FINANCIAL UPSIDE:
The 9-guestroom and 7-cabin
‘Guest’ extended-stay lodging property is located
near the east-entrance to Rangely, the center of Colorado’s
Oil and Natural Gas exploration and production region. With consistent
high occupancy rates of 90%-plus, this property’s
9-guestrooms and seven (7) brand-new, fully equipped cottages rent
strictly by the week on an ‘Extended Stay’ basis.
While providing housekeeping-service twice a week, its owner/operators
are NOT tied to the property 24/7 like quite a few motel operations
call for.
Rangely’s lodging inventory
at this time consists of 86-rooms/cabins in three lodging properties:
the Budget Host Inn with 37-rooms, the Adora Inn with 32-rooms, and the
Subject Property with 16-units. There is one additional 50-motel under
construction on the west side of the town, but apparently mired in
permit issues, and perhaps other matters too, construction has been
suspended at this time.
A savvy Buyer of the
Subject Property would keep track of the local motel room rates, and
adjust its own weekly rates accordingly, yet sensibly, along with the
competition. The two motels in town currently (May 2008) quote $89.00
per room-night for two people, plus sales & lodging tax of
8.419% ($7.50). Sales and Lodging Taxes are NOT applicable at the
extended-stay Subject Property. Giving consideration to the fact that
many, if not most, lodging residents are employees of Exxon, Chevron,
Shell, etc., and/or their sub-contractors, all staying longer time
periods at an average weekly rate of approximately $325.00. The Subject
Property’s equivalent to a daily rate equals approximately
$46.43 for a guestroom or new cabin of equal or better quality, versus
paying $96.50 ($89.00 plus $7.50) per night at one of the two motels.
Considering the near 100%
occupancy in place, rent increases at the Subject Property will not
cause expense elevations, and without any competitive lodging
facilities within a radius of 60-miles (Vernal, UT, and Meeker, CO), it
is highly doubtful that a resident would choose to drive daily
120-Miles further than he/she absolutely has to.
While
some potential
Buyers, new to the industry, may be in the belief that low occupancies
offer greater financial opportunities, it is indeed the very Opposite.
While with a high occupancy already in place, it may not cost anything
to sensibly raise Room Rates and achieve greatly enhanced Profits,
boosting Occupancy Rate is usually very expensive and almost always -
quite impossible!
As in any active town, much
residential construction is taking place in Rangely, and of the
86-guestroom total, even if the new 50-room motel opens anytime soon,
most likely it will not cause any occupancy reduction for the original
lodging facilities whatsoever. Considering the high occupancies of the
motels, the high number of reservations they still have to turn down,
and the potential guests being sent away every night, 50-rooms more or
less will be no detriment at all - it will make the busy town only
busier.
LOCATION -
Rangely, Colorado, is located at or near the center of Piceance Basin,
which holds a verified world-record of 800-billion barrels of
recoverable natural crude oil contained in shale rock, this region also
holds an immense wealth of natural gas and crude oil in liquid form.
While Chevron has been active in town since 1931, and most other oil
and gas conglomerates having been around for more than twenty-years
too, in the last few years each has brought more and more staff and
executives to town.
The Subject
Property’s location within Rangely is absolute prime.
Colorado Highway 64 is not only an attractive, designated
‘scenic’ road, it is also the town’s main
thoroughfare. With the fully equipped cabins being new, the property is
in truly 1st
Class condition. With the selling
family’s ownership in place since 1962, this is not an
emergency-sale at all. The planned sale is caused by a desire to
retire.
PRIMARY CORPORATE GUESTS
consist not only of Chevron, Exxon/Mobil, and Shell, but also their
manifold well-heeled sub-contractors like Pioneer Natural Resources,
Nautilus (Geology), Basic Energy, Elenburg Exploration, United
Companies (Drilling), Pro-Technics, Colorado Division of Wildlife,
Superior Well Service, the Rangely Regional Hospital, etc.
TERMS & CONDITIONS:
Cash; commercial financing; or SBA-guaranteed 7a-loan, requiring a
Twenty Percent (20%) down payment in verifiable Buyer-cash, will be
available to qualified Buyers and procured through Anton Hospitality.
PROPERTY IMPROVEMENTS: 9-guestrooms
in a 2-story building (1962), plus seven (7) new Cabins/Cottages, fully
equipped with full baths, refrigerators and microwaves opened in late
2006. One Cabin, larger than the others, also features a small office,
rarely needing to be staffed, and laundry facility. Heating and cooling
is provided via individual HVAC units, and state-of-the-art telephone
service, high-speed Internet, coffeemakers, refrigerators, microwaves
ovens, TV’s, and quality furnishings are in place. A
profitable guest laundry is part of this successful lodging operation.
The
facilities are situated on approximately 34,280 square feet (+/-) of
land, and its mature trees provide shaded parking to residents.
Adjacent land may be available for expansion.
FINANCIAL
INFORMATION:
IRS Tax Returns and Year-End Financial Statements will be available to
qualified Buyers after a pre-arranged showing by appointment only.
Sales & Lodging Taxes are NOT applicable at this extended-stay
property. Current Rental Rates are available.
CURRENT ANNUALIZED
REVENUES:
Approximately $277,000.00
2007 EXPENSES: Advertising $2,218; Car/Truck
Expenses $3,474; Hazard & Liability Insurance $3,431;Contract
Labor (Housekeeping) $8,660; Office Expense $2,806; Repair &
Maintenance $12,219; Supplies $8,241; Property Taxes $3,979; Utilities
$18,058; Other Expenses (including personal) $10,095; Cleaning
& Laundry $2,271; and Towels & Sheets $6,435.
ATTRACTIONS: Rangely, a very nice and
peaceful, yet highly active town is situated in beautiful northwestern
Rio Blanco County (Population about 7,500). Shopping, restaurants,
golf, abundant sightseeing, and a municipal airport with a renowned
flight school are available. Dinosaur National Monument is located
about 20-miles to the northwest, Vernal, UT, about 60-miles northwest,
Grand Junction (pop. 35,000) approximately 90-miles to the south, Salt
Lake City 225-miles west, and Denver, about 280-miles to the southeast.
At an elevation of 5,297 feet, the area offers superb hunting, great
fishing, rafting and boating on crystal-clear rivers and scenic lakes.
There are herds of pronghorn antelope, deer, elk,
and wild horses, and miles of scenic adventure roads, bike paths, and
hiking trails through high desert plateaus, canyons, and mountains. An
Outdoor Museum chronicles area history, while a recreation center with
indoor swimming pool, tennis courts, and racquetball courts stays busy.
COLORADO NORTHWESTERN COMMUNITY
COLLEGE -
has an enrollment of approximately 600 students. Its curriculum
includes a superior flight school that utilizes the municipal airport
for flight training. Regular contingents of US Air Force Academy Cadets
are amongst its students. The respected 2-year school offers a fine
academic menu, a variety of summer camps and conferences, and a special
climbing gym to learn basic and advanced mountain climbing skills.
WEBSITES OF INTEREST:
Rangely Chamber of Commerce
White River National Forest
Dinosaur National Monument
Colorado Northwestern Community College
Kenney Reservoir at Taylor Draw Dam
http://en.wikipedia.org/wiki/Rock_crawling
Canyon Pintado
Wild Horses of Rio Blanco
Information
herein has been obtained from what are believed to be reliable sources,
however, Anton Hospitality Brokers, Inc., cannot guarantee its
accuracy. References and information contained herein are approximate
only and are subject to changes and errors. Assumptions are based on
professional management and marketing of the property and future
operating results will vary depending on ownership. Buyers must conduct
their own investigation and due diligence and consultation with a
professional financial advisor is highly recommended. Price is subject
to change without notice.
