About the project
The common area and existing 138 rooms will be completely renovated and an additional two stories, 12 suites, restaurant, 24/7 grab and go market, meeting space and elevator will be added to enhance the property’s layout. Both leisure and business travelers can find a repsite in the hotel set to be a “home away from home,” offering amenities such as a landscaped outdoor space with communal seating, state-of-the-art fitness room, a swimming pool and free Wi-Fi.
The new hotel will be a Wyndham Garden branded property, the flagship upper midscale hotel brand in the Wyndham Hotels Group portfolio. Wyndham is currently the largest hotel franchisor in the world, with over 20 brands in its portfolio with a reputation for functional and affordable accommodations meeting the needs of the personable “everyday traveler.”
The foundation for investing in the Project has been carefully curated through thorough research that underscored the convenience and relevancy of the hotel. Its Genesse St, Buffalo location is less than half a mile from the Greater Buffalo International Airport, centrally located to highly visited tourist destinations including downtown Buffalo, the University of Buffalo, Genesee Park, Lake Ontario and more. The set up for success lends well to New York’s 265 million visitor rate prior to COVID-19.
As for internal infrastructure, American Resort Management (ARM), a hospitality management firm, will provide comprehensive management services including design consulting and project management during the development phase; pre-opening activities, including set up and installation of equipment and furnishings, hiring and training staff and planning the market launch; and post-launch operations management, including sales and marketing, direct staff management and customer service.
ARM’s expertise is only matched by their portfolio of more than two dozen past and current properties, including those based in New York. Properties managed by ARM consistently outperform market competitive set in ADR, Occupancy, and RevPAR, according to Smith Travel Research Data Report (STAR).
The total Project cost is estimated at 13.25 million, including the purchase of the property and hard and soft construction costs. The Project will be capitalized by approximately 1.25 million in developer equity and a 3.0 million senior loan. The balance of the capital stack – a total of $9.0 million – will be raised from EB-5 investors.
A total of 10 investors (each with a capital contribution of $900,000) will invest directly in the New Commercial Enterprise, which in turn will loan the totality of investment to the Job Creating Enterprise to fund the Project’s development and operations.
The economic impacts of the Project were also analyzed by Barnhart Economic Services using a regional economic model. According to the analysis, total applicable employment impacts of the Project were estimated at 173 jobs. This includes 66 jobs for development/construction activities and 107 jobs for ongoing operations. The Project is also located in a Targeted Employment Area (TEA), and therefore qualifies for the lower investment amount of $900,000 per investor.
Based on total job creation and its location in a TEA, the Project can support up to 17 investors and raise up to $15.3million in EB-5 investor capital. Thus, the Project will create 50% more than the required jobs needed to support the number of investors in the New Commercial Enterprise’s Offering.
The Project is overall set to reach a stabilized occupancy rates of 69% by the third year, with an average daily rate (ADR) of $109.67. Net operating income is estimated to reach nearly 1.1 million in the first year of operations and will rise to an estimated $1.34 million at stabilization. The Project’s performance, paired with effective financial and operational management, will yield a healthy stabilized net operating income of 23% or better.
Such success is ultimately pinnacle of the convenience in location and the accessibility and comfortability in price for those wishing to explore the region without heavy spending on accommodations. In 2018-2019, 5.56 million people visited the Finger Lakes region, accounting for 17% of visitor spending in the upstate regions of New York. Of this, Monroe County was the most popular destination in the Finger Lakes and accounted for approximately 34% of traveler at more than $1.07 billion.
To this end, being just four miles from Buffalo city center, the Hotel will be ideally located to give guests convenient access to downtown’s shopping, dining, and entertainment options, as well as its historic sites, museums, and other cultural sites.
By investing in the project, patrons will find they have not only solidified their EB-5 visa, but also are a part of the booming tourism industry that COVID-19 has exposed to be one of the essential components to all our lives, something we cherish and hold on to when navigating our way through the world.