|
ta
<br />www.FinanceDTA.com
<br />SECTION VII
<br />HOSPITALITY
<br />Vacancy
<br />(30.00%)
<br />($15,750)
<br />($5,748,750)
<br />(31.40%)
<br />Rev Par
<br />$147.00
<br />$36,750
<br />$13,413,750
<br />73.26%
<br />Food Sales
<br />16.00%
<br />$23.52
<br />$5,880
<br />$2,146,200
<br />11.72%
<br />Beverage Sales
<br />7.50%
<br />$11.03
<br />$2,756
<br />$1,006,031
<br />5.49%
<br />Technology
<br />3.00%
<br />$4.41
<br />$1,103
<br />$402,413
<br />2.20%
<br />Minor Departments
<br />10.00%
<br />$14.70
<br />$3,675
<br />$1,341,375
<br />7.33%
<br />Total Non-RevPAR Income
<br />$53.66
<br />$13,414
<br />$4,896,019
<br />26.74%
<br />Gross Hotel Revenue
<br />$200.66
<br />$50,164
<br />$18,309,769
<br />100.00%
<br />Hotel
<br />Expenses
<br />Department Expenses
<br />($63.43)
<br />($15,858)
<br />($5,788,033)
<br />(31.61%)
<br />Undistributed Operating Expenses
<br />($60.27)
<br />($15,068)
<br />($5,499,638)
<br />(30.04%)
<br />Fixed Charges
<br />($6.62)
<br />($1,653.75)
<br />($603,618.75)
<br />($0.03)
<br />Capital Reserves for FF& E
<br />($2.94)
<br />($735.00)
<br />($268,275.00)
<br />($0.01)
<br />Total Expenses and Reserves
<br />($133.26)
<br />($33,314)
<br />($12,159,564)
<br />(66.41%)
<br />Net Operating Income
<br />$67.40
<br />$16,850
<br />$6,150,204
<br />33.59%
<br />Net Asset Value @ 6.5%
<br />6.50%
<br />$94,619,000
<br />We reduced the hotel income by hotel expenses to determine NOI.
<br />As described above, one of the significant variables to evaluate an IPP is the assumed cap rate. Figure 16
<br />depicts a summary of existing cap rates by hotel class. We believe the proposed hotel will be similar to
<br />the Westin South Coast Plaza, which qualifies as an Upper Upscale property. This led us to determine that
<br />a cap rate of 6.5% is appropriate. Therefore,
<br />Figure 16: Market Cap Rate by Class we concluded that with a NOI of $6,150,000,
<br />Market Cap Rate By Class the value of the proposed hotel would be
<br />95% about $95,000,000.
<br />9.0%
<br />8.5%
<br />8.0%
<br />7.5%
<br />7.0%
<br />6.5%
<br />6,0%
<br />s.5% 1
<br />18 , 19 I 20 21 I 22 1 23 I
<br />Luxury & Upper Upscale Upscale & Upper Midscale
<br />Midscale & Economy
<br />building permit in this category.
<br />After we established the value of the proposed
<br />hotel, the next step to determine the viability
<br />of a hotel is to identify the costs required to
<br />construct the hotel. Table 14 provides a
<br />summary of costs incurred in constructing a
<br />hotel of that quality. We estimated that
<br />vertical construction costs would be $350 per
<br />square foot for income -generating room space
<br />and $291 for all other space. We also include
<br />a 5% contingency and an allocation for a
<br />Indirect costs include engineering and consulting costs, as well as Development Impact Fees ("DIFs").
<br />Direct development costs include all physical site costs, plus a percentage share of backbone costs and
<br />parking to accommodate 121 spaces. Indirect costs include field and office operations, as well as
<br />corporate general and administrative expenses. Marketing and sales costs are a portion of a project -wide
<br />brand development program for the site. Financing costs include interest, loan fees, and property taxes.
<br />Related Bristol at 3600 South Bristol Street September 2023
<br />Draft Market Study Report
<br />Exhibit 10
<br />31
<br />
|