Land for Candlewood Suites San Antonio Medical Center Development Project Available

HVS Brokerage & Advisory presents a unique investment opportunity to develop an 86-key Candlewood Suites hotel on a 2.36-acre plot near South Texas Medical Center in San Antonio, Texas. The extended-stay hotel development promises high gross operating profit margins and net operating income flow-through, owing to strong market fundamentals and shortage of similar establishments in the area.

Development Opportunity The parcel, located approximately three miles northwest of the South Texas Medical Center, is fully entitled to develop an 86-key Candlewood Suites hotel. It also includes an adjacent pad site. Upon approval and development of the Candlewood Suites, the potential investor will have the opportunity to enter into a 20-year license agreement with InterContinental Hotels Group (IHG).

Business Model and Market Need The extended-stay model of Candlewood Suites is designed to promote guest independence, resulting in lower housekeeping costs and higher profits. The local submarket lacks more recent, premium-branded, extended-stay hotels, presenting a significant opportunity for the investor. The brand’s extended-stay orientation helps to drive occupancy levels and reduce the team member-to-guest ratio, resulting in lower operating costs and some of the highest profit margins in the industry.

Market Fundamentals The local submarket, which comprises four midscale to upper-midscale extended-stay and limited-service hotels, achieved an average occupancy level of 62.6%, average daily rate (ADR) of $101, and RevPAR of $63 for the trailing twelve-month (TTM) period ending February 2025. The proposed hotel is expected to be superior to its competitors in terms of quality and product offering, including in-room kitchens.

Location and Demand The property is strategically located near the intersection of Fredericksburg and Prue Roads, just west of the Huebner Road Exit along Interstate 10 (I-10), approximately three miles from the South Texas Medical Center (STMC) and five miles from Six Flags Fiesta Texas. Other corporate demand generators nearby include USAA’s corporate headquarters campus, LabCorp, Frost Bank, Whataburger, HEB, Valero, Tesoro, and Rackspace.

Investor Upside The offering presents a developer with an opportunity to construct a Candlewood Suites hotel in a major metropolitan area, with a potentially attractive exit capitalization rate. Following construction and stabilization of operations, the hotel asset would be a desired investment for the comprehensive pool of regional and national investors interested in premium-branded hotel investments.

The offering also includes an option to develop the adjoining pad site for retail use or quick-service restaurant (QSR) construction, providing natural synergy for an extended-stay hotel to increase guest retention further. Alternatively, an investor would have the ability to subdivide and sell off the pad site.

Inquire at HVS.