What factors influence the cost of land for an Embassy Suites hotel?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Many lenders will require an environmental assessment report before lending purchase money.
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- These estimates do not include the cost of the real property due to wide variations in costs among geographic areas and at different sites. The cost of land for a hotel varies depending on location, size, market prices in the area, accessibility, and special assessments, among other factors. If you are converting an existing hotel that you already own or lease, you may have no additional real property costs.
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- These estimates relate to a hotel with the elements we require (food and beverage, recreational, and other facilities as applicable). These estimates do not take into account local requirements such as earthquake requirements or impact fees.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 41–45)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the cost of land for a hotel is subject to several variables. These include the location of the property, its size, prevailing market prices in the area, accessibility, and any special assessments that may apply. These factors can cause significant variations in real estate costs for prospective franchisees.
For franchisees converting an existing hotel that they already own or lease, there may be no additional real property costs. However, for new developments, the cost of land will be a significant factor in the initial investment. It is important to note that the estimated initial investment figures provided in the FDD do not include the cost of real property due to these wide variations.
Before purchasing land, Embassy Suites recommends obtaining an environmental assessment to determine the land's environmental condition. This assessment can help identify potential issues that could affect the property's value or require remediation. Many lenders also require an environmental assessment report before providing financing for the land purchase. Therefore, prospective franchisees should carefully consider these factors and conduct thorough due diligence before making any real estate decisions.