Two-Property Limited-Service Hotel
For Sale
Contact for pricing
1492 US-31, Traverse City, MI 49686
Two limited-service hotels totaling 117 guestrooms on Grand Traverse Bay in Traverse City, Michigan.
Property Size55,556 SF
Price / SF$179
Days on Market138
Property Features for 1492 US-31
General Information
Standard status
Active
Size
55,556 SF
Total Parking Spaces
133
Property subtype
Hospitality
Zoning
Commercial
Investment Type
Value Add
Building Details
Year Built
1985
Buildings
2
Stories
2
Listing Agency:
Avison Young - Atlanta
Listed By:
Jeremy Cabe · License #N/A
Source:
Crexi
Added: Apr 6
Changed: Aug 8
Last Checked: Aug 18 at 10:18PM
Displayed information is deemed reliable but is not guaranteed and should be independently verified. All listing content including descriptions, pricing, images are the copyrighted material of Avison Young - Atlanta
Investment Insights
Based on property information with market context.
Avison Young is pleased to present the opportunity to acquire a two-property limited-service hotel portfolio totaling 117 guestrooms in Traverse City, Michigan. The offering is positioned along the shores of Lake Michigan’s Grand Traverse Bay.
The Traverse City market is supported by year-round tourism demand tied to outdoor recreation, waterfront attractions, and the nationally recognized wine industry, with major demand generators including the National Cherry Festival and over 40 wineries across the Old Mission and Leelanau Peninsulas. Beyond peak seasonal travel, the area benefits from a stable economic foundation supported by healthcare, education, and regional infrastructure, including Munson Medical Center and Northwestern Michigan College.
Accessibility via Cherry Capital Airport (TVC) provides additional baseline demand beyond peak tourism periods.
The Traverse City market is supported by year-round tourism demand tied to outdoor recreation, waterfront attractions, and the nationally recognized wine industry, with major demand generators including the National Cherry Festival and over 40 wineries across the Old Mission and Leelanau Peninsulas. Beyond peak seasonal travel, the area benefits from a stable economic foundation supported by healthcare, education, and regional infrastructure, including Munson Medical Center and Northwestern Michigan College.
Accessibility via Cherry Capital Airport (TVC) provides additional baseline demand beyond peak tourism periods.
Key Highlights
- Two‑property limited‑service hotel portfolio totaling 117 guestrooms in Traverse City, Michigan
- Portfolio located along the shores of Lake Michigan’s Grand Traverse Bay
- Traverse City tourism demand includes the National Cherry Festival and a wine industry with 40+ wineries on the Old Mission and Leelanau Peninsulas
Financial Insights
Estimated NOI and Cap Rate
NOI = area × lease_rate × (100 − vacancy) / 100 × (1 − expense_ratio). Net Operating Income — what the owner takes home each year before mortgage payments and income tax. Effective rent (asking rent minus vacancy losses) minus operating costs (taxes, insurance, maintenance, management).
NOI / Yr
$418,003
Cap rate = NOI / list price × 100. Capitalization rate — annual return on a fully cash purchase, before financing. NOI divided by price. Higher means more income per dollar invested, but usually also more risk or older condition. 5–8% is typical for stabilized commercial property; double digits often signal distressed deals.
Cap Rate
4.18%
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$8,360,060
$8.4M
Cap Rate 7%
$5,971,471
$6.0M
Cap Rate 9%
$4,644,478
$4.6M
Market Conditions
NOI Build-Up for 55,556 SF
Vacancy — income lost from leasable area expected to sit empty during the year, subtracted from gross rent.
EGI (Effective Gross Income) — gross rent minus vacancy losses, the realistic income before paying operating costs.
OpEx (Operating Expenses) — recurring costs to operate the property (property tax, insurance, utilities, maintenance, management); excludes financing and capital improvements.
NOI (Net Operating Income) — income a property generates after operating costs but before financing and taxes.
Gross rent
$1.00M $18.00/SF
− Vacancy
−$120.0K −$2.16/SF
EGI
$880.0K $15.84/SF
− OpEx
−$462.0K −$8.32/SF
NOI
$418.0K $7.52/SF
Area
Grand Traverse County, MI
Vacancy
12.00%
Lease Rate
$18.00 /SF/Yr
Expense Ratio
52.50%
Simulate Cap Rate and NOI
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$8,360,060
Cap Rate 7%
$5,971,471
Cap Rate 9%
$4,644,478
Alternative Uses
Best Use
Hotel Hospitality
$5.97M
$5.23M – $6.97M
NOI $418,003 @ 7.0% cap · market cap 4.18%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$12.07M
$10.56M – $14.08M
NOI $844,807 @ 7.0% cap · market cap 8.45%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
193
Businesses Nearby
Explore this area
Business Placement
Demographics for 49686, MI
25,859
Population
13,261
Households
2
Avg Household Size
45
Median Age
46%
College-Educated
95%
High-School Grad
47.3 sq mi
ZIP Area
547
Density / Sq Mi
$71,198
Median Household Income
$40,373
Median Earnings
$1,209
Median Rent
$295,500
Median Home Value
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Hotel - Two limited-service hotels totaling 117 guestrooms on Grand Traverse Bay in Traverse City, Michigan.
Where is this hotel located?
The property is located at 1492 US-31 Traverse City, MI.
What is the asking price?
The asking price for this property is $10,000,000.
What are key features of this property?
This property features: Two‑property limited‑service hotel portfolio totaling 117 guestrooms in Traverse City, Michigan; Portfolio located along the shores of Lake Michigan’s Grand Traverse Bay; Traverse City tourism demand includes the National Cherry Festival and a wine industry with 40+ wineries on the Old Mission and Leelanau Peninsulas
