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9532 Spirit of Austin LnAustin, TX 78719
Hyatt Place Austin Airport
Asset ClassHotel & Hospitality
overview of deal

Overview

The acquisition of the Hotel gives a new Buyer the opportunity to purchase a strong-branded Hyatt product with significant upside in terms of top-line revenue. As the closest hotel to Austin-Bergstrom International Airport, the Hotel benefits from a prime location that will enable a new Owner to leverage the ongoing growth in passenger traffic as the Austin Airport proceeds with a $4 billion expansion that will add 20 new gates in a new Concourse B and can expand up to 40 new gates in the long term, more than doubling the current 34 gates under the expansion branded "Journey with AUS."

 

Austin is the state capital of Texas, as well as the seat and most populous city of Travis County. It has been one of the fastest growing large cities in the United States since 2010, with an estimated population of 964,177. By 2030, Austin is projected to have a population of 3.2 million. The growth is spurred by several tech giants like Dell, Apple, Amazon, Facebook, Oracle and Tesla having a large presence in Austin. In addition, Austin is home to the 51,913-student University of Texas campus, the massive SXSW tech & entertainment festival, and the newly approved $1.6 billion redevelopment to double the size of the Austin Convention Center.

 

Austin-Bergstrom International Airport is one of the fastest-growing airports in the United States. As of 2023, there were more than 550 arrivals and departures on the typical weekday to 97 destinations in North America and Europe. Austin-Bergstrom is also an economic engine in Central Texas, supplying over 74,000 direct and indirect jobs in the Central Texas region. The AUS 2040 Master Plan anticipates the growth of passenger volume to accommodate over 31 million annual passengers. The AUS 2040 Master Plan identifies projects that will help the airport increase capacity for more flights, more passengers and more cargo activity along with enabling and supporting infrastructure.

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Investment Highlights

HREC Investment Advisors (“HREC IA”) is pleased to offer qualified investors the opportunity to acquire the leasehold interest in the 139-room Hyatt Place Austin Airport (“Hotel” or “Property”), which opened in 2017 and is located at 9532 Spirit of Austin Ln, Austin, TX 78719.

  • Located at Fast-Growing Austin-Bergstrom International Airport: The Hyatt Place benefits from being the closest hotel to the airport terminals and sits on 3.4 acres. AUS is the 3rd busiest airport in Texas and is experiencing significant growth in air traffic. In 2023, AUS set an all-time record, serving over 22 million passengers, a 5% increase over 2022.
  • High-Performing Submarket: The Hotel achieved a 106.2% RGI against its Comp Set for T-12 July 2024. The Comp Set attained 78.8% at $152.37 ADR yielding $120.11 RevPAR for T12 July 2024. The Hyatt Place's Comp Set is growing RevPAR this year even after experiencing 11.6% RevPAR growth from July 2022 TTM to July 2023 TTM.
  • Attractive Ground Lease: The Hotel is on a ground lease with the City of Austin, set to expire in 2053, with multiple extension options available. This long-term lease structure offers stability and flexibility, enhancing the value of this well-located asset for new investors.
  • Strong In-Place Cash Flow: In 2022, the Property generated $7.2 million in total revenue, followed by $7.5 million in 2023 resulting in profit margins of 32.1% and 29.6%, respectively.
  • Pricing Guidance: $29 million or $209,000/key, a 7.6% cap rate on YE 2023 NOI (after reserves and ground lease payment).
  • COO PIP: The COO PIP is expected to consist of a 7-year refresh of soft goods to maintain its exceptional performance against its competition.
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9532 Spirit of Austin LnAustin, TX 78719

Sales Team

Michael SallowaySenior Vice Presiedent(256) 872-0688msalloway@hrec.com
Mark RomeSenior Vice Presiedent

License #: TX Lic #: 17223525

(214) 632-7310mrome@hrec.com
Mark MitrokaSenior Vice Presient

License #: TX Lic #: 684007

(512) 434-4744mmitroka@hrec.com
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