADR Through Renovation
While the RevPAR levels achieved at the Property in 2022 were quite impressive, there is an opportunity to drive topline performance by completing the manageable change of ownership PIP. As of year-end 2022, the Property achieved an ADR of $128. With new ownership completing the manageable change of ownership PIP, which includes a soft goods renovation in the lobby and guest rooms, the Property will be positioned to offer the newest room product in the market. This will enable management to drive higher ADR and better capitalize on its strong occupancy index versus the competitive set by growing its weekday ADR index of 102 percent and surpassing the competitive set on weekends, as the Property trailed the market by nearly five dollars in 2022.
Minimal Change of Ownership PIP
The Hampton Inn is in excellent condition since completing a comprehensive renovation in 2017. As a result, new ownership is expected to secure a long-term license from Hilton through completion of a manageable PIP. The key items required for new owners are expected to include expanding and renovating the fitness center, exterior signage work, and a soft-good refresh in the guest rooms and lobby. This non-invasive PIP will allow a new owner to capitalize on the robust performance of the Property without being burdened by of disruptive CapEx requirements.
Powerful Brand and Highly Regarded Reservation System
The Hampton Inn is one of Hilton’s top brands and one of the most desirable limited-service hotel brands worldwide. The brand has over 2,715 properties worldwide, totaling more than 290,250 rooms. As one of three Hilton branded properties in Columbia, the Hampton Inn is well positioned to capture loyal Hilton Honors members seeking lodging accommodations.
Long Term License Agreement
New Ownership is anticipated to get a 15-year license term with the completion of the change of ownership PIP. This will drive overall investment returns and will enable new ownership to get better long term financing on the Property.
Unencumbered of Management
The Hampton Inn is being offered unencumbered of management, which will allow a new owner to implement its own business plan to capitalize on the impressive operating metrics achieved by the current operations team driving even stronger RevPAR and NOI levels achieved at the Property.
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