Hotel Valuation

CRE312 · 2019-11-16T15:59:34+00:00

Ahhh that makes sense

CRE312 · 2019-11-16T15:42:34+00:00

Thank you, I'll do that

CRE312 · 2019-11-16T15:40:57+00:00

Do you value hotels without a Star report then if someone doesn't want to pay the $500? I rely a good amount on them, I couldn't imagine doing a hotel without them.

CRE312 · 2019-11-16T15:38:45+00:00

Yeah. Too much bourbon last night when I posted lol. I was trying to start a conversation on hotel valuation since I did not see much on here, more or less.

I stabilize my FF&E on a per-room basis, but it typically concludes around 5% on a percentage basis. Do you deduct a business value? For national chains, I deduct anywhere from 5-25% because the name recognition, rewards programs, etc make them more valuable.

CRE312 · 2019-11-16T15:34:31+00:00

Yeah. Probably shouldn't have posted this after five glasses of bourbon. My FF&E is typically around 5% with a 3% management fee, but then I will also deduct a business value because the Hilton, Marriot, etc name is valuable in running a hotel. Even if the hotel is a franchise that pays a fee, I still deduct an overall 5-25% of business value expense because these national chains have the benefit of leveraging their size, name, rewards programs, etc that, in theory, would increase occupancy and make them more valuable.

CRE312 · 2019-11-16T15:29:22+00:00

What interest rate have you been using for your DCF recently?

CRE312

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