Limited-Service Hotel Feasibility Study, Bastrop, Texas: An SBA 504 Worked Case

Bastrop can absorb another branded limited-service hotel, but not at the leverage the sponsor requested. The city had 13,383 residents on July 1, 2025, against 12,720 a year earlier, and has grown 38.2% since April 2020 [1]. The county reached 118,908 [1]. The Starlink campus on FM 1209 employs more than 1,000 people, and permit filings describe a 1.1 million square foot factory with up to 500 more jobs [39]. When Everhome opened its 114 suites on February 18, 2025, the opening was tied to demand from SpaceX and The Boring Co. [24][23]. On the night of Wednesday, July 22, 2026, Choice's own booking page showed that hotel sold out [25].

The same evidence carries the warning. Branded supply in the city jumped in 2025: Everhome and Home2 Suites added 228 extended-stay keys between February and July [23][36]. Four more branded hotels are in the state record or under construction, with completion dates from December 25, 2026 to July 3, 2028 [15][18][19][20]. A hotel that closes its loan in 2027 opens into the middle of that wave. Its first two years are the years in which the new Marriott and IHG product competes for the same Starlink contractors, wedding blocks and SH 71 travelers.

The model therefore ramps occupancy slowly and prices rooms below the national average. On that basis the hotel earns $840,985 of net operating income in Year 2 and $961,134 in Year 3. The sponsor asked for a 504 structure with 15.0% equity. That fails twice: the equity tier for a new business in a special purpose property is 20%, and coverage in the Year 2 test comes to 0.82x. The structure that clears the 1.15x floor carries 39.1% equity ($5,430,039), a $6,943,784 bank first lien and a $1,513,745 debenture, for $8,457,529 of debt. Coverage then reaches 1.15x in Year 2 and 1.31x in Year 3.

That is a financeable hotel, but it is a different deal from the one proposed. Three facts would move the answer, and each is a lender condition below: an STR trend report for the named competitive set, a land price set by appraisal rather than by assumption, and the adopted city tax rate. A trend report that shows the set running above our occupancy and rate would release equity. One that shows the 2025 openings diluting the older hotels would not.

The census counts eight operating branded hotels in the city. Seven have a published key count, from 42 to 114 keys, taking the lower count where sources disagree; no confirmable count was found for the Comfort Suites [33][35][23][36][38][37]. Each row links the brand's own page for that hotel, confirmed on the date shown in the sources list; four of those pages refused an automated read and were confirmed through the brands' own listings in search results, so the lender confirms them. Key counts for most of the set come from secondary directories, because the brand pages do not print them; the lender should confirm each from the franchise or the appraisal district.

The set splits into three tiers. The Hampton and the Holiday Inn Express are the established upper-midscale hotels. The Hampton's 3,100 square feet of meeting space is the largest in the limited-service set [33], against 730 at the Holiday Inn Express [35] and 325 at Everhome [16]. Everhome and Home2 are new extended-stay product. The Best Western, Quality Inn and Days Inn are the economy and midscale tier; directories describe the Quality Inn as two stories with no elevator and the Days Inn as a two-floor, exterior-corridor motel [37][38].

The subject competes most directly with the Hampton and the Holiday Inn Express. It would be the newest transient hotel in town, and new product usually wins share from older hotels of the same tier. That share shift is not new demand, and the projection does not count it as such.

Three more lodging names appear on travel sites: a Super 8, the Bastrop Inn and the Tropicana Motel. No brand page or appraisal district record could be confirmed for them, so they stay out of the table and their size is a lender condition. The Hyatt Regency Lost Pines is a full-service resort and is context, not a competitor. Its key count was not found.

The pipeline is the decision-relevant table. Only one project has a published key count, the 121-key Fairfield and Staybridge. The Chronicle's account of the 75-acre, roughly $300 million Sendero plan includes a 120-room hotel alongside 782 apartments and more than 250,000 square feet of retail and dining [21]. The four branded buildings range from 63,000 to 99,798 square feet, depending on which report of the Sendero building is right [15][17][18][19][20]; for comparison, the 114-suite Everhome is 57,830 square feet [16]. On building area alone, each project is at least as large as Everhome, and each would enter a town whose older branded hotels run from 42 to 89 keys [33][37].

Three of the four are Marriott flags, two of them extended-stay or suite brands. That matters for the subject's brand choice. A Hampton or Holiday Inn Express already operates in town, and Fairfield arrives twice. The sponsor's franchise application will have to clear the brands' area protection, and the lender should see the radius terms before approval. Our note on franchise versus independent underwriting explains why the flag is part of the credit, not a detail of the pro forma.

The national pipeline points the same way, and at the same product. Lodging Econometrics counted 703,001 rooms in the U.S. construction pipeline at the end of June 2026, 133,216 of them under construction, and forecast 74,820 rooms to open in 2026, supply growth of about 1.3% [69]. The upper midscale and upscale chain scales, where select-service brands sit, held 214,027 and 159,252 of those pipeline rooms [70], and the Austin metro carries one of the deepest local pipelines, covered on the Austin market page. Bastrop's own wave, 228 extended-stay keys in 2025 and four more branded hotels by mid-2028, runs far ahead of that national pace. A new select-service hotel here competes for brand approval and for guests in the most crowded part of the pipeline.

The county appraisal district's search is a form, not an indexed record, so parcel numbers, tax years, assessed values and land areas for the set were not retrieved. That becomes a lender condition, because the assessed values of the 2025 openings are the best local evidence of what a new hotel is worth for tax.

Revenue is almost all rooms. The model multiplies 80 keys by 365 nights, by occupancy and by average daily rate, and adds a small line for meeting room rental, vending, pet fees and guest laundry at 2.5% of rooms revenue. Total revenue is $2,478,204 in Year 1 and $3,056,452 in Year 3.

Occupancy opens below the national level in Year 1, passes it in Year 2 and reaches 69.0% in Year 3, a point higher from Year 4 (the inputs table lists each year). U.S. hotels ran 62.3% in 2025, the first full-year decline since 2020 [49], and in August 2026 CoStar and Tourism Economics raised their 2026 forecast to 63.1% [67]. The stabilized level is set against the hotels the subject resembles, not the all-hotel average. Apple Hospitality's comparable portfolio of upscale, rooms-focused hotels ran 71.1% occupancy and $111.36 RevPAR in the first quarter of 2025 [56], and a hotel portfolio KBRA rated in December 2024 ran 74.5% over the twelve months to September 2024, at 101.3% of its competitive sets' occupancy [68]. Those are seasoned hotels holding their fair share; the subject is new and opens into a four-hotel pipeline, so it stabilizes a point or two below the Apple portfolio. It stabilizes above the national average for two local reasons: the weekday base around the Starlink campus is growing [39], and midweek compression is already visible, with Everhome sold out on a Wednesday in July 2026 [25]. Extended-stay hotels ran 77.8% in August 2026 against 65.5% for comparable hotels [54], which shows how much of Bastrop's contractor demand the two 2025 openings can hold. CoStar expects 2026 growth in midscale and economy RevPAR to come mainly from demand rather than rate [50], which supports a ramp built on occupancy.

Average daily rate reaches $148 in Year 3. No ADR for Bastrop is published. The aggregator prices found in the research carry no stay date and are asking rates, so they are not used. The model sits below the 2025 U.S. ADR of $160.54 [49] and the $156.56 select-service ADR in Apple Hospitality's first quarter 2025 portfolio [56], and above the $116.08 extended-stay average for the fourth quarter of 2025 [53]. That places the subject where a new upper-midscale hotel in a small, fast-growing town should sit.

Two checks matter more than any single input. First, the lender should compare the Year 3 RevPAR this implies with the trailing twelve months of the Hampton and Holiday Inn Express, which a trend report will give. Second, the Everhome sold-out night shows midweek compression in July 2026 [25]; a trend report will show whether that is a pattern or a single night. Our note on why the STR report is not the analysis explains how the trend report and this projection should be read together.

Total project cost is $13,887,569, or $173,595 per key. HVS put the 2025 median for limited-service and midscale extended-stay hotels at $170,000 to $197,000 per room, all-in, with construction costs still rising nationally [47]. The local filings are lower but incomplete: the 114-suite Everhome registered an estimated construction value of $13.0 million for a 57,830 square foot, four-story wood-frame building [16], and the Courtyard registered $10,000,000 for 63,603 square feet [15]. Owner estimates filed with the state exclude furniture, design, financing and land, so the model carries building and site work at $125,000 per key, above those filings. On the value side, U.S. hotels that sold for more than $10 million in 2025 averaged $211,000 per room [71]. Those trades lean to larger hotels in bigger markets, so they cap rather than support this hotel's value; a new limited-service hotel in a town of this size should not be underwritten to appraise above its cost.

The contingency is 10.0% of hard cost, the low end of the 10% to 15% that hotel construction lenders require [51]. Soft costs and construction interest are an allowance. Furniture, fixtures and equipment are carried at $16,000 per key; HVS's full-service median is $36,752 [58], and a rooms-only hotel needs about half.

Two items sit outside the 504 project. Pre-opening payroll, training and a working capital reserve are not fixed assets, and 504 proceeds fund fixed assets. The sponsor must show cash for them in addition to the equity in the table. The SBA fee on the debenture is added to project cost and shown as a use, so the sponsor's equity share carries part of it.

Net operating income grows from $646,886 in Year 1 to $1,038,926 in Year 5 as occupancy stabilizes and the room rate steps up each year. Year 1 does not cover debt service on any structure the market supports; the sponsor's interest reserve or cash must carry the opening year. That is normal for a new hotel and is why the lender should size an interest reserve into the construction loan.

In Year 3 the restructured hotel covers its debt service until occupancy falls to 60.8%, a cushion of 11.9% below the underwritten level. It meets the 1.15x floor down to 64.7%. Both figures sit close to the national average occupancy of 2025, which means the cushion is real but not wide.

The break-even holds rate constant and lets occupancy fall, and it keeps payroll fixed. In practice a hotel facing new competition loses rate before it loses occupancy, because the new hotels discount to fill. Our note on the break-even occupancy trap explains why a lender should read this figure together with the rate sensitivity below, not on its own.

The research supplied the contingency, the franchise cost ratio, the tax rates and the debenture rate. Everything else is a labelled assumption: the land price, the key count, site size, building cost, FF&E, soft costs, occupancy, rate, payroll, the cost ratios, insurance, the city tax placeholder, the reserve and the bank rate. Each assumption names the benchmark that informs it where one exists.

Each condition below closes a gap the research could not fill. Together they convert the research's 18 open items into 12 conditions.

1. STR trend report. A twelve-month trend report for a competitive set of the Hampton, Holiday Inn Express, Comfort Suites, Everhome and Home2, with monthly occupancy, ADR and RevPAR and a day-of-week breakdown. Replace the model's occupancy and rate assumptions with the set's performance and the subject's expected penetration.
2. Pipeline key counts. Key counts from TDLR, the city or the brands for the Courtyard, the Residence Inn and the Sendero dual-brand, plus city permit and planning agenda checks for any further hotel filings.
3. Competitor records. Confirmation of the Hampton, Holiday Inn Express, Comfort Suites and Quality Inn brand pages, which refused an automated read; key counts confirmed from franchise or appraisal district records for the Comfort Suites, where none was confirmed, and for the Best Western, Quality Inn and Days Inn, where sources conflict; and size, brand status and appraisal records for the Super 8, the Bastrop Inn and the Tropicana Motel.
4. Zoning. A zoning verification letter under the 2026 Bastrop Development Code confirming the pad's district, city limits or ETJ status, and whether a hotel is permitted by right; the approval timeline if it is not.
5. Land value. An appraisal of the pad, with comparable sales, replacing the model's per-acre assumption; one assessment of another SH 71 parcel is not a value.
6. Utilities. Will-serve letters for water, sewer, electric and gas, with impact and connection fees.
7. Traffic. The nearest TxDOT station count and year on SH 71 at the pad, from the public count layer.
8. Flood and environmental. A FEMA flood zone determination, a Phase I environmental site assessment and a wildfire exposure review for the insurer.
9. Taxes. The City of Bastrop's adopted 2025 tax rate ordinance, the emergency services district for the pad, and the appraisal district's treatment of the 2025 hotel openings.
10. Insurance. A bound quote covering wind, flood and wildfire, replacing the allowance.
11. Franchise and rates. The chosen brand's franchise disclosure document with fees, area protection and any property improvement requirements; the bank rate and the debenture rate set at pricing; an interest reserve sized for Year 1.
12. Eligibility and program. Citizenship documentation for every direct and indirect owner and guarantor; a projection that meets SBA's transient test; evidence of cash for pre-opening costs and working capital outside the 504 project; the pad's Opportunity Zone status if the sponsor's equity depends on it.

Several gaps are context rather than conditions: the research could not confirm any SBA 504 loan to a Bastrop County borrower in 2024 to 2026 and found no state park visitation series and no construction cost index for the county. A lender with access to SBA's loan-level data can fill the first in an afternoon. The Bastrop RV park case works from the same county records with a different program and a different guest, and the hotel feasibility hub and the Texas market page place this town in the wider state picture, with the Austin metro page covering the region Bastrop County belongs to.