THE STRAND AT HEADLANDS

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1 THE STRAND AT HEADLANDS Luxury Hotel and Commercial Development Opportunity ORANGE COUNTY, CA (DANA POINT) Pacific Coast Highway Street of the Green Lantern STRANDOCHOTEL.COM

2 Executive Summary JLL has been exclusively retained to market The Strand at Headlands 2.8-acre luxury hotel development site and 1.5-acre commercial development site (the Property, Properties, Site, or Sites ). Located halfway between Los Angeles and San Diego, these unique oceanfront Properties overlook Dana Point Harbor and sit on Orange County s famed Gold Coast, home to the neighboring Ritz Carlton Laguna Niguel, the St. Regis Monarch Beach Resort, the Marriott at Laguna Cliffs Resort & Spa, and the Montage Resort in Laguna Beach. The offering represents a rare opportunity to acquire two fully entitled development sites in the extremely high barrier to entry market of Dana Point, on the Southern California coastline. View from East Offering Summary The following summarizes the key Property highlights: PERSPECT z Fully entitled project for a 90-key, 110,750 square foot luxury hotel, and a 35,000 square foot commercial center Headland z Free and clear of any management or hotel branding obligations z Premier location overlooking the Pacific Ocean and Dana Point Harbor (hotel site), and fronting Pacific Coast Highway (commercial site) in Orange County, California z Master Planned as part of the highly successful Strand at Headlands residential development project, includes 68.5 acres of adjacent parks and open space, with three miles of coastal access trails Main Hotel Entrance z Close proximity to the 2,500 slip, private yacht Dana Point Harbor, the Ocean Institute, luxury shopping, and world-class dining options z The luxury hotel site has been mapped for condos allowing the developer to sell fractional units to create a private residence program. MAIN HOTEL ENTR Headlands Hotel/Resort Project, Dana 2

3 Upper Level View Key Investment Highlights UPPER LEVEL PERSPECTIVE FROM EAST Premier Oceanfront Location Situated in the heart of one of California s top leisure destinations, the Properties are highly accessible via highways and five airports in the Greater Los Angeles and Orange County metropolitan areas, including the John Wayne Airport with international services. Adjacent to the Pacific Ocean, the Properties are a premier venue for family getaways, couple retreats, group meetings, corporate outings, and weddings. Headlands Hotel/Resort Project, Dana Point Fully Entitled Property The 2.8-acre luxury hotel development pad has been graded and entitled for a 90-key resort and spa totaling 110,750 square feet (additional square footage may be obtained by building subterranean facilities). The 1.5-acre commercial pad has been graded and is entitled for 35,000 square feet of commercial uses, including a 40-bed hostel facility. All the development entitlements, as required by the California Coastal Commission and the City of Dana Point, have been approved and are vested under the Headlands Development and Conservation Plan ( HDCP ) and the Headlands Development Agreement. All of the requisite local, state, and federal environmental approvals have been obtained and permitted. Only the site development plan and architecture need to be reviewed and approved by the City of Dana Point. 3

4 Adjacent to Premiere Orange County Coastal Resorts The Properties are neighbors to Orange Country s finest luxury hotels and resorts. The prestigious St. Regis Monarch Beach Resort, the Ritz Carlton Laguna Niguel, and the Marriott Laguna Cliff Resort & Spa are within 2 miles. The Montage Resort at Laguna Beach and The Resort at Pelican Hill sit 5 miles and 13 miles north, respectively. The luxury hotel development Site offers the opportunity to join this extremely elite list of Orange County coastal resorts. Management and Brand Availability The luxury hotel Site is being offered free-and-clear of any brand and management or franchise encumbrances. The developer has the option to secure a recognized, full service brand, a boutique brand, or operate the Property as an independently owned facility. Scenic Drive Excellent Lodging Market Performance Orange County consistently ranks as one of the top lodging markets in the United States. The robust Orange County market demonstrated exceptional performance illustrated by RevPAR CAGRs of 9% from 2010 through Given the high barriersto-entry throughout the County and a plethora of prominent leisure demand generators, RevPAR growth should continue to exceed inflationary levels as the hotel market matures to full build-out. World-Class Leisure Destination Benefiting from ten miles of pristine beaches, mild climate, worldclass retail, and premier dining, Dana Point is a high barrier-toentry, robust Orange County submarket that boasts some of the wealthiest zip codes in the nation, and is easily accessible from the massive population base of the Greater Los Angeles and Greater San Diego metropolitan areas. With millions of annual visitors, the City of Dana Point is home to prominent events including the Festival of Whales, the Tall Ships Festival, 4th of July Fireworks, and the Doheny Blues Festival. Luxury Hotel Development Pad Outstanding Orange County Location Orange County s 3,000,000+ population makes it the third most populated county in California, the sixth most populous in the United States, and more populous than 21 U.S. States. And yet Orange County remains renowned for its luxurious suburban lifestyle and spectacular coastline. Ideally situated between Los Angeles and San Diego, Orange County is home to many of California s most highly desirable communities including Newport Beach, Irvine, Anaheim, Laguna Beach, Laguna Niguel, San Juan Capistrano, Dana Point, and Mission Viejo. Supply Constrained Coastal Residential Market Orange County s near perfect climate, abundant parks and beaches, and thriving economy make it one of the most highly desired residential markets in the United States. Existing homes and new residential developments are quickly absorbed. Developable land is difficult to obtain and even tougher to entitle. The Orange County coastal submarket experiences the highest level of demand and contains the most limited supply. The Strand luxury hotel and commercial Sites are virtually the only undeveloped Sites on the coast that are fully permitted and graded. 4

5 Vibrant Local Economy Orange County s wealthy population, great schools, and business-friendly environment, coupled with strict barriers-to-entry, offer a rich quality of life for both its residents and business community. Orange County serves as headquarters to seven Fortune 500 companies, including many notable high tech firms such as Broadcom, Western Digital, and Ingram Micro, as well as numerous corporations that reflect the vibrant Orange County lifestyle. Action sports industry leaders such as Billabong, Hurley, Oakley, O Neill, Quiksilver, and Volcom all call Orange County home. Zoning The luxury hotel development Site is located in Planning Area 9 in the HDCP. The commercial Site is identified as Planning Area 4 in the HDCP. The designated zoning district for both Planning Areas is Visitor/ Recreation Commercial ( V/RC ). The offering represents two distinct development sites described below with discretionary approvals and permits as detailed in the HDCP and the Headlands Development Agreement. Acreage SF APN Entitlements Luxury Hotel Parcel , , , key condo/hotel, 110,750 SF Commercial Parcel , , , ,000 SF of commercial, 40-bed hostel hotel Dana Point 5

6 Exclusive Advisors For more information please contact: Brendan McArthur Senior Vice President License # John Strauss International Director License # Jeff Adkison Managing Director jeff.adkison@am.jll.com License # This Confidential Offering Memorandum (this Memorandum ) is being delivered subject to the terms of the Confidentiality Agreement (the Confidentiality Agreement ) signed by you and constitutes part of the Evaluation Material (as defined in the Confidentiality Agreement). It is being given to you for the sole purpose of evaluating the possible investment in or acquisition of the fee simple interest in the Strand at Headlands luxury hotel and commercial development sites and is not to be used for any other purpose or made available to any other party without the prior written consent of Seller ( Seller ), or its exclusive broker, Jones Lang LaSalle s Hotels & Hospitality Group and Development & Asset Strategy Group (JLL). This Memorandum was prepared by JLL based on information supplied by Seller and JLL. It contains select information about the Property and the real estate market but does not contain all the information necessary to evaluate the acquisition of the Property. The financial projections contained herein (or in any other Evaluation Material, including materials on a Web-based due diligence site) are for general reference only. They are based on assumptions relating to the overall economy and local competition, among other factors. Accordingly, actual results may vary materially from such projections. Various documents have been summarized herein to facilitate your review; these summaries are not intended to be a comprehensive statement of the terms or a legal analysis of such documents. Neither JLL nor Seller guarantees the accuracy or completeness of the information contained in this Memorandum or any other Evaluation Material. Because of the foregoing and since the Property is being offered on an As Is, Where Is basis, a prospective investor or other party authorized by the prospective investor to use such material solely to facilitate the prospective purchaser s investigation, must make its independent investigations, projections and conclusions regarding the acquisition of the Property without reliance on this Memorandum or any other Evaluation Material. Although additional Evaluation Material, which may include engineering, environmental or other reports, may be provided to qualified parties as the marketing period proceeds, prospective purchasers should seek advice from their own attorneys, accountants, engineers and environmental experts. Seller expressly reserves the right, at its sole discretion, to reject any offer to purchase the Property or to terminate any negotiations with any party at any time with or without written notice. Seller shall have no legal commitment or obligations to any prospective purchaser unless and until a written sale agreement has been fully executed, delivered and approved by Seller and any conditions to Seller s obligations thereunder have been satisfied or waived. Seller has retained JLL as its exclusive broker and will be responsible for any commission due to JLL in connection with a transaction of the Property pursuant to a separate agreement. JLL is not authorized to make any representation or agreement on behalf of Seller. Each prospective purchaser will be responsible for any claims for commissions by any other broker in connection with a sale of the Property if such claims arise from acts of such prospective purchaser or its broker. This Memorandum is the property of Seller and JLL and may be used only by parties approved by Seller or JLL. No portion of this Memorandum may be copied or otherwise reproduced or disclosed to anyone except as permitted under the Confidentiality Agreement.