Anyone here familiar with ground up hotel development?
I'm trying to come up with a land residual for a DoubleTree Hotel, would be union construction and operation due to the location. Is there any rule of thumb or back of the napkin I could use, based on a % of total dev cost associated with the land, relationship between land cost per FAR and ADR, etc?
Just looking for some way to assess land per FAR value.
Thanks
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I've got some experience in this, although other people should put in their 2 cents too (I'm actually working on a Holiday Inn-to-DoubleTree re-flagging right now). I would say there is no short-cut to get to where you want to go. ADR is REALLY market--and even neighborhood--specific. Your construction costs will have to be estimated basically by your MSA since the cost to construct will be relatively consistent per market. Hopefully you can get some operating statement comps to estimate expenses. But I don't see any short-cut to get your answer, at least not one that will be reasonably accurate. It's actually why the hotel consulting groups are paid really well for their services.
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