Overview
Constructed in 2021, the Hyatt House Rochester/Mayo Clinic is located in the growing city of Rochester, MN, the third largest city in Minnesota and home of the world-leading medical center: the Mayo Clinic. The clinic has established itself as not only a medical hub for the state but the country, being named number one in “World’s Best Hospitals” by Newsweek for the sixth straight year and number one in “Best Children’s Hospitals” by US News in 2024. Mayo Clinic serves approximately 1.4 million patients a year across its campuses from every state and 140 countries. The Property itself is immediately proximate to the Mayo Clinic Hospital and several Mayo Clinic patient and non-patient care facilities.
The Hotel is one block from the newly-developed $200 million cutting-edge proton beam cancer treatment facility at the Jacobson Building and the under-construction Andersen Building. Additionally aiding the case for the Property’s strong performance is the Destination Medical Center initiative. Introduced in 2013, the Destination Medical Center (DMC) is an extensive 20-year economic development initiative, with a budget of $5.6 billion, it is the largest comprehensive plan in Minnesota’s history. With the Mayo Clinic at its heart, the DMC initiative will be the catalyst to position Rochester as the world’s premier destination for health and wellness. The DMC project has attracted more than $5 billion in private investment, will create approximately 35,000-45,000 new jobs, and has the potential to generate $7.5-8 billion in new net tax revenue over 35 years.
The Property is the sole Hyatt branded asset in the Rochester, MN Submarket as defined by Costar, but its extended stay model naturally compliments the medical market patients and short-term medical employees. There is no supply-side pressure on occupancy in the near term, with nothing currently under construction or under renovation in the Rochester Submarket.
Investment Highlights
Destination Medical Center Mayo Clinic Expansion
The Mayo Clinic is undergoing the largest economic development in Minnesota history, with a $5.6B expansion, known as the Destination Medical Center (DMC).
Strong T-12 Year-Over-Year Performance
The Property exhibited a 13.5% Room Revenue increase in YE 2024 compared to YE 2023.
New Proton Beam Cancer Facility
The new $200 million proton beam facility recently opened 1 block from the Hotel in the Jacobson Building. Another proton beam therapy facility (Andersen Building) is currently under construction and is expected to open in 2027.
Immediately Proximate to Mayo Clinic
The Hotel is located 1 block from the Jacobson Building, which is a part of the Mayo Clinic and is proximate to the St. Mary's Campus of the Mayo Clinic.
Proximity to Mayo Civic Center
Half a mile away from the Hotel, the Civic Center offers 240,000 square feet of event space and hosts more than 1,300 events annually.
Offered Well Below Replacement Cost
Allows an investor to benefit from a combination of location in a growing economy and upside opportunity.
Assumable C-PACE Loan
The Property currently has approximately $4M in an assumable C-PACE Loan that would be beneficial for a new Owner.
New Asset with No New Supply
Having been built in 2021, the Property is one of the newest products in the market and the only Hyatt-branded property. According to CoStar, there is no new supply under construction or under renovation.
Heightened Cost Containment Initiatives
A new Owner has the opportunity to implement strategic cost containment initiatives to eliminate avoidable expenses to further increase NOI flow-through.
Fee Simple Interest
The Property will be offered as fee simple.
Offered Unencumbered by Management
An investor possesses the opportunity to bring in a new management company or to act as an owner/operator.
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