For sale City Hotel as a Prime Apartment House with Restaurant, 8,1% return, Frankfurt

115-room city hotel (apartment house), originally built in the early 1960s, extensively modernized on several occasions, and newly leased for a 24-year term, plus an option for 2 x 5 years. The hotel is in good condition with modern amenities. Due to the new lease agreement with a renowned operator (Trip Inn index) running until 2044, the hotel consistently generates an 8% yield, with an occupancy rate of just under 80% over the last 4 years. The tenant operates several dozen hotels and covers all ancillary costs. A complete core renovation took place in 2014, with further modernizations carried out subsequently. All rooms are equipped with air conditioning. The hotel facilities include a reception, lobby, bar, restaurant serving as a breakfast area with a terrace, and 2 conference rooms with a capacity for 50 people. Furthermore, there are 25 parking spaces available. Both an asset deal and a share deal are possible. The hotel currently generates €788 per room/apartment per month. There is apparent potential to expand the hotel by 50 rooms through an extension; however, no application has been submitted, nor is there a building permit in place. 

DATA

■ 115-room hotel 
■ 3-star hotel 
■ Built in the 1960s 
■ Fully renovated in 2014 
■ Modernized in 2024

■ Lease term until 2044 
■ 2,940 m² plot size 
■ 2,928 m² GFA (Gross Floor Area) 
■ 25 parking spaces 
■ 80% occupancy rate

■ €4,440 / m² GFA 
■ 8.1% actual yield 
■ 13x annual net rent multiplier 
■ €1.2 million annual rent 
■ €15 million purchase price