31%+ Cash On Cash Off 2022 Revenues; 14%+ Cap

14%+ Cap Rate Off 2022 Revenues

The Tewari | Stampwala Hotel Advisors are pleased to announce the sale of the Mainstay Suites in Cotulla, Texas, one of the premier extended stay properties in the city. The list price for the property is $5,600,000. This 4-story, 65-unit, interior corridor property is exclusively comprised of suite units with kitchenettes. Its amenities include a business center, fitness center, bar, entertainment room, and the city's largest hotel pool.
Cotulla is roughly an equal distance from major metros Laredo, and San Antonio in Texas. Major industries and employers in the area include those stemming from oil and natural gas production, and government and its departments. Though revenues may be much higher in times of oil booms, the property performs well and presents owners an opportunity to acquire a hotel with strong cash flows.
Cotulla is the true "Hotel Capital" of Texas oil country. The town really took off in terms of hotel development around 2010 when oil barrel prices topped $100 per barrel. The local oil industry can have a profound influence on hotel industry in the town. Most notably when oil prices are high. Rates and occupancy can shift to staggering numbers when oil increases leaving the possibility of owners to realize ludicrous revenues that can really only be seen in towns with developed oil markets. This used to be a tremendous risk for owners to take but in recent years Cotulla has undergone developments to diversify the economic drivers to leave the town and hotels less dependent on oil booms to realize impressive revenues.
In late spring of 2023 the property began renovations on 14 of the 65 rooms on the property. For this reason revenues in recent months have been below their prior years benchmarks, despite STR showing continued improvement on the markets performance year over year.

Oil Production is trending up, Here is why that's good.

Seen on this page is an illustration for the picture of oil production going into the next few years. It forecasts oil will be pulled out of the ground at an increasing rate to meet the demands for oil consumption both domestically and abroad. The Eagle Ford Shale region where Cotulla lies, is a major producer of oil in southwest Texas and lies just below the Permian Basin. The area pumps out a large amount of oil relative to the countries production, and where oil flows, workers will go. This is a good thing as far as Cotulla is concerned. Not all of the patrons at the areas hotels are oil workers, however oil workers do make up a large portion of them. This is what will help sustain revenues at their current levels and perhaps to an even further extent moving forward.
The city of Cotulla, once largely dependent solely on the oil industry has seen a pronounced increase in the presence of workers in the sectors of government, law and border enforcement, and healthcare workers. This has provided stability, and now undermines the idea that Cotulla is a boom or bust town in terms of hotels and their achievable revenues. Contracts can be found in many of the hotels between management and the respective institutions that frequent the town and the areas around which allows owners to cash flow the properties to a comfortable degree throughout the year.