In 1985, H&W began as a hotel management company. In 1988, they built their first hotel. Since then they have managed, developed, owned, bought and sold hotels. In fact, there have been over 30 hotels that have flown eight different brand flags, along with some independents.
Today, H&W continues to work with other hotel companies and investors that need a development and/or management arm. H&W will continue to prove its staying power by maintaining the flexibility to take advantage of industry trends. Diverse real estate holdings – hotels, commercial warehouse space, office space, and residential property – and the ability to perform diverse business services – hotel development, hotel and professional hotel management – provides H&W a business model that takes advantage of economic growth periods and has the ability to maintain competitive operations during economic downturns.
Site Selection Criteria
- Is the location near hotel room demand generators?
- What are the hotel room demand generators? Tourist Attractions, Industrial Park, College, Hospital, Major Crossroad for Through Traffic, etc. Have these demand generators expressed the need for hotel rooms? How many would they use a month?
- Is location zoned for a hotel or can zoning be easily changed to allow a hotel?
- Do you have enough land? (80 Rooms – 1.7 acres ~ 140 Rooms – 2.5 acres)
- Are utilities available at the site? Sewer, water, electric? Gas (optional)?
- Would the current land owner be willing to exchange the land for a percentage ownership in the hotel?
- Is the location close to restaurants? What restaurants and what is the distance?
- How many hotel rooms currently exist in your community? Are the existing hotels successful? Are they chain affiliated or “mom and pop” businesses?
- Unlike other commercial real estate deals, a hotel is an operating business. The financial success of the operation determines the market value of the real estate. To maintain or increase the value of the real estate, experienced hotel management must be in place.
- Does the investor have hotel operations experience or does he need to hire a manager or management company?
- Is the investor willing to be a 49% owner of the project if H&W guaranteed the debt and managed the hotel for a fee? The investor would receive a preferred return until he received his initial equity, then returns would be prorated by percentage of ownership.
Attention Hotel Investors
H&W is seeking qualified investors as equity participants for future hotel development opportunities. To qualify for a future private placement offering, an investor must have a net worth of over $1 million, or an annual income of over $200,000 in each of the last two years. Shares usually sell in $100,000 increments.
In a typical deal, the equity investors receive ownership in the hotel for putting up equity of 25% of the cost of the hotel development. A 80-room limited service hotel require a total of $1,500,000.00 equity. H&W develops the hotel, personally guarantees the long term debt, and manages the hotel. equity investors receive a preferred return of all cash distributions until they receive a cash return equal to their original investment. This usually occurs sometime in the 5th year of operation. Once the investors have received their initial investment in cash distributions, the investors then receive their pro rata share of distributions. This options allows investors without hotel development or operations experience to learn about the business and enjoy the cash on cash returns of a hotel investment.
Other Investment Options Are Available For Qualified Parties
Land owners can contribute their land as their equity contribution and receive credit for its value.
Investors desiring 100% ownership can hire H&W to develop and/or manage the hotel facility.
An investor purchases a hotel and H&W operates it under a management contract.