Can you explain Rev/Rar?What is a good formula to use in looking at Hotel/Motels to purchase?

Purchasing Hotel/Motel property.
In Buying Property - Asked by Sandy L. - Mar 9, 2010
Report Abuse
Answer this Question


greg a.
Burr Ridge, IL

RevPar = Revenue per available Room
See link below

Mar 9, 2010
Report Abuse
Peter A.
San Francisco, CA

I interested in getting a (30 rooms to 40 rooms ) S R O Hotel for long lease or purchase

Mar 9, 2010
Report Abuse
Brandi L.
Oak Brook, IL

Most use either a capitalization (CAP) rate, a price per key (room) or a multiple of gross revenue. I prefer the gross revenue approach to valuation as CAP rates are not necessarily meant for properties where a business component is involved in ownership and are better-suited for net leased assets. As multiples can vary by market, you will need to obtain recent comps from your area to determine what multiple of gross revenue hospitality properties are trading at.

Mar 10, 2010
Report Abuse
Commercial A.
Los Angeles, CA

gree with Action L. also use caution and seperate business income (restaurant, etc.)from rental income. Multiplyers for business and rental property can vary greatly.

Mar 10, 2010
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question