Bottom line. A hotel is worth what its rooms earn. Three live listings ask $33,000 to $67,000 a room; building a new limited-service hotel costs $170,000 to $197,000 a room. The gap looks like a bargain until you read the income: one listing's own description shows earnings that support a 2.2% return on the asking price, and another prints a 16% cap rate next to a placeholder income figure. Two East Bay foreclosures cleared at $6,250 and $23,200 a room this year, as reported.
1Three listings, as published
| Hotel | Rooms | Asking | Per room | Income shown | What the buyer must rebuild |
|---|---|---|---|---|---|
| Sloan's Motel, Burlington, CO (economy, independent, 1960) | 29 | $990,000 | $34,138 | "16.16% cap" with a $99,999 placeholder in the NOI field; rate $91 | NOI from tax returns; the stated cap and NOI do not tie |
| Quality Suites, Houston NW, TX (select-service, branded, renovated 2024) | 54 | $3,600,000 | $66,667 | Trailing NOI $80,732 on revenue $598,015 (up 24.5%), per the listing's description; the headline NOI field is masked | A plan: at an 8.25% cap the income supports about $980,000 |
| Former Quality Inn, Columbus, NE (full-service, unflagged, 1973, water park) | 140 | $4,700,000 | $33,571 | Room sales $2.0M to $2.1M; food and other about $1.6M | NOI not shown; pitched as hotel or apartment conversion |
Sources 1 to 3. RevPAR is revenue per available room per night. The Houston listing's RevPAR is about $30, derived from its revenue.
2What the market pays, and what it costs to build
| Benchmark, 2026 | Figure | Source |
|---|---|---|
| Hotel cap rate, average Q2 2026 | 7.7% | HVS; "normal" stabilized 8.0% to 8.5%, older hotels facing renovation higher |
| Price per room, deals over $10M, Q2 2026 | $218,000 | LW Hospitality Advisors, 107 sales |
| Cost to build, limited-service | $170,000 to $197,000 a room | HVS 2026 development cost survey; select-service $200,000; full-service $467,000 |
| U.S. occupancy forecast, 2026 | 63.1% | CoStar and Tourism Economics |
| Operating margin | 22.8% EBITDA | CBRE Trends, 2,216 hotels, 2025; economy and midscale margins shrank |
| Loans behind on payments, limited-service hotels | 10.3% | Trepp, Sept 2026; full-service 5.9%; extended-stay 3.9% |
Sources 4 to 8. The $218,000 average is institutional deals; sub-$10M hotels trade in a different market, which is why survey cap rates need a discount for small assets.
3What forced sales cleared at this year
| Sale | Rooms | Price | Per room | Against |
|---|---|---|---|---|
| Hyatt House, Pleasant Hill, CA (foreclosure, June 2026) | 142 (one report says 162) | $3.3M | $23,200 | Northern California median $109,243 a room in 2025 |
| Hyatt House, Pleasanton, CA (foreclosure, 2026) | 128 | $800,000 | $6,250 | As reported; likely a lender's credit bid |
| NoMo SoHo, New York (Chapter 11, Feb 2026) | 264 | $121M | $458,000 | $155M of bond debt |
| Hampton Inn, Sugar Land, TX (Chapter 11 auction, Nov 2025) | 122 | Undisclosed | — | 11 offers; cleared at 117% of the opening bid |
Sources 9 to 12. Distress concentrates in limited-service hotels.
4How we would price the three
| Hotel | Our read |
|---|---|
| Sloan's Motel | Rebuild NOI from three years of tax returns. If the implied $160,000 holds, $990,000 is a 16% yield on an exterior-corridor 1960 motel; if NOI is half that, the price is market. The flyer does not say which. |
| Quality Suites | $3.6M is priced on a turnaround. At the HVS "normal" 8.25% cap, today's income carries about $980,000. The buyer is paying $2.6M for its own operating plan and a completed brand renovation. |
| Columbus full-service | $33,571 a room against $467,000 to build. About 1.3 times total revenue. Value sits in the alternative use (apartments) and in whether the water park and meeting space can be run profitably in a town this size. |
5Before you bid
- STR report and tax returnsOccupancy, rate and RevPAR against the competitive set, and NOI from returns, not the flyer.
- The brand's renovation list (PIP)Price it before bidding; it is the second purchase price. The franchisor must approve a transfer.
- Replacement cost is a ceilingBelow it is normal for old product in small markets.
- Debt termsSBA 7(a) loans run up to $5M at prime-based rates; securitized hotel lenders in 2026 wanted 13.8% debt yields.
- Alternative useZoning and conversion cost for apartments or senior housing, where the hotel numbers fail.
- Price against forced salesPer room, in the same region, this year.
Sources
- LoopNet, 1901 Rose Ave, Burlington CO: loopnet.com
- Crexi, Quality Suites Houston NW Cy-Fair: crexi.com
- LoopNet, 265 33rd Ave, Columbus NE: loopnet.com
- HVS U.S. Market Pulse, July 2026: hotel-online.com
- LW Hospitality Advisors Q2 2026 major hotel sales survey: hotel-online.com
- HVS U.S. Hotel Development Cost Survey 2026: hotel-online.com
- CoStar and Tourism Economics forecast, Aug 2026: hospitalitynet.org; CBRE Trends margins via Lodging Magazine, May 2026
- Trepp by service level, Sept 2026, via CRE Daily: credaily.com; securitized hotel loan terms, Commercial Observer, June 2026: commercialobserver.com; SBA 7(a) terms: sba.gov
- Pleasant Hill foreclosure sale: hotel-online.com, June 15, 2026
- Pleasanton foreclosure sale: Hotel-Online, June 24, 2026 (a separate report in the same series)
- NoMo SoHo sale, Commercial Observer, Feb 2026: commercialobserver.com
- Hampton Inn Sugar Land auction: hotelmanagement-network.com
Listing figures are the brokers' as of the date read. Derived numbers are DHI Capital's arithmetic. Not investment advice.
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