Use the market evidence to identify assumptions requiring proof, then build the decision around property-level cash flow. The following is the desk’s recommended workflow—not a claim that the public data can replace underwriting.
Before a first bid
- [ ] Confirm exactly what is being purchased: real estate interest, operating business, equipment, contracts and any adjacent uses.
- [ ] Identify which price observations are completed consideration, broker estimates, deed allocations or asking prices.
- [ ] Obtain monthly operating results, room inventory and achieved ADR—not advertised booking rates.
- [ ] Reconcile the proposed competitive set to the property’s location, size, service model and affiliation.
- [ ] Establish the renovation and transition scope before comparing price per key.
During exclusivity
- [ ] Normalize management and brand charges under one common operating case.
- [ ] Obtain current insurance quotations and property-specific tax advice rather than carrying forward seller expenses automatically.
- [ ] Separate recurring replacement reserves from immediate renovation costs; avoid counting the same expenditure twice.
- [ ] Model quiet-month liquidity, renovation downtime and debt service monthly.
- [ ] Require evidence for forecast rate premiums, margin improvements and affiliation benefits.
- [ ] Reconcile the consideration structure and all-in cash requirement to the purchase documents.
What should the investment committee receive?
A useful boutique hotel acquisition decision brief should contain:
| Output | Decision it supports |
|---|---|
| Dated transaction ledger with evidence grades | Whether market-price claims are credible |
| Competitive-set audit | Whether forecast ADR and occupancy have relevant support |
| Revenue-to-owner-cash bridge | Whether stronger sales translate into distributable cash |
| Capital and transition funding schedule | Whether the equity requirement is complete |
| Monthly downside liquidity model | Whether the property can withstand weak trading or delayed reopening |
| Conditional bid ceiling and unresolved diligence | Whether to proceed, renegotiate or stop |
For this desk, owner cash means the residual after operating expenses, contractual charges, owner-level property costs, debt service and the capital expenditure included in the model. State the treatment of each item explicitly; do not assume that seller EBITDA, reported NOI and distributable cash are interchangeable.