Hotel Feasibility Study in the Memphis, TN-MS-AR Metro Area

Franchise units make up 87.0% of Memphis hotel loans. Hotels and motels occupy 3 of the metro's 39 class slots, the location quotient is 2.22x, and Memphis lands at 39 among 807 areas. The 46 approvals from FY2017 to FY2026 total $130.2 million, and a $2.6 million median amounts to 1.20x the national figure, with central loans between $1.8 million and $3.8 million.

Shelby, DeSoto and a 7(a)-led book

Shelby County, TN supplies 23 loans, half of the 46, and DeSoto County, MS 14, so a large share of the record sits across the state line in Mississippi. SBA shows 40 loans under 7(a) and only 6 under 504. Celtic Bank Corporation is the one lender named, with 6 loans and $10.2 million, a heavy average. A borrower should read that as SBA's record of what Celtic holds or held, not as a statement about its preferences.

Years, including a printed zero

FY2017 shows 0 loans and $0, which is an actual count of no loans and not a hidden value. FY2019 shows 8 loans and $15.6 million, FY2020 5 loans and $11.6 million, FY2021 5 loans and $18.4 million, FY2022 6 loans and $20.3 million and FY2023 5 loans and $15.9 million. Among the printed years, FY2022 carries the most dollars at $20.3 million. Loan Analytics withholds FY2018 and FY2024 through FY2026 and both loss measures; a hidden value is not a zero, and a missing loss rate cannot be read as low loss.

Hotel questions for Memphis

A single code covers hotels and motels, which blurs limited-service with full-service, so the study must name the product and the flag it would carry. With 87.0% of loans franchised, the franchise agreement, the property improvement plan and the brand's area-of-protection terms are part of the cost and revenue test. Demand work should rest on occupancy, nightly rates and revenue per available room in the real submarket, whether airport, downtown or another submarket, along with the supply pipeline. Debt service coverage must survive a stress on occupancy and on franchise fees. The appraiser should divide real estate from furniture, fixtures and the going concern. The metro follows the July 2023 delineation.