PROVIDENCE NORTH KINGSTOWN, RHODE ISLAND OFFERING SUMMARY BURLINGTON WILLISTON, VERMONT

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1 PROVIDENCE NORTH KINGSTOWN, RHODE ISLAND OFFERING SUMMARY BURLINGTON WILLISTON, VERMONT

2 BURLINGTON WILLISTON the offering Holliday Fenoglio Fowler, L.P. ( HFF ) is pleased to offer, on an exclusive basis, the leasehold interest in the 104-suite TownePlace Suites Providence North Kingstown and the fee simple interest in the 99-suite TownePlace Suites Burlington Williston (individually the Hotel or Property and together the Hotels, Properties or Portfolio ). Offers will be considered on either a Property or Portfolio basis. North Kingstown, Rhode Island. The TownePlace Suites Providence North Kingstown is located in North Kingstown, Rhode Island, approximately 19 miles south of Downtown Providence and 12 miles south of Green Airport. The Hotel is the only lodging facility allowed within the rapidly developing Quonset Business Park which is home to nearly 200 companies with 10,000 employees, The Port of Davisville (A top ten auto port in North America) and Quonset State Airport. The Quonset Business Park and it s tenants are underway with numerous facility expansion projects and new commercial developments. The Hotel also benefits from its close proximity to Newport, Wickford Village, Narragansett, University of Rhode Island and the Martha s Vineyard Fast Ferry. The LEED Certified Hotel features 104 suites with fully equipped kitchens, a heated indoor pool, a fitness center and additional on-site amenities. Williston, Vermont. The TownePlace Suites Burlington Williston is located at Taft Corners in Williston, Vermont, approximately five miles southeast of Downtown Burlington. The Hotel offers easy access to University of Vermont and other area colleges, University of Vermont Medical Center and Burlington s premier leisure attractions. The Hotel also benefits from competitively superior access to IBM/Global Foundries and other corporate lodging demand generators. The Hotel features 99 recently renovated suites with fully equipped kitchens, a heated indoor pool, an outdoor patio and additional on-site amenities. The TownePlace Suites Providence North Kingstown and the TownePlace Suites Burlington Williston offer investors the opportunity to acquire high-quality, Marriottbranded, extended-stay hotels with strong in-place cash flow and strategic locations in key northeast lodging markets. In 2015, the Hotels combined achieved net operating income of nearly $2.24 million at a 34.7% net operating income margin. The Hotels are offered unencumbered by management and at a discount to replacement costs. 2

3 PROVIDENCE NORTH KINGSTOWN investment highlights Superior Access to Demand Drivers. Providence/North Kingstown. The TownePlace Suites Providence North Kingstown is the only hotel serving companies in the rapidly developing Quonset Business Park in North Kingstown, Rhode Island. The Hotel benefits from its strategic location proximate to local companies within the park including General Dynamics, Electric Boat and Greencore as well as the Martha s Vineyard Fast Ferry and University of Rhode Island. There are no other hotels in close proximity to the Quonset Business Park. Burlington/Williston. The TownePlace Suites Burlington Williston is located at Taft Corners in Williston, Vermont. The Hotel is approximately 5 miles from Downtown Burlington, University of Vermont and University of Vermont Medical Center. The Hotel benefits from its close proximity to corporate demand generators including IBM/Global Foundries, Keurig Green Mountain, Burlington Labs, Burton Snowboards, and TLC Nursing. Quonset Business Park s Rapid Development. The Quonset Business Park, which is home to nearly 200 companies with 10,000 employees, The Port of Davisville and Quonset State Airport, is developing rapidly. General Dynamics Electric Boat opened a $47 million, 123,000 square foot submarine production building in December 2015 and plans to increase its number of employees at the Quonset Business Park from 3,700 to 6,000 in the years ahead. Edesia Nutrition is opening an 82,000 square foot manufacturing and warehousing facility in May Ocean State Job Lot is also evaluating a $50 million, 500,000 square foot expansion of its corporate headquarters. In total, the Quonset Business Park has 300 acres of property available for future commercial development. New Vintage, Recently Renovated Hotels. The TownePlace Suites Providence North Kingstown opened in April 2011 and as a result is the newest hotel in its competitive set. The TownePlace Suites Burlington Williston opened in April 1999 but completed substantial renovation work in 2013 that upgraded the Hotel to the current TownePlace Suites prototype. It is expected that change of ownership property improvement plans for each Hotel will be minimal. 3

4 Leading Brand Affiliation. TownePlace Suites by Marriott is an upper-midscale, extended-stay hotel brand with nearly 270 open locations and 180 pipeline locations. Each TownePlace Suites hotel offers guests extraordinary value: spacious suites with full kitchens and complimentary breakfast. The brand offers investors an efficient cost model and the power of Marriott International s reservations system, Marriott Rewards program and other sales, marketing and operations initiatives. Marriott s select-service and extended-stay hotel brands are amongst the most attractive to the travelling consumer and the lodging investment community. Strong In-Place Cash Flow. Combined, the Hotels have a proven track record for generating substantial operating results. In 2015, the hotels combined achieved an occupancy of 84.4%, an average daily rate of $101.96, a RevPAR of $86.01 and corresponding room revenue of nearly $6.4 million. Combined net operating income was nearly $2.24 million which is a 34.7% margin. The strong in-place cash flow will allow a buyer to secure competitive financing. Approved Hotel Expansion. The TownePlace Suites Providence North Kingstown was originally designed to accommodate a 48 suite expansion subject to a per room rent increase. The Hotel s high occupancy makes this pre-approved expansion option very attractive. Financial Upside from Ground Lease Purchase Option/ Renegotiation. The TownePlace Suites Providence North Kingstown is subject to a ground sublease that includes an Option to Purchase the fee-simple interest in the Hotel in The Quonset Development Corporation has expressed willingness to negotiate reduced rent in exchange for delaying the purchase option an additional 10 years. Unencumbered by Management. The Hotels are being offered unencumbered by management which will allow a potential investor complete flexibility as it relates to ongoing management strategy. BURLINGTON WILLISTON 4

5 towneplace suites providence north kingstown property overview Address: Acreage: 55 Gate Road North Kingstown, Rhode Island, Acres Guestroom Mix: - 77 Studio King Suites - 3 Studio Queen Suites -10 Studio Queen/Queen Suites - 6 One Bedroom Suites - 8 Two Bedroom Suites Total Suites Open Date: 2011 Amenities: - All-Suite Hotel - Fully Equipped Kitchens - Complimentary High-Speed Internet Access - Complimentary Breakfast - Sundry/Convenience Store - Fitness Center - Heated Indoor Salt Water Pool - Business Center - BBQ/Picnic Area - Guest Laundry - Complimentary Shuttle Service Ownership Structure: Leasehold; Termination Date: March 31, 2046; Extensions: Five consecutive 5-year extensions; Option To Purchase in

6 p r ov idence/nor t h k i n g s t ow n l o c a t i o n & dem and m ap PROVIDENCE C OV ENTRY 19 M ILES TO P R OV IDEN CE WARREN T.F. GREEN AIRPORT WARWICK FALL RIVER PROVIDENCE RIVER MT HOPE BAY 95 PORT OF DAVISVILLE NARRAGANSETT BAY PROVIDENCE/NORTH KINGSOWN Quonset Business Park NORTH KING STOWN 1 NARAGANSETT (12.8 MILES) NEWPORT 6

7 towneplace suites burlington williston property overview Address: 66 Zephyr Road, Taft Corners Williston, Vermont, Acreage: 2.45 Acres Guestroom Mix: - 73 Studio Suites - 14 One Bedroom Suites - 12 Two Bedroom Suites - 99 Total Suites Open Date: 1999 Renovation Year: 2013 Complete Guestroom and Public Space Renovation Amenities: - All-Suite Hotel - Fully Equipped Kitchens - Complimentary High-Speed Internet Access - Complimentary Breakfast - Sundry/Convenience Store - Fitness Center - Heated Indoor Pool - Business Center - Outdoor Patio - Guest Laundry Ownership Structure: Fee Simple 7

8 2 b u r l in gton/willisto n l o c a t i o n & d e m a n d m ap MONTREAL (95 MILES) LAKE CHAMPLAIN BURLINGTON INTERNATIONAL 5 MIL AIRPORT ES TO DOWN TOWN BURL INGTO 2 N 189 BURLINGTON WILLISTON 7 89 NEW YORK CITY (300 MILES) BOSTON (215 MILES) 8

9 PROVIDENCE NORTH KINGSTOWN offering format & process The Hotels are being offered on an as-is, where-is basis without any representations or warranties. Potential Purchasers are encouraged to thoroughly evaluate the merits of this investment opportunity and proactively review the Hotels prior to submitting a proposal. Offers will be considered for each Hotel individually or as a Portfolio. Following the distribution of Offering Materials, HFF is available to assist Potential Purchasers in the review of the information contained herein. All inquiries and requests, including arrangements for property and market tours, should be addressed to the HFF transaction team noted below. Owner and HFF reserve the right to alter the marketing process at their sole discretion. DUE DILIGENCE Upon execution of the confidentiality agreement, investors will be given access to an online archival bank of information containing property tax bills, third party reports, and other property information. The purpose of this information is to facilitate due diligence and depth of underwriting. TRANSACTION COSTS Each Prospective Purchaser shall be responsible for any and all costs and expenses (including legal fees) associated with their inspection and due diligence efforts pertaining to the Properties. TERM SHEET A Potential Purchaser will be selected by Owner and HFF, in their sole and absolute discretion, on the basis of a complement of factors, including, but not limited to the Potential Purchaser s: Financial strength; Level of discretion to invest funds; Ability to close the transaction in a timely fashion; Experience in closing similar transactions; Reputation in the industry; and Due diligence completed prior to their purchase offer. HFF will notify Potential Purchasers as to the call for offers date as well as provide any specific terms and conditions of the transactions with which the Owner is prepared to proceed. On the to-be-determined call for offers date, HFF asks that all offers be submitted with, at a minimum, the key business terms noted below: Purchase price; Amount and timing of deposits; Length of due diligence and closing periods; Allocation of closing costs between buyer and seller; Description of the availability and source of both equity and debt funds for the acquisition; Explanation of due diligence completed to date; Explanation of acquisition approval process by pertinent individuals, boards, or committees if selected as a buyer; and Background information on the purchasing entity. 9

10 2016 HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit or follow HFF on Twitter at HFF has been engaged by the owner of the properties to market them for sale. Information concerning the properties described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. If you have any questions or require additional information, please contact any of the HFF professionals below: FINANCING CONTACT JENNIFER KELLER Director jkeller@hfflp.com DENNY MEIKLEHAM Managing Director dmeikleham@hfflp.com ALAN SUZUKI Director asuzuki@hfflp.com MATT ENRIGHT Senior Analyst menright@hfflp.com BROKER OF RECORD JAIME FINK Senior Managing Director VT License # BROKER OF RECORD JAMES KOURY Senior Managing Director RI License # ONE POST OFFICE SQUARE, SUITE 3500 BOSTON, MASSACHUSETTS P F