Hotel Feasibility Study in the Oklahoma City, OK Metro Area

Oklahoma City hotels: big loans, brand-led

Oklahoma City records 38 hotel and motel loans totaling $105.8 million, with a median of $2.3 million that is 1.06x the national figure and middle-half edges of $1.8 million and $4.3 million. Franchise share is 73.7%. In the metro's own mix the hotel class is 5 of 39, its location quotient is 0.90x, and the metro places 47 of 807 nationally. At 0.90x, hotels carry a little less weight in local lending than they do in lending across the country.

Programs and the hotel code

Of the 38 loans, 30 are 7(a) and 8 are 504. Oklahoma County, OK carries 24 loans, which is 24 of the 38, so the record rests largely on one county. One code covers hotels and motels together, so economy motels and branded full-service hotels cannot be separated in these numbers.

A short list of years

FY2021 printed 9 loans and $17.5 million, and FY2022 printed 7 and $22.2 million, so those two years account for much of the record, and no other printed year comes close to them. FY2023 printed 0 loans and $0. Loan Analytics withholds FY2017 to FY2020 and FY2024 to FY2026 because the counts are too small to print. No lender is listed for this metro.

Blanks

Loan Analytics does not print a cancellation percentage because the cohort is under 30 loans, and it withholds the charge-off percentage as well; a blank is not zero. Oklahoma County belongs to the metro because the 2023 list carries that name.

The Oklahoma City hotel study

The study ought to derive occupancy and room rate from the actual competitive set, and test how the brand's required improvements affect cost. Loans in this metro start high, so run debt service coverage at $2.3 million and near $4.3 million with a slow ramp. The appraisal ought to price land and building apart from furniture and equipment, putting the flag on a line of its own, and the study should state plainly that history does not promise approval. It should compare the proposed site with the flags already operating nearby, and examine access from the interstate, the airport and downtown venues. With a franchise share of 73.7%, a borrower should price property improvement plans and reserve contributions into the pro forma. A lender will also ask about management: who runs the property day to day, and what that operator has achieved elsewhere.