On the numbers we can document today, $7.0M is still a pass: it is a 5.6% going-in cap on a soft, no-rebound market. But the asset is running tied with the 29-year-old Wyndham next door and two full tiers below its true upscale peers, which means the topline shortfall is operator-created, not market-created. That is the fixable kind. Whether $7.0M is a steal or a trap comes down entirely to one number the broker has never produced: the Marriott PIP cost.
The seller is distressed. The existing loan ($8.6M) is larger than the asking price, current NOI covers only 0.62x of interest, and the property is bleeding $246K a year (debt service $639K less NOI $393K) [1]. "Fire sale, $7M gets it done" is a seller trying to escape a loan they cannot carry. That is leverage for us to push well below $7.0M, not a reason to rush.
| Basis | Value | Implied cap at $7.0M | Source |
|---|---|---|---|
| Trailing NOI (bank P&L, T-12 2025) | $393,024 | 5.6% | [1] |
| THM stabilized NOI (expense normalization only) | $453,712 | 6.5% | [1] |
| Value at our 8.5% market cap (trailing to stabilized) | $4.6M - $5.3M | - | [1] |
| Existing assumable loan balance | $8.6M | exceeds price | [1] |
| Debt service at 7.43% next reset (interest-only) | ~$639,000 | 0.62x DSCR | [1] |
At $7.0M, trailing cash flow yields a 5.6% cap and stabilized (expense side only) a 6.5% cap, both below our 8.5% hurdle. Nothing in the documented numbers gets there. The gap has to be closed by reclaiming rate, which the next two sections size.
The adjacent competitor is the Heritage Inn Suites, Trademark by Wyndham (STR# 34427, 133 rooms, Upper Midscale, built 1997), 0.22 miles away [3]. On 2026 year-to-date revenue it is running dead even with the SpringHill per room, and it is up while the SpringHill is down.
| Hotel | Tier | Rooms | 2026 YTD RevPAR proxy | YoY | Total room rev / day |
|---|---|---|---|---|---|
| SpringHill Suites (subject) | Upscale, 2016 | 94 | $56.67 | -3.7% | ~$5,327 |
| Heritage / Trademark by Wyndham | Upper Mid, 1997 | 133 | $55.61 | +9.3% | ~$7,396 |
Source: [4] tax-receipt proxy, matched Jan-Jul 2026 vs 2025. RevPAR is per-room by construction, so the 94-vs-133 room-count difference does not enter this comparison: the two are directly comparable. An Upscale Marriott should carry a 30% to 40% premium over a 29-year-old Wyndham. Instead it is tied, and on total dollars the Wyndham out-earns it by 39% ($7,396 vs $5,327 per day) because it has 39 more keys at the same rate.
Benchmarked against its true upscale-chain peers in this submarket, the SpringHill runs 25% to 32% below on RevPAR, and the entire gap is rate, not occupancy.
| STR index (2025) | vs comp set | vs true peers |
|---|---|---|
| Occupancy (MPI) | 107.5 | 94.6 |
| Rate (ARI) | 91.4 | 79.0 |
| RevPAR (RGI) | 98.3 | 74.7 |
Source: [2][3]. The STR comp set flatters the subject because 4 of its 6 members are Upper Midscale (including the 1997 Wyndham). Against real peers, occupancy is near par (MPI 94.6) while rate is the gaping hole (ARI 79.0, a ~$25/night ADR shortfall). The hotel is buying occupancy by underpricing.
$/available-room-day, 2026 YTD Jan-Jul, tax-receipt proxy [4]. True upscale peers run $83.93; the subject runs $56.67.
Closing the peer rate gap is where the deal math lives. The gap to true upscale peers is $20 to $27 per room-day (STR 2025 peers $76.33; 2026 YTD proxy peers $83.93; subject $56.67) [2][4].
These reclaim figures are illustrative arithmetic on sourced inputs, not a projection. Whether the rate is actually reclaimable depends on product condition, which is the PIP question below.
All-in basis is the price plus the PIP. The grid shows the resulting cap rate. Green clears our 8.5% hurdle, amber is marginal, red is a loss versus documented market value.
| All-in basis (price + PIP) | Trailing NOI $393,024 |
Stabilized NOI $453,712 |
+ half rate gap ~$627,000 |
Broker proforma $726,511 |
|---|---|---|---|---|
| $7.0M (PIP $0) | 5.6% | 6.5% | 9.0% | 10.4% |
| $8.0M (PIP $1.0M) | 4.9% | 5.7% | 7.8% | 9.1% |
| $8.5M (PIP $1.5M) | 4.6% | 5.3% | 7.4% | 8.5% |
| $9.0M (PIP $2.0M) | 4.4% | 5.0% | 7.0% | 8.1% |
Cap rate = NOI / all-in basis. Trailing and stabilized NOI are documented [1]. "+ half rate gap" is trailing NOI plus ~$234K of illustrative rate reclaim [7]. "Broker proforma" is the OM Year-1 figure and runs bullish (12% above actual RevPAR into a still-soft submarket) [6]. The read: on documented cash flow every cell is red. $7.0M only works if the PIP is light (near $0 to $1M) AND the rate gap is genuinely reclaimable. If the PIP is $2M, even a successful half-gap reclaim lands at 7.0%, still under the hurdle. The PIP number decides the deal.