Location: Clearlake, CA
The attached spreadsheet is a model for the Holiday Inn Express in Clearlake, CA, which is currently listed for $9,000,000. The sheet includes a pro forma income statement and balance sheet. The forecasted numbers were derived from market rates including prices of land, utilities, construction, etc. The numbers in the spreadsheet can easily be manipulated by changing the per unit prices and daily ratios at the top of the sheet.
The weighted average cost of capital used for this model was 7.71%. Using this percentage, the future cash flows were discounted, and the initial capital requirement of $8,945,000 was factored in. The net present value of this project was projected to be $(2,808,636). For this reason, we believe that the current listed sales price of this Holiday Inn Express is too high. A lower price would be required to make this an attractive investment.