What factors affect the cost of land for an Embassy Suites By Hilton hotel?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
sion. 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 the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the cost of real property is not included in the estimated initial investment due to significant variations across different geographic areas and sites. Note 5 in Item 7 of the FDD specifies that the cost of land for an Embassy Suites By Hilton hotel is subject to several factors. These include the location of the property, its size, prevailing market prices in the area, accessibility, and any special assessments that may be in place.
For prospective Embassy Suites By Hilton franchisees, this means that the cost of land can vary widely. The FDD advises that if a franchisee is converting an existing hotel that they already own or lease, they might not incur additional real property costs. However, for new developments, land acquisition will be a significant factor in the overall investment. Franchisees should conduct thorough due diligence to assess these factors in their target market to accurately estimate their initial investment.
Before purchasing land, Embassy Suites By Hilton recommends obtaining an environmental assessment to determine the environmental condition of the land. This assessment can help identify potential issues that could affect the property's value or require remediation, adding to the overall cost. Many lenders also require an environmental assessment report before providing financing for the land purchase. Therefore, it is crucial for prospective franchisees to consider these factors and conduct appropriate investigations before making a purchase decision.