Hotel Development Opportunity Southington, Connecticut
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HHotel DDevelopment OOpportunity Southington, Connecticut *CONFIDENTIAL* Exclusive Representative Joe McCann Certified Hotel Broker OOptimum HHotel BBrokerage 733 Rowland Road Fairfield, CT 06824 (203) 254-3904• Fax (203) 319-9910 [email protected] Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Hotel Development Opportunity Interstate 84 and Route 10 (Queens Street) Price: $650,000 Southington, Connecticut 06489 Executive Summary The development site being offered is a 4.2-acre parcel and landscaping. The northern section of the parcel near in the Town of Southington, Connecticut, a growing its entrance at Interstate Drive, could also possible corporate, residential, and retail market about 20 miles accommodate a small retail strip center. west of Hartford. The parcel is strategically located at The Southington market is an attractive location for the juncture of Interstate 84 (Exit 32) and Route 10 lodging development. In 2002, the market achieved (Queens Street). The Interstate 84 corridor in the 69.6% occupancy at an $86.82 average daily rate Northeast US has grown to be a prized artery for hotel ($60.43 RevPAR). Despite the fact that supply was development, and other I-84 markets such as Newburgh increased by 16% due to the July 2002 opening of the and Fishkill in New York State and Danbury and 96-unit Residence Inn by Marriott, lodging demand grew Hartford in Connecticut have experienced impressive by 18% over 2001. Average daily rate in 2002 grew by increases in lodging demand over the past 15 years. It is 4.3% over 2201, and gross hotel revenues in the difficult in Connecticut to locate Interstate hotel sites competitive set grew by over 22%. with such excellent access, visibility, and such proximate access to restaurant and retail development. The immediate competitive set of the proposed hotel consists of five other properties at Exits 32 and 31 of I- The level, irregularly-shaped parcel fronts the 84. Three of these properties (about 75% of the westbound lane of I-84 (about 600 feet from the competitive inventory) are exterior corridor, re-branded westbound Exit 32), and is visible from interstate in both hotels built in the 1970’s. It might be reasonable to directions. Exit 32 provides entrance and exit ramps in assume that a newly constructed, well-branded, interior both eastbound and westbound directions. This busy corridor hotel highly visible and accessible from I-84 section of I-84 averages over 77,000 average vehicles per would achieve a high degree of market penetration and day. Queen Street, which averages over 30,000 vehicles rate premium. per day in front of the proposed development, is the major retail artery on the Southington area. The owner of this site is an experienced regional real estate developer who has developed many of the sites in The immediate area of the proposed hotel development the hotel’s immediate area. He has committed to assist along Queen Street has been a successful location for the buyer directly in securing any engineering and retail (Home Depot, Blockbuster, Staples, Shaw’s, governmental approvals for the project. Bernies) and restaurant (Outback, Chili’s, Bertucci’s, Denny’s, McDonalds) development. Numerous A number of limited service, extended stay, and restaurants are within walking distance to the hotel site. upscale franchises are available in the market, and the site has garnered considerable interest from national lodging An initial plan for the site might include a three or brands. The project has also attracted interest from four-story mid-scale or suite franchise lodging facility, lenders, who have expressed a desire to place the and numerous franchises are available in the market. construction and permanent financing of the hotel. The site could accommodate roundly 70 to 90 units (40,000 to 55,000 square feet) with appropriate parking Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 2 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Investment Considerations To properly assess the investment potential of this hotel development opportunity in Southington, Connecticut investors should consider these important factors: ¾ The 4.2-acre site is a highly visible and accessible from both directions of Interstate 84 at Southington Exit 32 ¾ Interstate 84 and Route 10 supply high traffic volume to the site. I-84 averages over 77,000 vehicles per day at Exit 32, and Route 10 averages over 30,000 vehicles per day at the development’s entrance ¾ Many prominent extended-stay, and mid-scale national hotel brands are still available in the market ¾ The immediate competitive marketplace is characterized by dated, exterior- corridor hotels built in the 1970’s, so a new construction product could achieve a high degree of RevPAR premium ¾ The development is approved for hotel development and initial estimates suggest that the site could accommodate roundly 80 guest rooms or suites ¾ At roundly $200K per acre, the land cost is considerable below similar sites in Connecticut, where land prices, soft costs, site preparation costs, and high barriers to entry inhibit lodging development ¾ The Southington market is strong, with diverse corporate, government, educational, and leisure demand generators ¾ The Route 10 (Queen Street) corridor has experienced strong retail development over the past five years, and has become the preferred location for retail and restaurant development ¾ There could be the possibility that the 4.2 acre site could accommodate additional retail or restaurant lease income ¾ The State of Connecticut and the Town of Southington offer investors favorable tax rates and numerous economic development incentives Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 3 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Area Site Plan Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 4 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Site Plan for 80-Unit Hotel Average Daily Traffic Counts (ADT) in Area of Hotel Development Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 5 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Aerial Site Plans Aerial Picture of Site and Exit 32 of Interstate 84 Close-up Aerial of Development Site Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 6 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Hotel Market in Southington, Connecticut Competitive Set Lodging properties in direct competition to the proposed There are 5 hotels that will comprise the subject hotel site are, with the exception of the Residence Inn, exterior development’s direct competitive set. They are all located corridor, re-branded products originally built in the on Exits 31 and 32 on I-84 in Southington. The proposed 1970’s. One could expect that a new construction, hotel will also compete, to a lesser extent, with full service interior corridor, suite or mid-scale product to achieve a and limited service hotels in Bristol (Radisson) and high market RevPAR penetration. At publication of this Plainfield (Ramada), along with a few minor independents offering package, no hotels are under construction or in the in the general area. development pipeline in the immediate market. Property Rooms Rates Amenities 1. Motel 6 124 $55/$59 2. Travelodge 72 $59/$75 E 3. Howard Johnson Express 148 $69/$85 C, E 4. Holiday Inn Express 122 $79/$119 A, B, C, D, E 5. Residence Inn 94 $104/$119 C, D, E Amenity Codes: A = Restaurant(s), B = Lounge(s), C =Swimming Pool, D = Exercise Facilities, E = Complimentary Continental Breakfast Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 7 Exclusive Offering - O ptimum H otel B rokerage Hotel Development Opportunity – Southington, Connecticut Competitor Summary Motel 6 This 124-room, exterior entry, two-building, two- 625 Queen Street story, property is the closest to the proposed Southington, CT 06489 development site, with convenient access to Queen (860) 621-7351 Street. Originally opened as a Six-Pence Inn in the 1970’s, it has recently undergone renovation. Rooms and amenities are standard to the Motel 6 brand. Double rates range from $55 to $59. Travelodge This two-story, 72-unit, exterior entry property 30 Lansing Street originally opened as a Howard Johnsons in the 1970’s. Southington, CT, 06489 The hotel is situated across from the Howard Johnson (860)-628-0921 Express on Queen Street. The property includes amenities standard to Travelodge, plus a small meeting room. Room rates range from $59 to $75. Howard Johnson Express This two-story hotel, originally built as a Susse Chalet 462 Queen St. in the 1970’s, is located just south of the I-84 and Southington, CT, 06489 Queen Street intersection. The property, renovated 860-621-0181 in 2001, has 148-rooms (with about 32 being interior- entry) and outdoor swimming pool. Rooms rate at the hotel range from $59 to $75. Holiday Inn Express Originally opened as a Comfort Inn, this 122-unit, 120 Laning Street. interior corridor hotel was converted to a Holiday Inn Southington, CT 06489 Express in the mid-90’s. The hotel was renovated in (860)-276-0736 2001, and features complimentary continental breakfast, high speed internet access, and an outdoor pool. Rate range from $79 to $119. Residence Inn This 4-story, 94-suite hotel, located at Exit 31 of I-84, 778 West Street opened in 2002. All units are equipped with kitchen Southington, CT 06489 and high speed internet access. Hotel amenities (860) 621-4440 include two meeting rooms, spa, and sports court. Rates at the hotel range from $104 to $119. Optimum Hotel Brokerage Optimizing Value in Hospitality Assets Page 8 .