Red Roof Inn &
For Sale
$4,700,000
9902 Gulf Fwy # 128, Houston, TX 77034
136-key hotel near Hobby Airport with strong revenue.
Property Size48,132 SF
Days on Market163
Property Features for 9902 Gulf Fwy # 128
General Information
Standard status
Active
Size
48,132 SF
Class
C
Property subtype
Other
Building Details
Building Size
48,132 SF
Year Built
1984
Year Renovated
2022
Units
131
Listing Agency:
Seth Equities
Listed By:
Rorik Seth · License #9015432
(281) 968-5019
Source:
Commercialcafe
Added: Mar 26
Changed: Sep 3
Last Checked: Sep 2 at 1:39PM
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 Seth Equities
Investment Insights
Based on property information with market context.
The 136-key Red Roof Inn & Suites near Hobby Airport is available for purchase. The property benefits from multiple revenue streams, including hotel revenue, lease income, and restaurant lease income. The current owner has invested over $600,000 in capital expenditures to renovate the property, including rooms, bathrooms, FF&E, the parking lot, and interior paint. A potential conversion opportunity exists to transform the asset into a dual brand (HomeTowne Studios & Red Roof) to capture additional long-term stays in the Hobby sub-market. Currently, 36 units feature kitchenettes and demonstrate strong occupancy numbers. The property could also be converted to Multi-Family, subject to the City of Houston's entitlement process. Market rents within a 3-mile radius are approximately $859, according to CoStar. The property has approximately 178 parking spaces, meeting the parking requirement. Remaining capital expenditures for Multi-Family conversion would include installing kitchens in the remaining rooms and having the rooms sprinklered.
Key Highlights
- Strong in‑place revenue and NOI with multiple revenue streams.
- Over $600k in recent CapEx renovations to rooms, bathrooms, FF&E, parking lot, and interior paint.
- Conversion opportunity to a dual‑brand hotel to capture extended stays.
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
$256,794
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
5.46%
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%
$5,135,880
$5.1M
Cap Rate 7%
$3,668,486
$3.7M
Cap Rate 9%
$2,853,267
$2.9M
Market Conditions
NOI Build-Up for 48,132 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
$693.1K $14.40/SF
− Vacancy
−$152.5K −$3.17/SF
EGI
$540.6K $11.23/SF
− OpEx
−$283.8K −$5.90/SF
NOI
$256.8K $5.34/SF
Area
Houston, TX
Vacancy
22.00%
Lease Rate
$14.40 /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%
$5,135,880
Cap Rate 7%
$3,668,486
Cap Rate 9%
$2,853,267
Alternative Uses
Best Use
Hotel Hospitality
$3.67M
$3.21M – $4.28M
NOI $256,794 @ 7.0% cap · market cap 5.46%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$12.38M
$10.83M – $14.44M
NOI $866,376 @ 7.0% cap · market cap 18.43%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,020
Businesses Nearby
Explore this area
Business Placement
Demographics for 77034, TX
38,186
Population
14,188
Households
2.7
Avg Household Size
31
Median Age
13%
College-Educated
70%
High-School Grad
14.2 sq mi
ZIP Area
2,689
Density / Sq Mi
$59,516
Median Household Income
$35,127
Median Earnings
$1,178
Median Rent
$178,100
Median Home Value
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Hotel - 136-key hotel near Hobby Airport with strong revenue.
Where is this hotel located?
The property is located at 9902 Gulf Fwy # 128 Houston, TX.
What is the asking price?
The asking price for this property is $4,700,000.
What are key features of this property?
This property features: Strong in‑place revenue and NOI with multiple revenue streams.; Over $600k in recent CapEx renovations to rooms, bathrooms, FF&E, parking lot, and interior paint.; Conversion opportunity to a dual‑brand hotel to capture extended stays.
