Build a costed, timed capital plan; do not assume a reserve percentage will cover known works. Separate recurring replacements, deferred maintenance, brand-mandated improvements and discretionary repositioning.
HVS’s 2026 development-cost survey is based on actual project budgets and provides broad development context. It is not a substitute for a property-specific renovation estimate, especially where an existing building’s condition and scope drive the work. (hvs.com)
Our recommended capital schedule includes:
| Capital bucket | Items to investigate |
|---|---|
| Building and infrastructure | Roof, envelope, HVAC, plumbing, electrical and life safety |
| Guest product | Rooms, bathrooms, corridors and public areas |
| Operating equipment | Kitchen, laundry, technology and back-of-house systems |
| Compliance and brand requirements | Costed obligations, approvals and deadlines |
| Project delivery | Design, consultants, permits, freight, storage and project management |
| Trading disruption | Room outages, outlet closures, retained staffing and reopening |
| Funding | Interest, contingency, reserve availability and additional equity |
A seller’s statement that a property has been renovated should be reconciled to invoices, completed scope and remaining requirements. HVS’s transaction guidance specifically identifies PIPs and deferred maintenance as issues to surface early. (publications.hvs.com)
Avoid double counting: track the reserve account separately. A transfer into that account and a later payment from it should not both reduce consolidated owner cash as though they were unrelated expenditures.