Boutique Hotel CAP & Pro Forma Support

[AJ Wong]

Greetings BP,

I'm working on a market analysis for a boutique coastal hotel, as we're under an NDA at present I can disclose limited deets. 

Closed public comparable sales are somewhat limited and subjective so I was hoping to gain some additional insight and perspective from those with sales, investment, representative or even lending experience on similar properties. Or any particulars you look for when evaluating a pro forma? 

It is a class Bish self-managed hotel under 20 rooms. As I can tell common CAP rates for similar properties fluctuate between 10-14% with per door averages of $1-200k..

Very strong and consistent cash flow, low vacancy rates and +/- 50% operating costs. We've tentatively established a CAP of 11% for a potential listing price. The listing is expected to be active in early 2023.

I have a local credit willing to offer financing for a new qualified buyer at 75-80% LTV over 25 years, or the owner(s) will potentially carry with 35% down..

Look forward to your input, stories and scenarios.