Executive Summary
The Senate Luxury Suites is a 51 room property located in downtown Topeka, Kansas. The all-suites hotel offers a wide variety of suite types including hot tub suites, kitchenette suites, two-bedroom suites, studio suites and Tempur-Pedic suites. It was originally built in 1928 as an up-scale apartment building and has become a historic landmark, currently listed on the National Historic Register and the Kansas Historic Register.
Topeka (population 127,000) is 60 miles west of Kansas City, MO and is the capital of Kansas. Major city employers include the State of Kansas (7,949), Stormont-Vail Health Care (4,302), Goodyear Tire (1,577) and Blue Cross Blue Shield (1,294). Other notable major employers include Hill’s Pet Nutrition, Security Benefit, BNSF, Payless ShoeSource, and Frito-Lay.
The Topeka hotel market continues to thrive with four consecutive years of growth in hotel revenue for the city. Over that time hotel revenue in Topeka increased from $33 million to $37.9 million in 2016.
The property is situated in advantageously close proximity to largest employer in Topeka, the State Capitol (0.2 miles). While it’s safe to say the Capitol contributes to room demand all year long, the impact is most notable when the State Legislature is in session from January through May each year. With its downtown feel and unique architecture, the Senate Suites deserves attention from “lifestyle” investors in addition to traditional hospitality investors.
Also noteworthy to investors is the additional parking income ($8,100 in 2016). Current ownership has an arrangement in place with nearby businesses that allows them to utilize the additional parking lot for employee parking.
Current ownership spares no expense operationally, a fact that surely contributes to hotel’s superior performance; particularly the ADR which was $70 in 2016. In addition to the above average percentage of financial resources dedicated to operations, current ownership has also invested a significant amount in property updates that will benefit future ownership. The absence of franchise fees as well as the typically lower operating costs of the extended stay model suggest that cash flow has not yet met its full potential.
Don’t overlook this one based on its independent status. With its downtown location, $70 ADR, and consistent revenue the Senate Suites is worthy of your consideration.
