Overview
HREC Investment Advisors (“HREC IA”) is pleased to offer, to qualified investors, the opportunity to acquire the 90-room Four Points Fargo Medical Center (“Hotel” or “Property”), situated at 5064 23rd Ave, Fargo, ND 58104.
The Four Points Fargo Medical Center presents a compelling opportunity for acquisition, positioned strategically near a range of diverse demand generators. These include corporate headquarters and regional offices, two major hospitals, and various leisure attractions. Notable generators include Sanford Medical Center, Scheels Arena, Microsoft, and more.
The Property’s top line has room for improvement compared to its competitive set, with it being ranked 5 out of 6 for RevPAR in relation to its competitive set for the January 2024 TTM period, according to STR. The affiliation with the 160 million Bonvoy Rewards members provides additional benefits in expanding demand channels for bookings. An investor can also capitalize on opportunities to revamp operations, implement cost control initiatives, and grow the top line.
The Hotel is located in Fargo, the largest city in the state of North Dakota, and is located directly off Interstate 94 (I-94), providing connectivity to Moorhead and surrounding states. Fargo anchors the eastern part of North Dakota, functioning as an economic center. Fueled by the presence of North Dakota State University (NDSU), Sanford Medical Center, Scheels Arena, and Microsoft, Fargo thrives in the higher education, corporate, healthcare, and leisure sectors. Its accessibility, dynamic business environment, and corporate anchors contribute to its prominence as a thriving economic hub.
The healthcare sector in Fargo is anchored by Sanford Medical Center (SMC) and Essentia Health, both located within four miles of the Hotel. Corporate giants like Microsoft, U.S. Bank, Blue Cross Blue Shield, and Bobcat play pivotal roles, while new developments like the Alerus Office Development just south of the Hotel add to the economic vitality. Additionally, North Dakota State University (NDSU), Concordia College, and Minnesota State University Moorhead contribute significantly to education, innovation, and talent development in the Fargo-Moorhead metropolitan area.
Investment Highlights
- Exceptional Location near Major Demand Generators: The Four Points Fargo Medical Center enjoys a highly visible and accessible location off Interstate 94, which connects to Interstate 29. The Hotel is located less than four miles from a mix of major demand generators such as Sanford Medical Center (across the street), Scheels Arena, Microsoft Corporation, U.S. Bank, and Blue Cross Blue Shield of North Dakota.
- New Alerus Corporate Location: The Hotel is located less than two miles north of the new Alerus office development in Fargo, which will be located in the Urban Plains Development. The new office will provide full-service banking amenities and have approximately 90 client-facing employees based at the location. The development is a 2-story 25,000-square-feet office space, set to open in 2025.
- Operational Upside Against the Competitive Set: The Four Points Fargo Medical Center is ranked 5th among the 6 hotels in its competitive set for RevPAR as of the January 2024 TTM period. With a RevPAR penetration of 93.3%, the Hotel demonstrates the ability for a new owner to grow significant top-line revenue against the competitive set.
- Upside from Replacing Existing Management: The Four Points Fargo Medical Center presents an excellent opportunity for an investor to purchase the Hotel unencumbered by a management agreement. Investors have the chance to bring in a new management company or self-operate and revamp the operational strategy of the Hotel.
- Attractive Basis – Well Below Replacement Cost: The national average cost of building a hotel has increased significantly in the past few years. The Hotel provides an investor with the opportunity to acquire a well-located Property, unencumbered of debt and management, at pricing well below current construction costs (even after the completion of PIP).
- Fee Simple Interest
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