Obtain buyer-specific insurance terms and a jurisdiction-specific tax estimate before fixing the bid ceiling. The seller’s historical expense is evidence of what the seller paid—not a quote for the buyer.
Gallagher’s spring 2026 hospitality update describes a softer property-insurance environment than the preceding hard market. That is useful context, but it does not establish the premium, deductible, exclusions or capacity available for a particular hotel. (ajg.com)
Our recommended insurance request covers:
- Insured values and replacement-cost basis.
- Named-peril deductibles and sublimits.
- Business-interruption assumptions and indemnity period.
- Renovation or vacancy restrictions.
- Claims history and required remediation.
- Lender requirements and binding conditions.
For taxes, obtain a written analysis of the proposed transaction and ownership structure. California’s Board of Equalization explains that a qualifying change in ownership generally triggers reassessment to current fair market value, subject to applicable exclusions; other jurisdictions require their own analysis. (boe.ca.gov)
Hypothetical illustration: an additional $100,000 of recurring annual owner expense reduces annual cash by $100,000 before other effects. Capitalized at an assumed 8%, it also changes a simplified income indication by $1.25 million.
Do not use that illustration as a tax valuation method. Use it to prioritize obtaining reliable expense evidence.