70 Unit Country Inn & Suites – New Construction



Project Overview

New Construction 89 Unit Holiday Inn Express

Webster, TX

Hotel Summary

The 89 unit prototype Holiday Inn Express will be 4 story interior corridor hotel with 2 elevators, indoor pool (in free standing adjoining building), exercise facilities and standard king/queen rooms.

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Holiday Inn Express, the fastest-growing hotel brand in the limited-service category, led all IHG brands with 503 properties in the Americas development pipeline last year. There are over 1600 locations worldwide now.

This property will be located in Webster, TX on I-45 on 2.1989 acres. Specifically, it will be located on a tract of land located in the Robert Wilson Survey, Abstract Number 88, City of Webster, Harris County, Texas and being out of 27.443 acres and part of Unrestricted Reserve “A”, Re-plat of Reserve F, G, H and a Partial re-plat of Reserve I of BAYPOINTE, a sub-division as shown on the plat thereof recorded at Film Code Number 458136 of the Harris County Map Record, also being out of 27.4679 acre tract of land as described by a correction Special Warranty Deed recorded under Harris County Clerk’s File Number V81849.

Webster Market

Webster, TX has become the Aerospace capital of the Southwest, the Retail Capital of the bay area, and the medical center of the bay area. It is the fast developing area south of Houston.

It is located between Houston and Galveston the city of Webster, Texas and holds the title of “Gateway to NASA and the Bay Area.” Situated near the Johnson Space Center, Webster and the surrounding Bay Area have been growing steadily since the building of the Space Center in the 1960’s. Technological advances including up-to-date computer systems in the city and a geographical information system have added to the residential and commercial growth in Webster. It is a super-regional market consisting of 3,200,000 people within 30-mile radius. The major corridors: Interstate 45, NASA Parkway Bypass, Bay Area Boulevard, NASA Parkway, and Highway 3.

Webster has the top suburban mall within the Houston MSA, Baybrook Mall and is home to NASA-Johnson Space Center. Its sales tax base with per capita sales nearly five times the national average. It has over one-hundred restaurants, over 24 entertainment venues, and has the highest-ranking performance for companies regionally, nationally, and internationally in myriad areas: medical, retail, entertainment, and aerospace.

Webster is located less than 15 miles from Houston Hobby Airport and includes the following major developments:

Major Medical Developments

• Clear Lake Regional Medical Center

• Clear Lake Rehabilitation Hospital

• Cornerstone Hospital of Houston

• Deke Slayton Cancer Center

• HealthSouth Diagnostic Center

• Heart & Vascular Hospital

• Houston Physicians Hospital

• Medical Plaza at Clear Lake

• The Point Rehabilitation Hospital

• St. Luke’s Clear Lake Hospital

• Triumph Hospital-Clear Lake

Retail Centers

• Bay Area Plaza

• Bay Area Square

• Baybrook Shopping Center

• Baybrook Gateway

• Baybrook Passage

• Baybrook Square

• BayWay Village II

• The Boulevard

• Challenger Plaza

• Clear Lake Center

• Marina Gate

• Point NASA

• Roberts Design Center

• Shops at the Bay

• Village Real

• Webster Plaza

• Webster Town Center

Major Aerospace Companies

• Ad Astra Rocket Company

• Boeing

• Lockheed Martin

• Raytheon

• Spacehab

• United Space Alliance

Tourism Partners

• Space Center Houston

• Bay Area Houston Convention and

Visitors Bureau

• Greater Houston Convention and

Visitors Bureau

• Galveston attractions: Moody

Gardens and Schlitterbahn

• Kemah Boardwalk

• Gulf Greyhound Park

Competition

There are numerous hotels in Webster currently and several more under construction. Many of these hotels do not compete directly with the Holiday Inn-Express. The upper mid-scale hotels perform extremely well currently with occupancy rates averaging above 75%. The list of hotels include:

• America’s Best Value Inn

• Best Western

• Comfort Suites

• Days Inn & Suites

• Extended Stay Deluxe

• Hampton Inn & Suites

• Hilton Garden Inn (forthcoming)

• Holiday Inn and Suites (under

construction)

• Hyatt Place (forthcoming)

• InTown Suites

• La Quinta Inn & Suites

• Motel 6

• Oxford Inn & Suites

• Quality Inn

• Springhill Suites (forthcoming)

• Staybridge Suites (under

construction)

• Super 8

Project Cost Estimate

We expect that the all-in price of the new construction will be approximately $7.1 million.

Future Cash Flow and Debt Coverage

We believe that the Holiday Inn Express will average $1.78 million in revenue after rampup and the NOI will be in the range of $800,000. Debt coverage ratio will be approximately 1.4.

Developer Overview

The developer will be Ajay Patel in the name of an LLC to be determined.

Ajay Patel (MBA – Marketing and General Management)

Ajay has been in the hotel industry since 1978 and has had a wide variety of exposure to the industry. Ajay has strong management skills and has considerable hotel development and management experience. Ajay’s recent hotel experience includes:

Best Western, Webster, TX: Ajay acquired the financing, and hired and trained the initial staff.

Pika Management LLC: Ajay started the management company that manages several hotels in his portfolio. He set up the operations to manage and control the hotels centrally, perform centralized accounting, and review and manage property level quality assurance.

Comfort Inn, Cranberry Township, PA: Ajay acquired the financing, supervised the complete renovation, developed and implemented the marketing plan, hired and trained the initial staff and started up.

Comfort Inn, Butler, PA: Ajay acquired the financing, set up the operations, recruited the management team, and developed and implemented the marketing plan.

Country Inn & Suites, Fairborn, OH: Ajay identified the site location, performed the feasibility analysis, and obtained franchising, subdivided plot, re-zoned and obtained permits for construction., attained financing and construction contract. He assisted in startup activities.

Country Inn & Suites, Macedonia, OH: Ajay acquired the financing, supervised the construction, developed and implemented the marketing plan, hired and trained the initial staff and started up the operation in November of 2000. The construction was completed without cost over-runs and was only one month delayed from initial startup estimates. This successful operation provided a debt coverage ratio of 2.0 in the first year of operation under Ajay’s leadership and strong focus on marketing, sales and cost control.

Days Inn-Huber Heights, Huber Heights, OH: Ajay developed the financial projections, the loan package for the new construction, managed the loan approval process, and developed the marketing plan for the property. He also assisted with the startup of the operation in 1996.

Ajay currently has significant ownership stakes in the Comfort Inn – Cranberry, PA, Country Inn & Suites – Fairborn, OH, the Best Western-Webster, TX, and the Hampton Inn-Melbourne, FL.

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