Former Sheraton 114-room downtown hotelHotel for Sale: Days Inn
Market: Danville, Illinois

Located in downtown Danville, two blocks from the Palmer Arena Civic Center, the Days Inn was built as a Sheraton Hotel in 1974 and maintained its performance levels as a result of being the only branded, full-service hotel in the market, and the only hotel located downtown. The 114-room property offered a restaurant, lounge, meeting/banquet space, outdoor swimming pool, and exercise room. The hotel underwent more than $300,000 in renovations in recent years.

*NOI expressed after a 4% deduction for FF&E Reserve.

Hotel Owner Objective
The hotel owner’s desired outcome was to dispose of the hotel in order to reduce his portfolio size, and focus on limited-service hotel product. However, given the property's cash flow, the owner felt keeping the property would be a viable option if a maximized selling price was not achieved.

From a hotel buyer’s perspective, the property faced numerous future challenges. Demand generators for that location had been reduced as development within Danville had occurred primarily at the other Danville exit along I-74, and the downtown area had also seen recent economic downturn as a result of the loss of manufacturing jobs throughout the area. The franchise affiliation also made the property unattractive to many national and regional hotel management companies. Finally, Days Inn is a franchise favored by many hotel owner-operators, but only in a limited-service setting, and thus, many potential buyers did not want the challenge of running a full-service hotel.

Hotel Sales/Marketing Process
Through a hotel marketing approach that targeted Illinois hotel owners with similar franchises, full-service owner-operators, and real estate entrepreneurs located within two hours of Danville, Hotel Source, Inc. was able to expose the property to the most likely group of buyers. After the targeted dissemination of collateral materials to the previously mentioned buyer pools, multiple site inspections, and personal contact with many potential buyers, Hotel Source found a hotel buyer who was a residential developer in a neighboring town and who had formed a partnership with an experienced hotel operator.

Hotel Negotiations
Hotel Source continued to generate interest from other parties during the contract negotiation, and enabled the seller to negotiate a selling price that was 95% of the list price.

Conclusion
The seller was able to reduce his hotel portfolio size at his desired price, and the buyer was able to acquire a cash-flowing property that had upside through capital investment, such as enclosing the pool, updating the façade, and receiving subsequent tax breaks.

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