Hotel Development Opportunity Southington, Connecticut

H otel D evelopment O pportunity
Southington, Connecticut
*CONFIDENTIAL*
Exclusive Representative
Joe McCann
Certified Hotel Broker
Optimum Hotel Brokerage
733 Rowland Road
Fairfield, CT 06824
(203) 254-3904• Fax (203) 319-9910
[email protected]
Exclusive Offering - Optimum Hotel Brokerage
Hotel Development Opportunity – Southington, Connecticut
Hotel Development Opportunity
Interstate 84 and Route 10 (Queens Street)
Southington, Connecticut 06489
Price:
$650,000
Executive Summary
The development site being offered is a 4.2-acre parcel
in the Town of Southington, Connecticut, a growing
corporate, residential, and retail market about 20 miles
west of Hartford. The parcel is strategically located at
the juncture of Interstate 84 (Exit 32) and Route 10
(Queens Street). The Interstate 84 corridor in the
Northeast US has grown to be a prized artery for hotel
development, and other I-84 markets such as Newburgh
and Fishkill in New York State and Danbury and
Hartford in Connecticut have experienced impressive
increases in lodging demand over the past 15 years. It is
difficult in Connecticut to locate Interstate hotel sites
with such excellent access, visibility, and such proximate
access to restaurant and retail development.
The level, irregularly-shaped parcel fronts the
westbound lane of I-84 (about 600 feet from the
westbound Exit 32), and is visible from interstate in both
directions. Exit 32 provides entrance and exit ramps in
both eastbound and westbound directions. This busy
section of I-84 averages over 77,000 average vehicles per
day. Queen Street, which averages over 30,000 vehicles
per day in front of the proposed development, is the
major retail artery on the Southington area.
The immediate area of the proposed hotel development
along Queen Street has been a successful location for
retail (Home Depot, Blockbuster, Staples, Shaw’s,
Bernies) and restaurant (Outback, Chili’s, Bertucci’s,
Denny’s, McDonalds) development.
Numerous
restaurants are within walking distance to the hotel site.
An initial plan for the site might include a three or
four-story mid-scale or suite franchise lodging facility,
and numerous franchises are available in the market.
The site could accommodate roundly 70 to 90 units
(40,000 to 55,000 square feet) with appropriate parking
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and landscaping. The northern section of the parcel near
its entrance at Interstate Drive, could also possible
accommodate a small retail strip center.
The Southington market is an attractive location for
lodging development. In 2002, the market achieved
69.6% occupancy at an $86.82 average daily rate
($60.43 RevPAR). Despite the fact that supply was
increased by 16% due to the July 2002 opening of the
96-unit Residence Inn by Marriott, lodging demand grew
by 18% over 2001. Average daily rate in 2002 grew by
4.3% over 2201, and gross hotel revenues in the
competitive set grew by over 22%.
The immediate competitive set of the proposed hotel
consists of five other properties at Exits 32 and 31 of I84. Three of these properties (about 75% of the
competitive inventory) are exterior corridor, re-branded
hotels built in the 1970’s. It might be reasonable to
assume that a newly constructed, well-branded, interior
corridor hotel highly visible and accessible from I-84
would achieve a high degree of market penetration and
rate premium.
The owner of this site is an experienced regional real
estate developer who has developed many of the sites in
the hotel’s immediate area. He has committed to assist
the buyer directly in securing any engineering and
governmental approvals for the project.
A number of limited service, extended stay, and
upscale franchises are available in the market, and the site
has garnered considerable interest from national lodging
brands. The project has also attracted interest from
lenders, who have expressed a desire to place the
construction and permanent financing of the hotel.
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Exclusive Offering - Optimum Hotel Brokerage
Hotel Development Opportunity – Southington, Connecticut
Investment Considerations
To properly assess the investment potential of this hotel development opportunity in
Southington, Connecticut investors should consider these important factors:
¾ The 4.2-acre site is a highly visible and accessible from both directions of
Interstate 84 at Southington Exit 32
¾ Interstate 84 and Route 10 supply high traffic volume to the site. I-84 averages
over 77,000 vehicles per day at Exit 32, and Route 10 averages over 30,000
vehicles per day at the development’s entrance
¾ Many prominent extended-stay, and mid-scale national hotel brands are still
available in the market
¾ The immediate competitive marketplace is characterized by dated, exteriorcorridor hotels built in the 1970’s, so a new construction product could achieve
a high degree of RevPAR premium
¾ The development is approved for hotel development and initial estimates
suggest that the site could accommodate roundly 80 guest rooms or suites
¾ At roundly $200K per acre, the land cost is considerable below similar sites in
Connecticut, where land prices, soft costs, site preparation costs, and high
barriers to entry inhibit lodging development
¾ The Southington market is strong, with diverse corporate, government,
educational, and leisure demand generators
¾ The Route 10 (Queen Street) corridor has experienced strong retail
development over the past five years, and has become the preferred location for
retail and restaurant development
¾ There could be the possibility that the 4.2 acre site could accommodate
additional retail or restaurant lease income
¾ The State of Connecticut and the Town of Southington offer investors favorable
tax rates and numerous economic development incentives
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Hotel Development Opportunity – Southington, Connecticut
Area Site Plan
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Hotel Development Opportunity – Southington, Connecticut
Site Plan for 80-Unit Hotel
Average Daily Traffic Counts (ADT) in Area of Hotel Development
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Hotel Development Opportunity – Southington, Connecticut
Aerial Site Plans
Aerial Picture of Site and Exit 32 of Interstate 84
Close-up Aerial of Development Site
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Exclusive Offering - Optimum Hotel Brokerage
Hotel Development Opportunity – Southington, Connecticut
Hotel Market in Southington, Connecticut
Competitive Set
There are 5 hotels that will comprise the subject hotel
development’s direct competitive set. They are all located
on Exits 31 and 32 on I-84 in Southington. The proposed
hotel will also compete, to a lesser extent, with full service
and limited service hotels in Bristol (Radisson) and
Plainfield (Ramada), along with a few minor independents
in the general area.
Property
Rooms
Lodging properties in direct competition to the proposed
site are, with the exception of the Residence Inn, exterior
corridor, re-branded products originally built in the
1970’s. One could expect that a new construction,
interior corridor, suite or mid-scale product to achieve a
high market RevPAR penetration. At publication of this
offering package, no hotels are under construction or in the
development pipeline in the immediate market.
Rates
Amenities
1. Motel 6
124
$55/$59
2. Travelodge
72
$59/$75
E
3. Howard Johnson Express
148
$69/$85
C, E
4. Holiday Inn Express
122
$79/$119
A, B, C, D, E
5. Residence Inn
94
$104/$119
C, D, E
Amenity Codes: A = Restaurant(s), B = Lounge(s), C =Swimming Pool, D = Exercise Facilities,
E = Complimentary Continental Breakfast
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Exclusive Offering - Optimum Hotel Brokerage
Hotel Development Opportunity – Southington, Connecticut
Competitor
Summary
Motel 6
625 Queen Street
Southington, CT 06489
(860) 621-7351
This 124-room, exterior entry, two-building, twostory, property is the closest to the proposed
development site, with convenient access to Queen
Street. Originally opened as a Six-Pence Inn in the
1970’s, it has recently undergone renovation. Rooms
and amenities are standard to the Motel 6 brand.
Double rates range from $55 to $59.
Travelodge
30 Lansing Street
Southington, CT, 06489
(860)-628-0921
This two-story, 72-unit, exterior entry property
originally opened as a Howard Johnsons in the 1970’s.
The hotel is situated across from the Howard Johnson
Express on Queen Street. The property includes
amenities standard to Travelodge, plus a small meeting
room. Room rates range from $59 to $75.
Howard Johnson Express
462 Queen St.
Southington, CT, 06489
860-621-0181
This two-story hotel, originally built as a Susse Chalet
in the 1970’s, is located just south of the I-84 and
Queen Street intersection. The property, renovated
in 2001, has 148-rooms (with about 32 being interiorentry) and outdoor swimming pool. Rooms rate at the
hotel range from $59 to $75.
Holiday Inn Express
120 Laning Street.
Southington, CT 06489
(860)-276-0736
Originally opened as a Comfort Inn, this 122-unit,
interior corridor hotel was converted to a Holiday Inn
Express in the mid-90’s. The hotel was renovated in
2001, and features complimentary continental
breakfast, high speed internet access, and an outdoor
pool. Rate range from $79 to $119.
Residence Inn
778 West Street
Southington, CT 06489
(860) 621-4440
This 4-story, 94-suite hotel, located at Exit 31 of I-84,
opened in 2002. All units are equipped with kitchen
and high speed internet access. Hotel amenities
include two meeting rooms, spa, and sports court.
Rates at the hotel range from $104 to $119.
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