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MOTEL/HOTEL/RESTAURANT/CONFERENCE CENTER APPRAISAL

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Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
I got a request a few minutes ago to appraise a large motel-restaurant-small conference center. I have no intention of doing it but thought it would make an interesting discussion. Was formerly a Holiday Inn converted to very upscale restaurant/motel. Conference center is across the road on a separte parcel. There is a flurry of new motels going up in this area due to a race tract complex. I haven't been involved in a motel deal in a very long time and don't have the time or staff but any ideas on doing this type assignment? The reason for my interest is that I had lunch with a large HVAC contractor and he was telling me that the motel he is working on has to be finished by April 1st or there is a flat $25,000 penality and $1,000 per day after that and a $25,000 bonus if completed ahead of schedule. Sounds like a hot market to me. I walked back to my office and got this call. Coincidences make me nerous. Also did more business this week than I have done in a week in my appraisal career. That makes me nervous too. I am trying to slow down and the merry-go-round is speeding up.
 

Paul Ness MAI

Member
Joined
Jan 14, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
I know an appraiser/university professor who specializes in appraising such properties, and told me he recently appraised a very similar high-profile facility here in Amish Country. If you want to tag-team with him, let me know and I'll give you his name.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Paul: Thanks for offer, but I don't have time to fool with it. I know some local MAI's they can get, I just thought since the motel market was so hot I would get some ideas on doing motel appraisals. Never to old to learn something new. I haven't heard a motel appraisal mentioned in 15 years and all of a sudden everybody is talking motels.
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Austin,

I think some of the interest could also be related to people wanting out after the beating they have taken after 911.

Look at this link. The highest cap rate nationally is for lodging. It might be considered by some investors as a good time to get into that investment.

http://www.realtyrates.com/commentaryg.html
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Bill:
This is interesting data, now if I could just figure out how to get the financial information out of the Indian owners I would be in business. I just remembered that the man that owns this motel complex owns a lot of motels and my dad and me sold two about 25 years ago to him and some of his family members. If there is a motel within 100 miles of here that Indians don't own it is news to me. About 25 years ago I did a very limited motel appraisal for an S & L to evaluate the position of the note holder that wanted to discount his note on the motel. The Indian owner thought I was a spy trying to steal his motel and he let the tiger out of the cage and sic-ed him on me. Now I remember that is why I got out of the motel appraising business. It is all coming back to me now. Darn this forum is good therapy.
 

Don Jones

Sophomore Member
Joined
Jul 31, 2002
Professional Status
Certified General Appraiser
State
Missouri
Austin,

There is a compliation of hotel/motel data, i.e. sales, various units of comparison categorized by geographical region. Information includes number of sales, average rooms, occupancy rates, daily room rates, selling price per room, income multipliers, capitalization rates, plus much more useful information.

This is a great tool for use in hotel/motel appraisal. It is published by Hotel and Motel Brokers of America. Last one I bought cost about $175 ... they may be higher now, but it is well worth the money. HMBA is headquartered in Kansas City, Missouri. Telephone number is 800.821.5191.
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Austin,

I have not interviewed them personally, but a friend did. He told me that they are allowed to "sponsor" a certain amount of people per year to come over to the good ole USA. Say the number is 6. (it was like 6-8 if I remember). They charge them like $25,000 each, and require one year of work in the motel. Room and board covered. The owner explained that this is what made it such a lucrative business, owning all the small motels.
 
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