About
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SENIOR LEADERSHIP
PRess
30,000 SF
66 Keys
1700 S Palm Canyon Dr
Palm Springs, CA 92264
The Roadway Inn is a 60s built, 66-key hotel in Palm Springs, CA in an irreplaceable location. The Hotel is located 0.5 miles from the Tahquitz Canyon, a short walk to downtown Palm Springs and adjacent to other prominent hotels. The purchase price is $6.3M ($95,795/key), which was a significant discount to recent transactions in Palm Springs, which average$157k per key (pre-renovation) since January 2019. In terms of location, the Hotel is 500feet from the main thoroughfare that connects to the greater Palm Springs area. Currently, The Hotel’s existing management and market position limited its revenue potential. The improvements to property are $5.5M ($83,334/key) to renovate and upgrade the guestroom accommodations, the common areas and the amenities as well as bring in Life House to reposition and market the guest experience. The Roadway brand will be removed at acquisition closing. Between May and November 2022, extensive renovations will be performed on the entire property, repositioning it to the LifeHouse Hotel Brand. Improvements will include fully renovated guest rooms, an enhanced pool area, as well as updated common areas including the lobby and check-in spaces. The overall façade and signage will be modernized to align with the brand’s high-quality standards. Our thesis is that Palm Springs has been underserved, especially in this area, by upgraded “new” brands.
The yield on cost (unlevered) is slated to reachbetween13-15%, which we believe is unprecedent in this market environment.