Best Western Plus Pearland / Houston Medical Center

Investment Overview

Seth Equities is pleased to present the fee-simple sale of the Best Western Plus Pearland / Houston Medical Center Hotel, a 61-key, three-story, interior-corridor upper-midscale hotel completed in 2025 and situated on 0.999 acres with direct access to the Sam Houston Tollway (Beltway 8) at Cullen Boulevard in south Houston. The newest hotel in its market — offered well below replacement cost. Delivered in July 2025, the Property is the only new-build upper-midscale hotel within a five-mile radius in more than five years and the only delivery within three miles over the trailing twelve months. It carries no property improvement plan, no deferred maintenance, and no near-term capital obligation. Building systems, roof, and the full FF&E package are first-generation, installed to current Best Western Plus design guidelines and approved by Best Western Design prior to installation. A buyer inherits an entire FF&E cycle. At $108,197 per key, the offering sits at roughly 53–62% of the $175,000–$205,000 per-key cost to deliver comparable upper-midscale product in Houston today — before land, and before a two-to-three year entitlement and construction timeline. The asset has already absorbed entitlement risk, construction risk, and lease-up. A buyer cannot replicate it at this basis. A completed lease-up and a demonstrated demand position. The hotel opened in July 2025 and executed one of the fastest lease-ups in the submarket, moving from 42.4% occupancy in its first reported month to a 76.4% year-to-date average through May 2026. It has ranked first in occupancy among its seven-hotel competitive set every month of 2026, outperforming established Hilton and IHG product on merit. Room revenue in the first half of 2026 already exceeds the entire 2025 stub period by more than 100%. The value-add lever is rate, not demand. During lease-up the Property priced to fill, and that discount has not been unwound. It currently runs a year-to-date ADR of $93.61 against a competitive set averaging $110.54 — a $16.93 per-night gap to a peer group whose average age is 19 years and whose newest member opened in 2011. Weekend occupancy of 92.5% Friday and 96.1% Saturday at a premium weekend rate index demonstrates guest willingness to pay; the constraint is midweek yield management. Recapturing even half the gap against the established 76% occupancy base is worth approximately $115,000 of near-pure flow-through annually. Supply is constrained. Only five upper-midscale hotels totaling 370 rooms sit within five miles, with no deliveries in the trailing twelve months other than the subject. Just over 600 rooms are forecast for delivery across metro Houston in 2026 — the lowest annual total in a decade. Brand and structure. Best Western Plus membership under a 20-year Extended-Length Membership Agreement, property TX973, carrying a 3.5% royalty in years one through five — materially below the 5–6% typical of comparable upper-midscale brands. A three-mile Member Market Area and six-mile impact radius provide contractual protection against same-brand encroachment. The Property is owner-operated and offered unencumbered by any management agreement, free and clear of existing financing, on an all-cash or buyer-financed basis. As an owner-operated hotel below the SBA size standard, it is a candidate for SBA 504 or 7(a) financing. Detailed financials, benchmarking data, and full diligence materials are available in the secure virtual deal room upon execution of a confidentiality agreement. Rorik Seth | Principal & Managing Broker | Seth Equities 281-968-5019 | rorik@sethequities.com

Investment Highlights

• Brand-new 2025 construction — delivered July 2025, no PIP, no deferred maintenance, first-generation FF&E and building systems under original warranty
• $108,197 per key — approximately 53–62% of the $175K–$205K per-key cost to deliver comparable upper-midscale product in Houston today
• #1 in occupancy among its seven-hotel competitive set every month of 2026, with 76.4% year-to-date occupancy through May
• Quantified rate upside — the newest asset in a peer group averaging 19 years of age currently prices sixth of seven; rate, not demand, is the lever
• Favorable brand economics — 20-year Best Western Plus membership at a 3.5% royalty through year five, with 3-mile territorial protection
• Constrained supply — only five upper-midscale hotels totaling 370 rooms within five miles, with zero competing deliveries in the trailing twelve months