HOLIDAY INN EXPRESS SOUTH PADRE ISLAND 6502 Padre Blvd South Padre Island, TX 78597

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1 6502 Padre Blvd South Padre Island, TX

2 EXECUTIVE SUMMARY VITAL DATA CURRENT YEAR 1 Price $9,850,000 CAP Rate 9.12% 10.80% Net Operating Income $897,867 $1,064,082 Down Payment 20% / $1,970,000 Net Cash Flow After Debt Service 14.65% / $288, % / $454,830 Loan Amount $7,880,000 Total Return 21.77% / $428, % / $595,097 Loan Type Proposed New Interest Rate / Amortization 6.00% / 25 Years Price/Room $94,712 Ownership Type Fee Simple Number of Rooms 104 Rentable Square Feet 60,909 Number of Buildings 1 Number of Stories 4 Year Built 2004 Lot Size 3.36 Acre(s) MAJOR EMPLOYERS EMPLOYER # OF EMPLOYEES Tax Assessor 396 Pearl South Padre 175 Blackbeards Restaurant 170 Isla Grand Beach Resort 150 Bahia Mar Resort 100 Long Island Village 81 Aids To Navigation Team 79 Coldwell Banker 75 Sea Ranch Enterprises Inc 75 Sea Ranch Restaurant & Bar 70 United States Coast Guard 70 Louies Backyard Inc 67 DEMOGRAPHICS 1-Miles 3-Miles 5-Miles 2016 Estimate Pop 852 2,879 4, Census Pop 822 2,780 4, Estimate HH 332 1,590 2, Census HH 317 1,521 2,175 Median HH Income $57,410 $57,410 $53,072 Per Capita Income $37,211 $52,791 $39,587 Average HH Income $95,562 $95,562 $80,405 # 2

3 INVESTMENT OVERVIEW The Holiday Inn Express & Suites South Padre Island is presented for sale as a value-add opportunity. The hotel is being offered at $9,850,000 or $94,712 per room. The asset sits on approximately 1.4 acres of land and is in close proximity to the beach. Current ownership is absentee and property is not operated by third-party management company. This offering presents a significant opportunity for a new investor to acquire a value-add Intercontinental Hotel Group licenses asset and increase top-line revenues via proper revenue and management strategies. New ownership may increase rate and occupancy through a management refresh and by re-positioning the asset via IHGs Formula Blue Property Improvement Plan. The Holiday Inn Express & Suites currently benefits greatly from high-barriers to entry through sparse development opportunities. Also, South Padre Island is a popular spring break destination for college students, Texas residents and Mexican Nationals. This market has been historically consistent, as highlighted by stable revenue performance. Cameron County, South Padre Island, and Elon Musk are confident that SpaceX will have its Boca Chica launch facility up and running by late This will create another demand generator for the city of South Padre Island by adding a 4,000-person amphitheater to view the rocket launch parties. INVESTMENT HIGHLIGHTS One Hundred and Four Room, Interior Corridor, IHG Asset Property Currently Underperforming Comp Set in Key Metrics Upward Revenue Trend Year-Over-Year Potential Repositioning by Completing IHG PIP Significant Upside via Proper Revenue and Expense Management Desirable Location in South Padre Island - High Barrier to Entry Market 3

4 PROPERTY OVERVIEW Property Overview: Holiday Inn Express & Suites South Padre Island is a 104-unit, interior corridor, limited service hotel. The property features convenient onsite amenities such as a 24-hour fitness center, barbecue grills, meeting room, business center, outdoor pool, laundry facilities, and wireless high-speed Internet access. All 104 rooms provide conveniences like refrigerators and microwaves, flat-screen televisions, coffee/tea makers, and irons with ironing boards. Location Overview: South Padre Island is a resort town in Cameron County, Texas. It is part of the Brownsville and Harlingen Metropolitan Statistical Area. Situated in South Padre Island, Texas, Holiday Inn Express & Suites South Padre Island is 27 miles northeast of Brownsville South Padre Island International Airport. Vacationers staying at the subject property are only a three minute walk to the beach and its amenities. Both Sea Turtle, Inc and the Birding and Nature Center are adjacent to the hotel. Tourists can also enjoy horseback riding at the nearby Island Equestrian Center. The Schlitterbahn Beach Water Park is four miles away, and Andy Bowie Park, and Parrot Eyes Watersports are also within a 10 minute drive. Common Area Amenities Fitness Center Breakfast and Dining Area Outdoor Pool Indoor and Outdoor Whirlpool Meeting Room Guest Room Amenities In-Room Heating and A/C Controls Coffee/Tea Maker Mini Refrigerator/Microwave Flat-screen TV Work Desk with Lamp # 4

5 PROPERTY SUMMARY THE OFFERING Property Holiday Inn Express South Padre Island Price $9,850,000 Property Address 6502 Padre Blvd, South Padre Island, TX Assessors Parcel Number SITE DESCRIPTION Number of Rooms 104 CHANGE TO FRANCHISE Application Fee $50,000 Minimum Parent Company InterContinental Hotel Group Term January 18, 2017-January 18, 2032 Royalty / Marketing Fee 6% of GRR / 3% of GRR PROPOSED FINANCING FIRST TRUST DEED Loan Amount $7,880,000 Loan Type Proposed New Interest Rate 6.00% Amortization 25 Years Loan Term 20 Years Loan to Value 80% Debt Coverage Ratio 1.75 SECOND TRUST DEED Loan Type All Cash 5

6 6 HOLIDAY INN EXPRESS SOUTH PADRE ISLAND AERIAL PHOTO

7 PROPERTY PHOTO Marcus & Millichap closes more transactions than any other brokerage firm. FOR MORE INFROMATION CALL: Roberto Arzola Senior Associate, National Hospitality Group Office: (210) Mobile: (956) Andrew Frosch Senior Associate, National Hospitality Group Office: (713) Mobile: (281)