The Mandate
A first-time resort sponsor with prior short-term rental portfolio operating experience in the Northwoods engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 7(a) financing request for a project located in Vilas County, Wisconsin. Total project capitalization fell within the $3M-$5M band. The capital provider, a specialty SBA lender, required documentation consistent with current program review standards. The analytical question put to the team: Could Northwoods leisure demand support a 21-cabin micro-resort at the proposed nightly rate with 58% trailing-twelve occupancy.
Engagement Scope
- Primary market area defined as a national origin-market drive-time
- Comparable supply set of 8 properties
- Demand model framework: leisure room-night demand projection with seasonality overlay
- Financial projection horizon: 7 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a national origin-market drive-time from the subject site, calibrated to the demand catchment behavior typical of resort assets in Wisconsin. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 8 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a leisure room-night demand projection with seasonality overlay approach over a 7 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 2.2 across the projection window, with a stabilized capture rate of 3.2%.
Exhibit 1: Comparable Supply Set, Wisconsin PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 7 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Chicago and Milwaukee drive-time inflows produced a 184,000 annual leisure room-night pool inside the Northwoods PMA.
- Comparable cabin-tier properties cleared $260 to $360 ADR at 62% to 70% peak-season occupancy.
- Subject reached 59% trailing-twelve occupancy by month 20 of the ramp curve.
- Stabilized 7(a) DSCR of 1.34x cleared the lender's 1.25x review threshold.
Deliverable
The delivered report ran 122 pages with 26 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the specialty SBA lender. The corresponding SBA 7(a) review framework guided exhibit selection and supporting documentation.