Wednesday, July 7, 2010

Hotel Repost Fun: Proposed Hotel in Greensboro Analysis and a Letter to Andy Scott

HVS- 1_18_10


January 18, 2010

Mr. Andrew Scott
City of Greensboro
300W. Washington Street
Greensboro, North Carolina 27402

Re: Proposed Luxury Hotel Greensboro

Greensboro, North Carolina

HVS Reference: 2010180001

Dear Mr. Scott:

Pursuant to your request, we herewith submit our analysis pertaining to a
proposal to develop a 206-room luxury hotel in downtown Greensboro,
North Carolina. The purpose of our analysis is to assist the City of
Greensboro in reviewing a Notification of Intent to Request Recovery Zone
Economic Development and Facility Bonds submitted by Urban Hotel
Group, LLC and Elm Street Center, LLC for a proposed luxury hotel to be
developed at 200 S. Davie Street in Greensboro, North Carolina.

Our opinions can be summarized as follows:

 The developer’s positioned average daily rate for the first five years of
operation is reasonable for a luxury or upper upscale hotel as proposed
for downtown Greensboro, but not at the occupancy rate projected.

The developer’s projection of occupancy at the proposed hotel over the
first five years is highly unlikely to be achieved given the recent
occupancy levels achieved by the four hotels that will be primary
competitors of the proposed hotel.

The revenue per available room (RevPAR) projected by HVS for the
proposed hotels is well below the level necessary to cover debt service
and a return on and return of the equity investment.

 The Food & Beverage revenue projected by the developer on a per
occupied room (POR) basis is reasonable for a luxury or upper upscale
full-service hotel, but is highly dependent on the type and quality of the
restaurant(s) and bar(s) located in the hotel, as well as the quality of the
banquet and catering department

 The 2009 HVS Hotel Valuation Index report issued in October 2009 lists

Greensboro (ranked 63) near the bottom of 65 cities in the U.S. for
projected changes in per-room value from 2006 to (Projected) 2013. Hotel
values in Greensboro are projected by HVS to fall -47.7% between 2006
and 2013.

We hereby certify that we have no undisclosed interest in the property, and
our employment and compensation are not contingent upon our findings
and opinions. This consulting services letter is subject to the comments
made throughout this report and to all assumptions and limiting conditions
set forth herein.

W&R Hospitality Services, Inc.

Richard D. Williams, MAI, Managing Director, +1 303 771-4104


above is the letter and documents on the downtown greensboro hotel proposed.It is a full 52 page analysis . One good question on this is, how much did it cost to do this ? and was it needed to begin with.If you want to see the scribd version CLICKHERE


Jeffrey Sykes said...

Keith: I've been posting this around the web and it is getting some traction. Good work.

Triadwatch said...

i did see on news and record where it has gotten a lot of play and hopefully more will read it . Tim needs to re read it plenty.

Thanks and talk soon.

on a side note sorry on meeting in december , i didn't get e mail on converge meeting. keep me informed if we do it in future

Kelly Sigs said...

It is important to understand that these bonds are federal money issued to states to be used specifically for economic purposes as a result of the economic stimulus. They must be used by the 2010 year end. So, we need to find uses for the money asap or we don't get any. This is the first submittable to obtain the federal funds. Hopefully, we can get some more businesses to step up.

Triadwatch said...

sometimes you need to have your ducks in a row before something like this comes down the pike for example High Point N.C. said thanks but no thanks and gave back their allotment to the state. This whole downtown luxury hotel has a lot of politics involved and plenty of other hurdles to cross.

It will be interesting to see what happens on the state level but the local bond commission was wanting more info from the elm street group before he would approve anything.

This will be a story that has legs and keeps on growing.

It is amazing on how many people have looked at the above document.

THanks for the post kelly Sigs