Sell your hotel & motel
Flagged or independent, with a PIP coming due or a demand generator that left. We buy hotels as operating businesses, not as leases.
Hotel & Motel at a glance
- Typical deal size
- $1.5M – $20M
- Lease structure
- Owner-operated — an operating business, not a lease
- Typical term
- Nightly
- Escalations
- Rate-driven, revalued daily
Overview
What hotels & motels are really worth
Our read
A hotel is the least real-estate-like asset in commercial real estate. There is no lease, no tenant, and no term. Revenue resets every night, and the property is really an operating business with a building attached.
That makes trailing financials both more important and more misleading than in leased assets. A property running at 65% occupancy might be outperforming its competitive set or badly losing share, and occupancy alone cannot tell you which. RevPAR index against the comp set can.
The factor that catches owners most often is the property improvement plan. A brand-mandated PIP for a tired property routinely exceeds a year of net operating income, and it is frequently triggered by exactly the event the owner is contemplating — a sale, or a franchise renewal. Owners who have deferred FF&E cycles to protect cash flow discover that the deferral was a loan, not a saving.
Valuation
How we underwrite it
The method
We underwrite hospitality on performance against the competitive set rather than on absolute occupancy, because share is what tells you whether the property or the market is the problem. Those two situations are worth very different numbers.
PIP exposure is modeled explicitly. If a plan is outstanding or a franchise renewal is approaching, we price the capital requirement into the offer rather than discovering it in diligence. The same goes for deferred FF&E cycles, roof, and mechanical, all of which compound faster in hospitality than in any leased asset.
Where the operation is genuinely impaired, we underwrite the alternative uses in parallel. Limited-service and extended-stay product converts to residential more readily than most commercial buildings, and for a property that has lost its demand generator the conversion value frequently exceeds the going-concern value.
What we do not require is a stabilized operation. Distress, deferred capital, and a PIP you cannot fund are the reasons to call, not reasons to wait.
What moves the number
- 01RevPAR against the competitive set, which matters far more than occupancy or rate alone
- 02Flag versus independent, and if flagged, where the property sits in the brand's PIP cycle
- 03Property improvement plan exposure — a PIP coming due can exceed a year of net operating income
- 04Demand generators within the market and whether they are durable or event-driven
- 05Franchise agreement remaining term and transferability on sale
- 06Deferred capital in guest rooms, roof, and mechanical, which compounds quickly in hospitality
Capital markets today
- 10-yr Treasury
- 5.24%
- 4.12% a year ago
- SOFR
- 3.87%
- 4.2% a year ago
- 30-yr mortgage
- 7.28%
- 6.3% a year ago
- CRE loan delinquency
- 1.53%
- 1.57% a year ago
- CRE prices, YoY
- 6.58%
- -2.7% a year ago
Sources: FRED DGS10, 2026-10-01 · FRED SOFR, 2026-10-01 · FRED MORTGAGE30US, 2026-10-01 · FRED DRCRELEXFACBS, 2026-04-01 · FRED COMREPUSQ159N, 2026-01-01
Diligence
What a buyer actually looks at in a hotel & motel
- Check 01
STR report and competitive set performance
RevPAR index against the comp set is the only reliable measure of whether the property is winning or losing share. Occupancy alone hides rate erosion.
- Check 02
Property improvement plan status and cost
A PIP is a brand-mandated capital requirement that frequently exceeds annual NOI and is often triggered by a change of ownership.
- Check 03
Franchise agreement term and transfer provisions
Whether the flag conveys, and on what terms, can change the value of the asset more than the building condition does.
- Check 04
Guest room condition and FF&E age
Soft goods and case goods run on defined replacement cycles. A property that skipped a cycle is carrying a deferred liability, not saving money.
- Check 05
Roof, HVAC, and life-safety systems
Hospitality mechanical runs hard and continuously. Life-safety deficiencies also carry liability exposure beyond the repair cost.
- Check 06
ADA compliance across guest rooms and public areas
Hospitality draws more ADA litigation than most property types, and non-compliant room counts are a defined remediation cost.
Backfill risk
What happens if the tenant leaves
The tenant-goes-dark scenario
A hotel does not backfill, it repositions — and that is the central underwriting question for anything distressed in this asset class. There is no tenant to replace. If the operation is not working, the options are a new operator, a new flag, or a new use entirely.
Re-flagging is the common path and it is expensive. Moving from one brand to another almost always triggers a property improvement plan, and the PIP for a tired property can exceed a year of net operating income. That cost is the real price of the flag, and owners frequently discover it only when they try to sell or renew.
Conversion is the other route, and limited-service and extended-stay product converts more readily than most commercial buildings because the plumbing and egress are already residential in character. Older roadside motels in particular have been converted to workforce and supportive housing at scale. Whether that works is a zoning and floorplate question, and where it does work the property is often worth more converted than operating.
Why this matters to you
Every buyer prices the tenant-goes-dark scenario, whether or not they say so out loud. It is the largest hidden input into the cap rate you get offered.
Understanding it before you go to market is the difference between negotiating and being negotiated with.
Who sells to us
Situations we see most often
- Owner-operator facing a PIP they will not fund
- Independent motel whose owner is retiring with no successor
- Franchise agreement expiring and the brand requiring reinvestment to renew
- Property that lost a demand generator — a plant closure, a rerouted highway
- Owner who bought at peak leverage and is now facing a maturity
Buy box
What we buy
- 01Flagged and independent, $1.5M to $20M
- 02PIP exposure priced in, not used to retrade
- 03Underperforming and distressed operations
- 04Conversion candidates
Process
How selling to Dizposition works
Day 0
01Send us the property
Address, asset type, and the lease if there is one. That is enough for us to start.
- 02
We underwrite it
Our underwriting runs the income against current market pricing and the cost of capital. No lowball anchor.
10 minutes
03You get a firm offer
In 10 minutes, with the math shown. You will know exactly how we got there.
As fast as 30 days
04Close on your timeline
As fast as 30 days, or as slow as you need. We are the principal, so the date is yours.
FAQ
Selling a hotel & motel
I have a PIP coming due that I cannot afford. Can I still sell?
Yes, and this is one of the most common reasons owners in this asset class call us. A PIP is a quantifiable number. We price it into the offer rather than requiring you to fund it first, which is exactly what a conventional buyer's lender would demand.
My motel is independent, no flag. Does that hurt the value?
It changes how we underwrite rather than automatically lowering the price. Independents trade on trailing performance and location rather than brand distribution. In some markets an independent with a loyal base outperforms a flagged competitor paying franchise fees.
Occupancy is down since a major employer left. Is it sellable?
Yes. A lost demand generator is a real and permanent change to the income, and the number will reflect it — but properties in this position are frequently better candidates for repositioning or conversion than for continued operation, and that can be worth more than the hotel income suggests.
Could my motel be converted to apartments?
Often, more readily than most commercial buildings, because the plumbing and egress are already residential in character. Older roadside product has been converted at scale. It comes down to zoning and unit configuration, and where it works the conversion value can exceed the operating value.
How long does it take to sell a commercial property to Dizposition?
You get a firm written offer within 10 minutes of sending us the property. If you accept, you can close in as little as 30 days — most of that is title work and your own timeline. There is no listing period, no marketing, and no waiting on a buyer's financing contingency.
Can I sell my property as-is?
Yes. We are the buyer, so there is no lender requiring repairs and no inspection contingency to renegotiate against you. Deferred maintenance, a failing roof, an aging tank system — we price it into the offer rather than asking you to fix it first.
Can I sell with a tenant in place?
Yes, and in most cases a tenant makes the property more valuable to us, not less. We will ask for the lease, a rent roll, and any estoppel certificates. You do not need to deliver the property vacant.
What if my lease is short-term or about to expire?
Short remaining term is one of the main reasons owners come to us. A conventional buyer needs lease term to get financing, which is why short-dated assets sit on the market. We underwrite the real estate and the backfill prospects rather than the remaining term alone.
What if the property is vacant?
We buy vacant assets. Pricing shifts from an income approach to what the building and land are worth to the next user, which is a different calculation — but it is one we do routinely rather than one that disqualifies the property.
Do I need a broker to sell to you?
No. We buy directly, and there is no commission because there is nothing to market. If you already have a broker, we will pay them. Selling without one saves the commission, but you should understand you are also giving up price discovery — a broker's job is to find out whether someone will pay more than we will.
What documents do I need to get an offer?
The address and the lease are enough to start. To finalize, we will want the rent roll, the last two years of operating statements, the title commitment, any existing survey, and any environmental reports you already have. You do not need an appraisal or a broker package.
How do you determine your offer?
We underwrite in-place income against what the space would re-lease for, adjust for capital needs and any environmental tail, and apply a cap rate supported by comparable transactions. We show you the inputs. If you disagree with an assumption, we would rather argue about the assumption than about the number.
What are typical seller closing costs?
Title and escrow fees, any transfer or recording tax owed in your state, prorated property taxes, and payoff of any existing debt. Because we are the buyer, there is no commission and no marketing cost. Transfer tax varies significantly by state and is often the largest single line.
Will I owe capital gains tax when I sell?
Usually yes, on the gain above your adjusted basis, and depreciation recapture is taxed separately from appreciation. State treatment varies. This is a question for your CPA before you sign, not after — the structure of the sale can change the answer.
Can I do a 1031 exchange?
Yes. A 1031 exchange lets you defer federal capital gains by reinvesting in like-kind property, subject to a 45-day identification window and a 180-day closing window from the date you sell. You must have a qualified intermediary in place before closing — it cannot be arranged afterward. Most states conform to federal treatment, but a few do not.
Can I sell if I am behind on payments or facing foreclosure?
Yes, and speed is the reason to move early rather than late. We can close on a defined date, which is what a lender or a receiver generally needs to see. Send us the payoff figure and any notices you have received.
Can I sell a property I inherited or that is in probate?
Yes. Probate sales take longer because the court timeline governs, not ours, and multiple heirs need to agree on the price before anything can close. We are used to working around both. Inherited property also generally receives a stepped-up basis, which can change the tax math substantially.
What if there is environmental contamination?
Send it anyway. Environmental history is one of the most common reasons a conventional sale falls apart, and it is one of the reasons owners call us. We price the remediation and the residual liability into the offer rather than walking away at the Phase II.
Is there any cost or obligation to get an offer?
None. There is no fee, no listing agreement, and no obligation to accept. If our number does not work for you, you keep the underwriting we showed you and we part ways.
Markets
Top markets we buy hotels & motels in
Where the inventory is
60,776 U.S. establishments · Traveler accommodation
- 01Sell a hotel & motel in California6,419
- 02Sell a hotel & motel in Texas5,819
- 03Sell a hotel & motel in Florida3,818
- 04Sell a hotel & motel in New York2,587
- 05Sell a hotel & motel in Georgia2,256
- 06Sell a hotel & motel in North Carolina2,048
- 07Sell a hotel & motel in Virginia1,694
- 08Sell a hotel & motel in Pennsylvania1,647
- 09Sell a hotel & motel in Michigan1,570
- 10Sell a hotel & motel in Illinois1,554
Sources: U.S. Census Bureau, County Business Patterns, NAICS 7211, 2023
Browse by state
50 state markets
- Arizona
- Texas
- Florida
- Alabama
- Alaska
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
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- Ohio
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- Oregon
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- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Utah
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- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Other property types
- Gas Stations & Convenience Stores
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- Parking Garages & Lots
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- Coffee Shops
- Liquor Stores
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- Urgent Care Centers
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- Dollar Stores
- Cell Phone Stores
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- Data Centers & Battery Farms
- Post Offices
- Government Buildings
- Auto Dealerships
- EV Charging Stations
- Hospitals & Surgery Centers
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10-minute offer
Ready to sell your hotel & motel?
Send us the property and the lease. You'll have a firm offer, with the math shown, in 10 minutes.


