What it costs to build a hotel in Colorado in 2026
A 100-room select-service hotel runs $18 million to $26 million, about $216,108 per key all-in. On Colorado's own rents, vacancy and lending terms the typical case does not pencil. Every figure below has its source; checked October 28, 2026.
Cost to build, typical case
| Land | $1,800,000 |
| Hard cost | $12,690,000 |
| Soft cost | $2,456,300 |
| FF&E and equipment | $1,832,100 |
| Contingency | $951,750 |
| Interest reserve | $930,607 |
| Developer fee | $950,000 |
| Total, a 100-room select-service hotel | $21,610,757 |
| Range, low to high case | $17,914,261 to $26,376,338 |
HVS 2026 development cost survey. Rule of thumb: A select-service hotel costs about $200k a key; at 60% loan-to-cost and a 10% debt yield it needs roughly $12k of NOI per key, which is $95 to $105 of RevPAR.
Would it get financed
- Loan a lender would size$7,202,280, limited by LTV
- Rate and amortization8.00%, 25 years
- Equity required$14,408,476 (67% of cost)
- Net operating income, stabilized$960,304
- Yield on cost against target4.4% against 9.5%
- Debt service coverage1.44x
Verdict on statewide numbers: Hotel of this size does not pencil at typical cost and rent; the gap is 5.1% of cost in yield.
The Colorado market
People and jobs
6,012,561 residents in 2025, growing 0.77% a year since 2020. 2,395,638 private jobs in Q1 2026, -0.4% in a year.
Census Population Estimates (Vintage 2025); BLS QCEW private employment.
Rents and vacancy
Median gross rent $1,693 a month; a new build leases at roughly a premium to that. Rental vacancy 5.1%. 783,361 renter households with a median income of $61,610.
US Census ACS 5-year 2023, tables B25064, DP04, B25003, B25119.
Permits in 2025
17,406 single-family homes, 702 units in 2 to 4 unit buildings, and 15,646 apartment units permitted statewide.
US Census Building Permits Survey, state annual file.
Competing supply
1,489 hotels, motels, and other lodging in Colorado, 25.6 per 100,000 residents.
US Census County Business Patterns 2023.
How hotel projects get financed
Who lends. Banks and debt funds for construction; CMBS and life companies for stabilized hotels; SBA 7(a) for limited-service hotels up to $5M.
Typical stack. Ground-up: 30 to 40% equity, 60 to 70% senior construction loan at about SOFR + 425; debt funds go to 75% loan to cost at a higher rate.
SBA. Hotels are the largest SBA 7(a) industry by dollars: 764 loans and $2.0B in FY2025, average $2.7M, lifetime charge-off about 1.8%. The 7(a) cap is $5M and 504 debentures $5.5M, so a $30M project is bank and debt-fund territory.
What a lender will ask for
- HVS-style feasibility study: market area, supply and demand, comp set with STR data, 10-year P&L, development budget
- Franchise approval or brand commitment letter
- Experienced operator or management agreement
- Equity in first (30 to 40%)
- Debt yield at stabilization above the floor
Hotel lenders require a feasibility study from an independent firm ($15k to $50k; HVS or CBRE $25k to $80k). This screen tells you whether to commission one.
Assumptions
| Input | Low | Typical | High | Source |
|---|---|---|---|---|
| Average daily rate | $87 | $123 | $163 | STR 2025 midscale/economy ADR $87; Houston 2026 forecast $123.82; Austin 2026 forecast $163 (2026) |
| Stabilized occupancy | 58% | 62% | 66% | CoStar national 62.3% (2025), 63.1% forecast (2026); Texas 58 to 65% (2026) |
| Operating expense share | 62% | 66% | 70% | Net operating income margin after franchise, management, FF&E reserve and fixed charges: limited service about 34%, select 30%, full 22%; CBRE Trends 2025 and HVS franchise fee guide (2025) · estimate |
| Lease-up or ramp | 24 mo | 30 mo | 36 mo | HVS convention: year one about 80% of stabilized occupancy, year two 92%, stabilized year three (2026) · estimate |
| Exit cap rate | 8% | 8% | 9% | USRC Mid-Year 2026: full service 8.0%, select 7.5 to 8.0%, limited 8.7% (2026) |
| Permanent loan to value | 55% | 60% | 65% | Hotel CMBS Q2 2026: LTV high-50s to mid-60s (2026) |
| Permanent rate | 8% | 8% | 9% | Stabilized hotel fixed-rate debt Q2 2026, all-in (2026) |
| Debt yield floor | 9% | 10% | 11% | Debt yield floors: 9 to 10% limited service, 10 to 11% full service (2026) |
| Construction loan to cost | 55% | 62% | 70% | HVS 2026 survey commentary: lenders requiring larger equity (2026) · estimate |
| Debt service coverage floor | 1.2 | 1.25 | 1.35 | Proprise multifamily underwriting primer (2026) |
Questions
- How much does it cost to build a hotel in Colorado?
- A 100-room select-service hotel runs $18 million to $26 million all-in in 2026, about $216,108 per key in the typical case: land $1,800,000, hard cost $12,690,000, soft cost $2,456,300, contingency $951,750, interest reserve $930,607, developer fee $950,000.
- How much of it will a lender finance?
- About $7,202,280 (33% of cost), limited by LTV, at 8.00% over 25 years. The sponsor brings $14,408,476 of equity. Ground-up: 30 to 40% equity, 60 to 70% senior construction loan at about SOFR + 425; debt funds go to 75% loan to cost at a higher rate.
- Does a hotel pencil in Colorado right now?
- On statewide numbers the typical case does not pencil: yield on cost 4.4% against a target of 9.5% (exit cap 8.0% plus a development spread). Your city, site and rents change the answer; the $299 Capital Projects screen runs it for your address.
This screen is an informational estimate built from published 2025–2026 benchmarks and public datasets for the county you named. It is not an appraisal, a feasibility study, a market study, an offer or commitment of financing, or investment, legal, tax, construction or financial advice. "Stabilized value" and similar figures are formula outputs (net operating income divided by a benchmark capitalization rate), not opinions of market value. Neur LLC is not a licensed appraiser, broker, lender or engineer. Lenders, the SBA and HUD require independent third-party studies and reports before committing capital; obtain them before you buy land, sign a contract or borrow. Figures are estimates with ranges and will differ from actual bids, rents and loan terms. Use of this screen is subject to neur.co/terms.