Ramada Modesto Investment
For Sale
Contact for pricing
1525 McHenry Ave, Modesto, CA 95350
91-key hotel with significant upside potential after recent renovations.
Property Size39,173 SF
Price / SF$216.86
Days on Market184
Property Features for 1525 McHenry Ave
General Information
Standard status
Active
Size
39,173 SF
Property subtype
Hospitality
Investment Type
Owner/User
Building Details
Year Built
1972
Year Renovated
2022
Buildings
1
Stories
2
Listing Agency:
Matthews
Listed By:
Ryan Kawai Sanchez · License #CA 02192199
Source:
Crexi
Added: Feb 5
Changed: Aug 8
Last Checked: Jul 16 at 4:52AM
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 Matthews
Investment Insights
Based on property information with market context.
The Ramada Modesto, a 91-key hospitality property, presents a compelling investment opportunity. The property underwent a comprehensive brand conversion completed in 2022 and has since achieved approximately 75% stabilization. Offered at $103,700 per key, the property is positioned for immediate equity growth. The hotel's 2025 RevPAR index sits just below 70%, trailing a comp set largely comprised of inferior properties. This performance gap highlights an opportunity for a hands-on manager to implement aggressive sales strategies, improve online reputation, and reclaim market share from aging competitors. The property size is 39173 square feet. Offers are due by March 5th, 2026. Tours can be scheduled by contacting the agents directly.
Key Highlights
- Significant operational upside potential with approximately 75% stabilization achieved after a 2022 brand conversion.
- Offered at a significantly below‑market price of $103,700 per key, presenting an opportunity for immediate equity growth.
- Opportunity to increase RevPAR index by implementing aggressive sales strategies and improving online reputation.
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
$301,436
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
3.55%
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%
$6,028,720
$6.0M
Cap Rate 7%
$4,306,229
$4.3M
Cap Rate 9%
$3,349,289
$3.3M
Market Conditions
NOI Build-Up for 39,173 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
$705.1K $18.00/SF
− Vacancy
−$70.5K −$1.80/SF
EGI
$634.6K $16.20/SF
− OpEx
−$333.2K −$8.51/SF
NOI
$301.4K $7.69/SF
Area
Modesto, CA
Vacancy
10.00%
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%
$6,028,720
Cap Rate 7%
$4,306,229
Cap Rate 9%
$3,349,289
Alternative Uses
Best Use
Hotel Hospitality
$4.31M
$3.77M – $5.02M
NOI $301,436 @ 7.0% cap · market cap 3.55%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$13.16M
$11.52M – $15.36M
NOI $921,349 @ 7.0% cap · market cap 10.85%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,974
Businesses Nearby
Explore this area
Business Placement
Demographics for 95350, CA
55,344
Population
20,327
Households
2.7
Avg Household Size
37
Median Age
20%
College-Educated
85%
High-School Grad
8.8 sq mi
ZIP Area
6,289
Density / Sq Mi
$73,611
Median Household Income
$43,428
Median Earnings
$1,483
Median Rent
$397,100
Median Home Value
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Hotel - 91-key hotel with significant upside potential after recent renovations.
Where is this hotel located?
The property is located at 1525 McHenry Ave Modesto, CA.
What is the asking price?
The asking price for this property is $8,495,000.
What are key features of this property?
This property features: Significant operational upside potential with approximately 75% stabilization achieved after a 2022 brand conversion.; Offered at a significantly below‑market price of $103,700 per key, presenting an opportunity for immediate equity growth.; Opportunity to increase RevPAR index by implementing aggressive sales strategies and improving online reputation.
