- 160-Room, Interior Corridor, Upper Midscale Hotel Built in 2001
- Approximately Three Miles from O’Hare International Airport
- Priced Significantly Below Replacement Cost at $67,188 Per Key
- Significant Upside Potential through Revenue and Expense Management
- 11,500 Square Feet of Meeting and Event Space
- Priced at 2.75 Times Year-End 2018 Room Revenues
Investment Overview:
Marcus & Millichap’s National Hospitality Group, as an exclusive representative of the seller, is pleased to present for sale to qualified investors the Comfort Suites O’Hare Airport. The Choice-branded hotel is priced at $10,750,000 or $67,188 price per room; this represents a 2.75X multiple on year-end 2018 room revenues. An opportunistic property, constructed in 2001, is located at 4200 River Road, three miles from O’Hare International Airport.
This eight-story, 160-room hotel presents a new owner the opportunity to acquire a stabilized asset within the Chicago MSA. The property has the potential to experience additional upside through detailed expense management, increasing net operating income. The hotel is well-equipped with a restaurant, bar, and large meeting facility.
Comprised in the sale is 11,500 square feet of meeting and event space. Current ownership is leasing the event space to a third-party operator on weekends from Friday-Sunday for approximately $10,000 a month and 10 percent of sales over $80,000; the hotel also receives five percent of gross sales used to subsidize utility costs. Multiple events take place each weekend which allow the hotel to experience strong weekend occupancy. The hotel books an additional 15-20 room nights for each event. Addition to the leased event space, the hotel also hosts corporate events and meetings during the week. A new owner has the option to terminate the lease with 90 days’ notice upon confirmation of the sale. The lease is set to expire in May 2019.
Operationally, this hotel achieved $3,909,175 room revenue in 2018, resulting in a net operating income of approximately 12.5 percent of overall revenues; this equates to roughly $537,822 before debt service. Through additional marketing and revenue management, the hotel has the ability to achieve increased RevPAR to meet the market; this allows a new owner the opportunity to capitalize on additional increases in revenue.
The expenses include provisions for a 3 percent management fee and 4 percent reserves for capital replacement. The hotel is offered fee simple, unencumbered by management and debt.
Property Overview:
The Comfort Suites O’Hare Airport is a 160-room, eight-story, interior corridor hotel built in 2001. Well equipped with numerous common area and guest room amenities, this limited-service upper midscale hotel offers spacious guest rooms that come furnished with a microwave, refrigerator, work desk, separate seating area with sofa bed and a flat-screen television with premium channels. Additionally, some splendid common area amenities the hotel has to offer consist of a business center, fitness center, restaurant, bar, 11,500-square feet of meeting and event space, and dry-cleaning services.
Location Overview:
Schiller Park, Illinois is a city located in Cook County in the northeastern region of the state, 15 miles northwest of Chicago and one mile east of The Chicago International Airport. The Comfort Suites Chicago O'Hare is superbly positioned at N River Road and W Irving Park Rd. The O’Hare International Airport is set to have significant renovations over the next 10 years, including a new $876 million rental car facility which opened in late 2018 with a 24-hour rail system serving each of the terminals. The $8.5 billion plan to expand the airport will involve 35 new gates with 3.1 million square feet of additional terminal space as well as an underground pedestrian terminal. With the city’s major employers and popular revenue generators in close proximity to the property, this sought-after hotel benefits from many key industries of the city which include health-care and social assistance, manufacturing, and professional, scientific, tech services. Northwest Community Hospital and Comcast, two of the city’s largest employers located approximately three miles from the hotel, are prime revenue drivers for the surrounding area. The hotel site is located approximately one mile from Rosemont, Illinois, including the Fashion Outlet Malls of Chicago with over 150 stores, the Rivers Casino, a 140,000-square-foot casino generating over $400 million annually, and numerous recreational activities and restaurants. Other major employers that are responsible for a significant portion of the workforce include United Continental Holdings (23.2 miles), JP Morgan Chase Chicago Headquarters (11.7 miles), University of Chicago (24.4 miles). Revenue generators in the area, like Woodfield Mall (14.8 miles) and O’Hare International Airport (3.2 miles) help bring additional revenue to the hotel through an increase in transient business. Extra demand drivers for the city include Robert Morris University - Arlington Heights (11.5 miles), and the Allstate Arena (4.6 miles).
