N Central Expy Dual-Asset Analysis

H134 Hilton Garden Inn | H141 Hampton Inn & Suites | 10350 & 10370 N Central Expy, Dallas TX

Off-Market from Ryan Patterson

As of: March 2026

Combined Ask: $30,000,000

Combined Keys: 234

Prepared by: Warren (CFO)

H134 — HGI (110 keys)

$15.0M

$136,364 per key | 2020 build

H141 — Hampton (124 keys)

$15.0M

$120,968 per key | 2017 build

Combined 2025 NOI

$2.40M

HGI $1.219M + HIS $1.184M

Combined Cap Rate at Ask

8.01%

HGI 8.13% | HIS 7.90%

1. Three-Year P&L Summary — Side by Side

Line Item	H134 2023	H134 2024	H134 2025	H141 2023	H141 2024	H141 2025
Operating Statistics
Keys Available	110	110	110	124	124	124
Rooms Available (365d)	40,143	40,255	40,150	45,260	45,384	45,260
Rooms Sold	28,846	30,641	30,848	31,752	31,715	32,156
Occupancy %	71.9%	76.1%	76.8%	70.2%	69.9%	71.1%
ADR	$123.67	$116.85	$116.17	$115.86	$110.56	$109.31
RevPAR	$88.86	$88.94	$89.25	$81.28	$77.26	$77.67
Revenue
Room Revenue	$3,575,443	$3,568,101	$3,587,266	$3,678,679	$3,519,056	$3,519,871
F&B Revenue	$217,402	$246,919	$260,287	$0	$0	$0
Other / Rentals	$154,221	$187,508	$220,463	$95,586	$125,647	$115,597
Total Revenue	$3,947,066	$4,002,528	$4,068,016	$3,774,264	$3,644,704	$3,635,468
YoY Growth	base	+1.4%	+1.6%	base	-3.4%	-0.3%
Departmental Expenses
Room Dept Expenses	$1,150,474	$1,163,622	$1,179,676	$1,251,373	$1,221,538	$1,238,712
F&B Dept Expenses	$302,229	$346,259	$335,437	$549	$1,464	$284
Other Dept Expenses	$45,569	$41,570	$46,367	$16,893	$21,235	$23,950
Total Dept Expenses	$1,498,271	$1,551,451	$1,561,481	$1,268,814	$1,244,238	$1,262,946
Undistributed Operating Expenses
Admin & General	$287,990	$228,497	$253,357	$202,010	$243,821	$239,751
IT & Telecom	$40,307	$44,877	$61,390	$49,365	$63,439	$58,356
Sales & Marketing	$325,131	$382,307	$366,534	$383,753	$360,155	$336,423
Engineering / Maintenance	$149,020	$137,177	$178,380	$137,215	$123,838	$158,334
Utilities	$122,763	$129,259	$138,763	$113,521	$132,190	$138,583
Total Undistributed OpEx	$925,211	$922,116	$998,423	$885,864	$923,443	$931,447
Gross Operating Profit	$1,523,584	$1,528,961	$1,508,112	$1,619,586	$1,477,023	$1,441,075
Non-Operating Expenses
Property & Other Taxes	$102,518	$203,239	$219,562	$187,211	$188,077	$186,375
Insurance	$65,597	$68,568	$69,186	$65,146	$69,176	$70,214
Non-Op Income (Ins.)	($30,138)	$0	$0	$0	$0	$0
NOI / EBITDA	$1,385,607	$1,257,154	$1,219,364	$1,367,229	$1,219,769	$1,184,486
NOI Margin	35.1%	31.4%	30.0%	36.2%	33.5%	32.6%

2. Margin Analysis & Trend

Metric	H134 2023	H134 2024	H134 2025	Trend
NOI Margin	35.1%	31.4%	30.0%	-5.1 pts
GOP Margin	38.6%	38.2%	37.1%	-1.5 pts
Dept Expenses / Rev	37.9%	38.8%	38.4%	+0.5 pts
Undist OpEx / Rev	23.4%	23.0%	24.5%	+1.1 pts
Room Revenue / Total Rev	90.6%	89.1%	88.2%	-2.4 pts
Prop Tax / Rev	2.6%	5.1%	5.4%	+2.8 pts
S&M / Rev	8.2%	9.6%	9.0%	+0.8 pts
Royalty Fees / Room Rev	5.5%	5.5%	5.4%	stable
Room Payroll / Room Rev	17.6%	16.6%	17.4%	-0.2 pts

Metric	H141 2023	H141 2024	H141 2025	Trend
NOI Margin	36.2%	33.5%	32.6%	-3.6 pts
GOP Margin	42.9%	40.5%	39.6%	-3.3 pts
Dept Expenses / Rev	33.6%	34.1%	34.7%	+1.1 pts
Undist OpEx / Rev	23.5%	25.3%	25.6%	+2.1 pts
Room Revenue / Total Rev	97.5%	96.6%	96.8%	stable
Prop Tax / Rev	5.0%	5.2%	5.1%	stable
S&M / Rev	10.2%	9.9%	9.3%	-0.9 pts
Royalty Fees / Room Rev	6.0%	5.7%	6.0%	stable
Room Payroll / Room Rev	16.9%	16.9%	16.4%	-0.5 pts

Both properties: NOI declining despite flat-to-rising RevPAR

H134 NOI has fallen $166K (-12.0%) since 2023 while revenue grew $121K (+3.1%). The margin bleed is entirely expense-driven: undistributed OpEx up $73K, property tax up $117K (likely a revaluation catch-up from the 2020 build), F&B losses widening. H141 NOI is down $183K (-13.3%) with revenue also declining $139K. The Hampton has the worse revenue story (ADR eroding 5.6% in 2 years); the HGI has the worse cost story.

H134 property tax spike is the biggest single P&L event

Property taxes went from $102,518 in 2023 to $219,562 in 2025, a 114% increase in two years. This is almost certainly a Dallas County reappraisal catching up to the 2020 build year. It is likely not yet fully stabilized. Tax protest should be filed immediately post-acquisition.

3. Key Expense Line Item Benchmarking

Expense	H134 2025	% of Rev	H141 2025	% of Rev	Select-Svc Hilton Norm	Assessment
Royalty (Franchise) Fees	$194,339	5.4%	$211,254	6.0%	5.0-6.0%	In-line
Room Payroll (wages only)	$623,605	17.4%	$577,888	16.4%	15-18%	In-line
Total Room Dept Expenses	$1,179,676	32.9%	$1,238,712	35.2%	30-35%	H141 elevated
Sales & Marketing	$366,534	9.0%	$336,423	9.3%	7-9%	Above norm
Engineering / Maintenance	$178,380	4.4%	$158,334	4.4%	3-5%	In-line
Utilities	$138,763	3.4%	$138,583	3.8%	3-5%	In-line
Property & Other Taxes	$219,562	5.4%	$186,375	5.1%	3-5%	H134 elevated (reappraisal)
Insurance	$69,186	1.7%	$70,214	1.9%	1.5-2.0%	In-line
Admin & General	$253,357	6.2%	$239,751	6.6%	5-7%	In-line
F&B Dept (net)	($75,150) loss	-1.8%	n/a	n/a	break-even typical	F&B losing money
Total Expenses	$2,848,652	70.0%	$2,450,982	67.4%	58-62% for 40% NOI	Both above target
Select-service Hilton norm ranges sourced from FDD Item 19, REIT operator disclosures, and THM institutional benchmarks. The 40% NOI target requires total expenses at or below ~60% of revenue.

4. Texas Comptroller Tax Receipt Cross-Reference

Year	H134 Reported Rev	H134 Tax Receipts	H134 Variance	H141 Reported Rev	H141 Tax Receipts	H141 Variance
2023	$3,947,066	$3,672,358	-$274,708 (-7.0%)	$3,774,264	$3,771,069	-$3,195 (-0.1%)
2024	$4,002,528	$3,634,161	-$368,367 (-9.2%)	$3,644,704	$3,429,189	-$215,515 (-5.9%)
2025	$4,068,016	$3,744,903	-$323,113 (-7.9%)	$3,635,468	$3,475,931	-$159,537 (-4.4%)

Tax receipts vs. P&L: Expected gap, not a red flag

Texas hotel occupancy tax is levied on taxable receipts (room revenue net of exempt transactions like long-stay exemptions and certain comp rooms). The 7-9% gap on H134 is slightly elevated but explainable: the HGI reports F&B and rental income in total revenue that is not subject to hotel occupancy tax. H141's gap is tighter because it has no F&B line. Neither property shows signs of underreporting. The H134 taxpayer entity is MEADOW TWO HOSPITALITY, LP (no. 32063963873); H141 is MEADOW HOSPITALITY, LP (no. 32052523621) — same ownership family, different entities.

5. NOI Waterfall 2023–2025

H134 HGI NOI Trend

Bridge Item	$ Impact
2023 NOI (base)	$1,385,607
Revenue growth (+$55K)	+$55,000
Room dept cost creep	-$29,000
Undist. OpEx increase	-$73,000
F&B dept loss widening	-$17,000
Property tax reappraisal	-$117,000
Insurance increase	-$4,000
2025 NOI	$1,219,364
Decline from peak	-$166,243 (-12.0%)

H141 Hampton NOI Trend

Bridge Item	$ Impact
2023 NOI (base)	$1,367,229
Room revenue decline (-$159K)	-$159,000
Other rev growth (+$20K)	+$20,000
Room dept cost reduction	+$13,000
Undist. OpEx increase	-$46,000
Property tax (stable)	-$1,000
Insurance increase	-$5,000
2025 NOI	$1,184,486
Decline from peak	-$182,743 (-13.4%)

6. THM 40% NOI Target: What Needs to Change

Framework

THM's target is 40% NOI margin. At current revenue levels, that requires: H134 at $1,627K NOI (gap: +$408K vs. 2025 actual); H141 at $1,454K NOI (gap: +$270K vs. 2025 actual).

H134 Gap to 40% at $4.07M Revenue

Lever	Target	2025 Actual	Potential Savings
F&B: Eliminate losses or outsource	$0 loss	($75,150)	+$75,000
Property tax protest	$160K	$219,562	+$60,000
S&M optimization (to 8%)	$325K	$366,534	+$41,000
A&G tightening (to 5.5%)	$224K	$253,357	+$29,000
IT & Telecom (to 1.2%)	$49K	$61,390	+$12,000
Procurement / vendor savings	est.	various	+$20,000
Total Identified Savings			+$237,000
Residual gap (revenue lift needed)			+$171,000
Revenue lift: +4.3% ADR or +2-3pp occupancy closes the gap. HGI RGI of 156 suggests this market should support it.

H141 Gap to 40% at $3.64M Revenue

Lever	Target	2025 Actual	Potential Savings
Room dept cost tightening	$1,165K	$1,238,712	+$73,000
S&M optimization (to 8%)	$291K	$336,423	+$45,000
A&G tightening (to 5.5%)	$200K	$239,751	+$40,000
IT & Telecom (to 1.2%)	$44K	$58,356	+$14,000
Property tax protest	$165K	$186,375	+$21,000
Procurement / vendor savings	est.	various	+$15,000
Total Identified Savings			+$208,000
Residual gap (revenue lift needed)			+$62,000
Revenue lift: +1.7% ADR or ~1pp occupancy closes the gap. H141 has RGI 168 — rate recovery is the primary lever. ADR is down 5.6% since 2023.

7. Revenue Story: H134 vs H141

Property	2023 Room Rev	2025 Room Rev	$ Change	ADR 2023	ADR 2025	ADR Change	Occ 2023	Occ 2025	Occ Change
H134 HGI	$3,575,443	$3,587,266	+$11,823	$123.67	$116.17	-$7.50 (-6.1%)	71.9%	76.8%	+4.9pp
H141 Hampton	$3,678,679	$3,519,871	-$158,808	$115.86	$109.31	-$6.55 (-5.7%)	70.2%	71.1%	+0.9pp

Rate compression is the story at both properties

HGI recovered occupancy (+4.9pp) but did so at the cost of rate, resulting in flat room revenue. The Hampton has both ADR compression and occupancy flatness, producing a genuine revenue decline. Both markets suggest rate-driven displacement (Qualified Discount and OTA-heavy mix). H141's 2024 Qualified Discount room revenue was $1,003,333 out of $3,519,056 total room rev (28.5%) — a heavily discounted mix that needs to be addressed under THM management.

H134 F&B: small revenue story, costs too high

F&B revenue grew from $217K to $260K (2023-2025, +20%), but expenses remain above revenue. The net loss in 2025 is $75K. Under THM operation, this department either needs to be tightened aggressively or the food service model restructured (breakfast-only, limited service). Any outsourcing or restructuring scenario saves $40-80K.

8. Acquisition Pricing, Cap Rates & Sensitivity

Scenario	H134 NOI	H134 Cap (@ $15M)	H141 NOI	H141 Cap (@ $15M)	Combined NOI	Combined Cap (@ $30M)
Reported 2025 (as-is)	$1,219,364	8.13%	$1,184,486	7.90%	$2,403,850	8.01%
Stress (-10% Rev, flat costs)	$807,000	5.38%	$822,000	5.48%	$1,629,000	5.43%
Year 1 stabilized (THM, -5% costs)	$1,362,000	9.08%	$1,307,000	8.71%	$2,669,000	8.90%
THM 40% Target (Year 2-3)	$1,627,000	10.85%	$1,454,000	9.69%	$3,081,000	10.27%
Dallas select-service transaction market: 7.5-9.0% going-in cap rates as of 2025. Both properties are at the low end of that range as-is — leaving room to negotiate or argue for discount based on declining NOI trajectory.

Both deals work at ask if THM can close the margin gap

At $30M combined and $2.4M current NOI, these trade at 8.0% as-is — acceptable for Hilton-branded assets in Dallas. The compelling case is the margin expansion story: THM's operating model should generate $600-700K in combined NOI improvement, pushing Year 2-3 cap rates to 10%+ on cost. The downside is real: at 60% occupancy (stress case), both properties barely cover debt service on a typical 60% LTV acquisition.

9. Key Financial Risks

Risk 1: H134 property tax trajectory

Property taxes went from $102K to $220K in 2 years. Dallas CAD reappraisals happen on a 3-year cycle. If the 2020 build has not yet received its full assessed value increase, another reappraisal round could push this to $250K+. A tax protest is essential at closing, and it should be treated as a Year 1 operating priority. Estimated tax exposure without a protest: $230-260K by 2027.

Risk 2: H141 ADR erosion

The Hampton's ADR has declined 5.7% in two years while the market compset has been flat-to-growing (RGI 168 suggests this hotel is punching above weight on rate index, but the absolute ADR story is declining). This suggests either a mix shift toward OTA/discount channels or a rate integrity problem. Due diligence should request the channel mix report and channel cost breakdown for the past 3 years.

Risk 3: No PIP disclosed on H141 (2017 build)

H141 was built in 2017. At 8-9 years, Hampton typically enters a soft goods cycle (carpet, bedding, case goods). No PIP amount is on file. A 2017 Hilton brand property likely faces $8-15K/key in soft goods PIP within 12-24 months of acquisition, or $992K-$1.86M on 124 keys. This is a direct deduction from the purchase price in negotiations.

Risk 4: H134 F&B is a loss center

The HGI food and beverage department lost $75K in 2025 and $99K in 2024. These are not operational anomalies. The HGI brand standard requires food service, but the current model is structurally unprofitable. Any buyer inherits this obligation. Negotiating a food service waiver or limited-service modification with Hilton should be a condition of the LOI.

Opportunity: Combined acquisition leverage

Ryan Patterson is presenting these as a package. The same ownership entity (Meadow Two Hospitality / Meadow Hospitality) controls both. Negotiating them together gives leverage: both are declining in NOI, neither seller can claim peak valuation, and a combined $30M LOI has fewer competing buyers than individual $15M deals. Push for combined pricing at $27-28M or seller financing on the H141 PIP allowance.

10. Executive Summary: Side-by-Side Decision View

Factor	H134 Hilton Garden Inn	H141 Hampton Inn & Suites
Ask / Price per Key	$15M / $136,364	$15M / $120,968
2025 NOI / Cap Rate	$1.219M / 8.13%	$1.184M / 7.90%
NOI Trend	Declining (-12% since 2023)	Declining (-13% since 2023)
Revenue Trend	Growing (+3.1%)	Declining (-3.7%)
Primary NOI Bleed	Property tax + F&B losses	ADR erosion + OpEx creep
THM 40% Target Gap	+$408K needed (+33.5%)	+$270K needed (+22.8%)
Identifiable Cost Saves	$237K (taxes + F&B + opex)	$208K (labor + opex + taxes)
PIP Risk	$1.65M known (2020 build)	Unknown (2017 build, no disclosure)
Tax Receipt Reconciliation	7-9% variance (explainable)	0-6% variance (clean)
Property Tax Risk	High (reappraisal trajectory)	Stable ($186-188K)
FIT Score (current)	83 / B / HIGH conviction	78 / B / HIGH conviction
Preferred Deal Structure	Acceptable at ask with PIP credit	Needs price reduction or PIP allowance

Data Sources: P&L files pulled directly from Google Drive via Convex backend (all 6 XLSX files confirmed parsed). Texas Comptroller tax receipts sourced from SIFT database (H134: taxpayer 32063963873 / MEADOW TWO HOSPITALITY LP; H141: taxpayer 32052523621 / MEADOW HOSPITALITY LP). FIT scores from Mission Control as of last analysis run. Benchmark ranges: Hilton FDD Item 19, REIT operator disclosures, THM institutional norms. Prepared March 2026.