Overview
The Microtel 2-Hotel Offering is an attractive opportunity for an investor to acquire two high performing, extended stay Hotels in northwestern North Dakota. The proximity of the Hotels to each other allows a new owner to optimize expenses due to economies of scale. Moreover, the North Dakota Area Submarket shows continued growth, as seen in the increase of the 12-month submarket RevPAR (+18.34%). This growth, with a less than 1% drop in inventory rooms within the submarket, indicates that the rise in RevPAR is primarily attributed to market fundamentals rather than a reduction in inventory rooms.
The areas of Tioga and Stanley serve as key hubs for the agriculture and oil industries in the northwest region of the state. The impact of the Bakken oil boom has spurred growth in these areas, resulting in a diverse corporate landscape with major companies such as Hess Corporation, DistributionNOW, and Enel Green Power North America.
The offering represents the opportunity to acquire two well-maintained properties with strategic asset proximity, high RevPAR, no new supply, a strong corporate landscape, and a low property tax environment.
Investment Highlights
Strong Performance
Both Hotels generated over 26% in NOI flow-through for 2023. Additionally, both Hotels are penetrating comp set RevPAR over 120%. With continued strong cash-flows expected, investors will be well-positioned to attract financing even in the current lending environment.
Dominating Supply Within the Market
The Hotels represent 20% of room supply in the surrounding 25 miles.
Strong Submarket Fundamentals
TTM RevPAR is up 18.34% YoY for the North Dakota Area Submarket.
Midwest Value Investment
The Hotels can be purchased at an attractive basis, in contrast to other Midwest markets.
North Dakota Tax Climate
Compared to many other states in the Midwest, North Dakota is well-known for having low property taxes. North Dakota is ranked #7 for Property Tax Climate out of the 50 states (taxfoundation.org). In 2023, the property tax bills for the Hotels were approximately $36,000 each.
Asset Proximity
The Microtel Inn & Suites Tioga is within 30 miles of the Microtel Inn & Suites Stanley. The purchase of both Properties allows for shared expenses and economies of scale for further cost control. This is also an opportunity to spread the cost of one GM over the two Hotels, creating operating efficiencies and improved margins.
No New Supply
Sold Unencumbered from Management
Offered Well Below Replacement Cost
Fee Simple Interest
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