Hotel Feasibility Study in the Houston-Pasadena-The Woodlands, TX Metro Area

Hotels as a high-dollar class near Houston

Hotels and motels hold a 5 of 39 place among the classes SBA records around Houston, with 324 loans approved from FY2017 to FY2026 and $896.5 million in gross dollars. The metro area is 2 of 807 areas for the class. A location quotient of 1.37x shows lodging taking a larger share of local lending than nationally, and the median loan of $2.7 million, 1.23x the class median nationwide, is far above what most asset classes borrow. The middle half of loans runs from $1.9 million to $3.7 million, a tight band at a high level, so a borrower is rarely asking for a small amount.

Programs, brands and the code

Programs split 299 loans to 7(a) and 25 to 504. Franchise affiliation is the norm at 68.5% of loans, so most projects inherit a flag's standards, fees and renovation schedules. Motels and hotels fall under one code, so budget inns and full-service hotels cannot be told apart here; a study must say which product is being tested instead of leaning on the class average.

Holders and counties

Wallis Bank is listed as holder of 57 7(a) loans worth $155.0 million, followed by The MINT National Bank with 15 worth $38.5 million, US Metro Bank with 14 worth $51.8 million, The Huntington National Bank with 14 worth $35.8 million and GBank with 12 worth $37.6 million. Under 504, Capital Certified Development Corporation appears with 8 loans worth $26.9 million. Treat these as SBA's attribution of loans to holders, past or present, and not as a ranking of anyone's standards. Harris County has 230 loans, with Galveston at 29, Fort Bend at 22, Brazoria at 19, Montgomery at 11 and Chambers at 8.

Floors and what a study has to prove

Among FY2017 to FY2024 approvals, 11.1% or more were cancelled, which is a lower bound. Held back on thin counts are the ceiling on cancellations and the write-off rate, and held back is not zero. Which loans count toward Houston depends on matching project counties by name to the 2023 metro map. Underwriting a hotel here calls for occupancy and average rate tested against the supply pipeline, the flag's required improvements and fees, building or buying cost at this ticket size, debt service coverage through a soft season, and an appraisal that keeps land and building apart from the operating business.