Cosmopolitan Development Group
OVERVIEW & vision >> 138 EAST 50TH ST/ 151 EAST 49TH ST Site Area: 11,910 sf ( 1,860 sf + 10,050 sf) FAR: 15 FAR / 12 FAR Total Zoned Area: 149,845 sf Total Gross Area: 184,055 sf # of keys: 353 keys / 90 cabins Operator: Virgin Hotel Hotel Suites: Cabin Space: Amenities and Commercial: Back of house: Outdoor Space: Public Thorough Way:
116,442 net square feet 3,154 net square feet 20,630 net square feet 22,810 net square feet 3,312 gross square feet 2,152 gross square feet
NEW YORK
One
CHAMBERS
300
SUITES
53
PODS/CABINS
90
Chambers include King of 2 double beds. Suites are sweet and Pods/Cabins are unique experience offer at Virgin Hotel.
Proposed Acquisition Price: $ 74 Million / $ 212,245 per key / $ 500 psf Total Development Cost: $ 205 Million / $ 563,853 per key / $ 1,131 psf Total Equity: $130 Million Total Debt: $ 74 Million GP Equity Contribution: $ 13 Million LP Equity Contribution: $ 117 Million Expected GP IRR: 35.78% Expected LP IRR: 20.12% Stablized ROC: 9.1% Exit Cap Rate: 6.0%
Virgin Hotel
COSMOPOLITAN DEVELOPMENT GROUP
location >> manhattan, ny
Virgin Hotel
flag saturation >> 138 EAST 50TH ST/ 151 EAST 49TH ST, Manhattan, ny
STARWOOD HYATT WYNHDAM HILTON IHG MARRIOTT INDE/OTHER
Virgin Hotel
SITe >> 138 EAST 50TH ST/ 151 EAST 49TH ST, Manhattan, ny
STARWOOD HYATT WYNHDAM HILTON IHG
THE LEXINGTON HOTEL
MARRIOTT
SAN CARLOS
INDE/OTHER W HOTEL
HYATT LEX 48 INTERCONTINENTAL BARCLAYS GOTHAM HOTEL WYDHAM HOTEL
Virgin Hotel
COMP SET >> understanding the competitive landscape Hotel
W Hotel
Hyatt 48 Lex
Wyndham Midtown
Gotham Hotel
Location Class Scale Brand Rate Room Count
541 Lexington Ave 4 Star Upscale Boutique Starwood $356 693
571 Lexington Ave 4 Star Upscale Boutique Hyatt $369 116
205 E 45th St. 4 Star Upscale Boutique Wyndham $359 203
Conference Room Meeting Room Bar
Yes Yes Lexicon Lounge
Restaurant
Yes Yes Oasis Bar, Whiskey Blue Heartbeat Restaurant
Style
Hip, Trendy
Lexington Brass Bar & Grill Modern Elegant
Modern Elegant
Other Amenities
24 hr Gym, Spa
24 hr Gym, Yoga
Gym, Health Club
Avg Room Rate: $ 370 Avg Room Count: 388 Rooms
Virgin Hotel
16 E 46th St. 4 Star Upscale Gotham $389 66
InterContinental Barclays 111 E 48th St. 4 Star Upscale InterContinental $429 771
The Lexington New York City 511 Lexington Ave 4 Star Upscale Marriott $330 725
San Carlos Hotel 150 E 50th St. 4 Star Upscale Boutique San Carlos $359 147
Yes Yes No
No Yes No
Yes Yes Barclays Bar
No Yes The Mixing Room
No Yes No
Atrium Restaurant
Tenpenny Restaurant Barclay Bar and Grill, Italian Neo-Federal Modern Chic Contemporary Classic Access to NYSC 24 hr Gym, Spa
S. Dynasty, Raffles Bistro Contemporary, Art and Music 24 hr Gym
Restaurant Classic 24 hr Gym
Redefining your hotel experience
Redefining your hotel ex perience.
Cosmopolitan Development Group
CONCEPT >> Creating a Unique and Seamless Experience
TYPICAL BUSINESS HOTEL
Virgin Hotel
trend >> Millenials and Businesswomen Current age of the workforce 3%
1%
16 to 24 years 14%
frequent business travellers
18-30 years old
31-45
25 to 34 years
15%
35 to 44 years 22%
65 to 74 year 22%
> 75 years
Millenials in workforce
2014
35% Virgin Hotel
4.7
times a year
3.6
times a year
4.2
2013 1970
1%
millenials + businesswomen = 1/3 biz spending
times a year
Female business travel in US
2020
47%
years old
years old
45 to 54 years 55 to 64 years
23%
46-65
today in the united states
51%
business travel by gender
travelling >> Corporate x Trendy crossover
20
30 Analysts, Associates
Attracted to Perks, Bars, Technology-led, Adventurous, Self-Service, Fashionable, Shuttle Service, Loyalty Program $80,000 - $100,000
Virgin Hotel
40 Associates, VPs
Bars, Convenience, Zagat Rated Restaurants, Loyalty program, Sophisticated, Valet Parking, Spa
$90,000 - $200,000
50 VPs, Presidents
Room Service, Michelin Star Restaurant, Car Service, Family, Valet Parking, Meeting Space
$200,000 +
60+ CEOs, CFOs, Founders Room Service, Traditional Services, Lobby, Michelin Star Restaurant, Car Service, Board Room
$300,000+
VIRGIN CLUBHOUSE >> relax, work, play & dine RELAX in harmony - 24 hr Virgin Active and Well-being Center - Hair & Beauty Salon - Men’s Grooming & Barber
Virgin Hotel
WORK with ease - Meeting Areas - Board Rooms - Shared Workspace
VIRGIN CLUBHOUSE >> relax, work, play & dine PLAY in style - Billiards - Screening Room - Rooftop Lounge and Lobby Bar
Virgin Hotel
DINE in flavor - Two High-end Destination Restaurants - Grab & Go Fresh Fast Dining - Local Coffee Shop
VIRGIN Chamber >> refresh & recharge chambers & Suites - Elegent and Contemporary - Allergen free linens - Great views
Virgin Hotel
virgin upperclass cabin >> unique experience cabin /pods experience - Virgin Active’s Sleep Pods are designed to lower blood pressure and ease back tension - Power naps to recharge - Perfect for mid-day rest for both locals and tourists - Experience Virgin Upperclass Cabin on the ground - Enhance marketing and branding of the hotel - Optimize the use of the smaller plot - Ambient sound and atmosphere
other amenities & service - UBER car service - On-Site Valet Parking - Urban Check-in Service for VIRGIN flights - Free WIFI - VIRGIN Flying Club Loyalty Program - 24 hr Sephora Vending Machine - outdoor venue space
Virgin Hotel
Redefining your hotel experience
Redefining your skyline.
Cosmopolitan Development Group Virgin Hotel
architecture >> understanding zoning
Lot Size
ABOVE 710’ : FOR EVERY 10’ THE DEPTH OF SET BACK INCREASE BY 1 FOOT SKY EXPOSURE CURVE AS PER C6-4.5 ZONING
FAR
Buildable Sq Ft
Lot 28
1,859
12
22,311
Lot 45
9,749
12
116,982
Lot 45
703
15
10,552
Total
12,311
149,845
710’ - 0”
SKY EXPOSURE PLANE AS PER C6-6 ZONING *
LOT 45 PORTIONS OF THROUGH LOTS WITH MULTIPLE REAR LOT LINES
90’ BASE
20’-0” REAR LOT LINE SET BACK REQUIREMENT NA
RR
OW
ST
RE
ET
NA
90’ BASE
RR
OW
ST
RE
ET
360’-0”
LOT 28 R6 - 4.5
R6 - 6
85’ BASE
*
LOBBY BELOW STREET AT CELLAR LEVEL * As per the 25-foot rule in the zoning text, the split zoning lot will allow the bulk regulations of the larger lot to be applied to the entire site. In this case, the bulk regulations of C6-4.5 will be applied, which has very specific requirements.
Virgin Hotel
architecture >> making a statement The Building Mass: - Iconic and crystal-like silhouette - Chiseled to enhance natural light and view - Expose all rooms to greater sunlight - Carving allows sunlight penetrate to lower floors - Maximize height The Facade: - Glass and traslucent mesh - Folds and mimics the building silhouette - Display of human interactions - Allows guest to look out while providing privacy - Details and articulation of mesh reflect context - Provides a more intimate human scale Ground Level: - Activate the development - Thorough-way to connect 49th and 50th street - Courtyard, restaurant and hotel entrance
Virgin Hotel
architecture >> creating pedestrian traffic
LEX
ING TO N
TH
49
AVE N
UE
EET
R ST
D IR TH E
NU
E AV T
E RE
TH
Virgin Hotel
50
ST
PEDESTRIAN ACCESS
architecture >> programming
LEX
ING
TON
AVE N
UE
TH
49
EET
STR
HOTEL ROOMS CABINS BARBERSHOP / SALON
D IR
TH
FOOD AND BEVERAGE
E AV
LOBBY
E
NU OUTDOOR
ET
TH
Virgin Hotel
50
E TR
BACK OF HOUSE / MECH.
S
HOTEL UNITS ABOVE POD HOTEL AND AMENITIES
architecture >> enhancing vIEWS OWN MIDT
VER
T RI S A EE
TH
LEX
ING TO N
TH
49
AVE N
UE
EET
R ST
D IR TH E
NU
E AV T
E RE
TH
Virgin Hotel
50
ST
CARVING OF MASS TO CREATE SIGHT LINES
architecture >> creating dynamic facades
01 FOLDING PANES OF GLASS
Virgin Hotel
02 RANGE OF COLORS AND LIGHTS
03 UNDULATING SURFACE
04 TRANSLUCENT SKIN REVEALS ROOMS
FACADE STUDIES + PRECEDENTS
architecture >> maximizing value
355’
$$$
ROOFTOP 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9
90’
8 8 7 6 5 4 3
15’
-20’
Virgin Hotel
2
$
architecture >> programming
355’
ROOFTOP
HOTEL ROOMS
34 33
BARBERSHOP / SALON
32 31
FOOD AND BEVERAGE
30 29
LOBBY
28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9
90’
8 8 7 6 5 4 3
15’
-20’
Virgin Hotel
2
OUTDOOR BACK OF HOUSE
architecture >> floorplans
50th street
Lexington Avenue
BARBERSHOP / SALON FOOD AND BEVERAGE
3rd avenue
LOBBY
GROUND FLOOR
HOTEL UNITS ABOVE POD HOTEL AND AMENITIES
Virgin Hotel
OUTDOOR BACK OF HOUSE
2ND FLOOR
0
10
25
50
architecture >> floor plans
FOOD AND BEVERAGE LOBBY/COMMON AREAS HOTEL ROOMS
FOOD AND BEVERAGE LOBBY/COMMON AREAS OFFICE OFFICE SPACE SPACE
3RD - 5TH 3RD - 5TH FLOORS FLOORS
6TH6TH - 8TH - 8THFLOORS FLOORS
0
35TH FLOOR
Virgin Hotel
HOTEL ROOMS
10
25
50
ROOF
architecture >> floorplans
FOOD AND BEVERAGE LOBBY/COMMON AREAS FOOD AND FOOD BEVERAGE AND BEVERAGE HOTEL ROOMS LOBBY/COMMON LOBBY/COMMON AREAS AREAS HOTEL ROOMS HOTEL ROOMS
FOOD AND BEVERAGE LOBBY/COMMON AREAS OFFICE SPACE
9TH - 12TH FLOORS 3RD - 5TH FLOORS
9TH - 12TH 9TH - FLOORS 12TH FLOORS
13TH FLOORS 6TH - 8TH FLOORS
16TH FLOOR 16TH FLOOR
0
35TH FLOOR
Virgin Hotel
HOTEL ROOMS
0 10 10 0 2510
25 25 50
50 50
ROOF
architecture >> floorplans
FOOD AND BEVERAGE FOOD AND BEVERAGE FOOD AND BEVERAGE LOBBY/COMMON AREAS LOBBY/COMMON AREAS LOBBY/COMMON AREAS HOTEL ROOMS HOTEL ROOMS
HOTEL ROOMS
FOOD AND BEVERAGE LOBBY/COMMON AREAS OFFICE SPACE
35TH 35TH FLOOR FLOOR 3RDFLOORS] -35TH 5TH FLOORS
ROOF ROOFTOP 6THROOF - 8TH FLOORS
0
10
25
0 50 10
35TH FLOOR
Virgin Hotel
HOTEL ROOMS
0
25 10
25
50
50
ROOF
DEVELOPMENT SCHEDULE >> realistic approach
DEVELOPMENT PERIOD 24 MONTHS
2014
2016
2015
2017
2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CONTRACTS
DESIGN AND PERMITTING DEMO PERMIT
DEMO FOUNDATIONS
SUPERSTRUCTURE AND ENCOSURE INSPECTION
INSPECTION
FIT OUT
STABILIZATION 70% STABILIZED 90% SALE
YEAR 0 YEAR 1
Virgin Hotel
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
2021202
Redefining your hotel experience
Redefining your investment.
Cosmopolitan Development Group Virgin Hotel
financial analysis >> SUMMARY Costs Total Development Costs of $205 Million, or $563,853 / key Equity Seeking $117 Million from LPs GP will contribute the balance equity of $13 Million DebT Construction loan of $74.9 Million, an LTC of 65% Key Assumptions Starting ADR of $350, annual growth rate of 3% Occupancy ramps up from 70% to 90% when stabilized Exit cap rate of 6.0% Holding Period: 5 Years Returns Levered IRR: 22.2%, equity multiple of 2.1x, profit of $276 Million Unlevered IRR: 13.3%, equity multiple of 1.8x, profit of $376 Million Stabilized ROC: 9.1%
Virgin Hotel
financial analysis >> summary SOURCES
USES
CONSTRUCTION LOAN
$ 74,896,53
36.54%
ACQUISITION COST
$ 74,922,500
36.53%
EQUITY
$ 130,064,100
63.46%
CONSTRUCTION COST
$ 115,225,437
56.22%
- GP
$ 13,006,410
10%
INTEREST
$ 14,812,697
7.23%
- LP
$ 117,057,690
90%
TOTAL
$ 204,960,634
TOTAL
$ 204,960,634
PER KEY
PSF
TOTAL HARDCOST
$ 59,335,516
$ 163,234
$ 327
TOTAL SOFTCOST
$ 75,949,461
$ 45,705
$ 91
TOTAL FF&E
$ 22,926,488
$ 45,675 - $80,485
$95 - $ 167
TOTAL ALL IN
$ 109,738,512
$ 317,368
$ 605
LAND COST
$ 74,922,500
$ 212,245
$ 500
CONTINGENCY COST
$ 5,486,926
$ 15,562
$ 30
FINANCING COST
$ 14,812,697
$ 42,014
$ 81
TOTAL DEVELOPMENT COST
$ 204,960,634
$ 564,282
$ 1,130
Virgin Hotel
financial analysis >> development cost breakdown Direct Hard Costs SiteWork & Demolition Excavation & Foundation Superstructure Exterior Closure Roofing Interior Construction Special Equipment Landscaping & Patio Vertical Transport Plumbing SiteWork & Demolition Fire Protection Electrical Total Direct Hard Costs
$ Cost/ GSF Total Cost $ 4.99 $ 4,533,859 $ 6.18 $ 1,120,770 $ 49.71 $ 9,015,125 $ 52.67 $ 9,551,934 $ 2.20 $ 398,980 $ 37.26 $ 6,757,263 $ 25.53 $ 4,629,977 $ 6.00 $ 1,088,126 $ 9.68 $ 1,755,510 $ 13.72 $ 2,488,182 $ 25.95 $ 4,706,145 $ 4.48 $ 812,467 $ 17.96 $ 3,257,124 $ 256.33 $ 50,115,461
Indirect Trade Costs General Conditions Fee - General Contractor General Liability Bond Contingency Subtotal Contractor Costs
$ Cost/ GSF $ 22.53 $ 8.19 $ 5.62 $ 5.73 $ 8.77 $ 50.84
Total Cost $ 4,085,914 $ 1,485,292 $ 1,019,211 $ 1,039,160 $ 1,590,478 $ 9,220,055
Total Hard Costs
$
$
Soft Costs Architect Consultants General/Misc Soft Costs Real Estate taxes Marketing Expenses Legal Developer Fee Soft Cost Contingency Total Soft Costs Total Hard and Soft Costs
Virgin Hotel
%Cost 6% 3% 2% 2.5% 2.0% 5% 3% 28%
307.17
59,335,516
$ Cost/ GSF $ 18.43 $ 9.22 $ 6.14 $ 13.82 $ 7.68 $ 6.14 $ 15.36 $ 9.22 $ 86.01
Total Cost $ 3,560,131 $ 1,780,065 $ 1,186,710 $ 2,670,098 $ 1,483,388 $ 1,186,710 $ 2,966,776 $ 1,780,065 $ 16,613,945
$
$
393.18
75,949,461
FF&E Low High Guestroom Guestroom only $ 11,605 $ 21,227 per key Bathroom $ 27,088 $ 14,465 per key guestroom corridors $ 1,417 $ 3,013 per key Public Space reception area $ 99 $ 173 psf public restrooms $ 111 $ 183 psf Food and Beverage Facilities restaurant $ 104 $ 192 psf Bar and Lounge $ 145 $ 257 psf Kitchen $ 41 $ 67 psf Function Space Meeting Rooms $ 65 $ 116 psf Board Rooms $ 109 $ 200 psf Guest Amenities Fitness Room $ 123 $ 225 psf Common Additives New RFID Key System $ 611 $ 968 per key Tub to Stall Shower Conversion $ 3,005 $ 5,755 per key Elevator Cab Finishes $ 12,732 $ 20,575 per cab Elevator Modernization Traction, per Cab $ 155,849 $ 210,383 per cab Electronic Signage Boards Basic System - one Lobby Screen 42" diag $ 15,278 $ 25,260 per screen Additional Lobby / Prefunction screens $ 5,093 $ 8,420 per screen Additional Meeting Room door screen (18" diag) $ 4,945 $ 8,272 per screen PTAC Unit Direct Replacement, NIC finishes Two Pipe Horizontal Fan Coil Unit Direct Replacement $ 3,056 $ 4,125 each Laundry Equipment 75# Washer $ 20,371 $ 31,066 each 125# Dryer $ 30,557 $ 41,252 each Ironer / Folder $ 101,856 $ 116,115 each Porte Cochere - Re-image: Demolish and Replace $ 25,464 $ 78,938 allowance Guestroom ADA Modifications Bathtub room $ 17,600 $ 28,163 per key Roll-in Shower room $ 20,116 $ 35,395 per key Dumpster enclosure Power operated bi-parting Entrance doors $ 21,000 $ 35,649 per pair Fireplace & other $ 6,750 $ 30,557 allowance Landscaping $ 40,742 $ 76,392 allowance ESTIMATE Per Key PSF
Low
High
$ $ $
4,218,418 2,783,320 515,080
$ $ $
7,716,015 5,258,028 1,095,226
$ $
483,813 159,840
$ $
845,451 263,520
$ $ $
312,000 232,000 123,000
$ $ $
576,000 411,200 201,000
$ $
390,000 109,000
$ $
696,000 200,000
$
184,500
$
337,500
$ $ $
222,099 1,092,318 50,928
$ $ $
351,858 2,091,943 82,300
$
623,396
$
841,532
$ $ $
15,278 10,186 9,890
$ $ $
25,260 16,840 16,544
$
3,056
$
4,125
$ $ $ $
101,855 152,785 509,280 25,464
$ $ $ $
155,330 206,260 580,575 78,938
$ $
1,919,280 2,193,650
$ $
3,071,175 3,859,825
$ 21,000 $ 6,750 $ 40,742 $ 16,508,925 $ 45,416.00 $ 91.03
$ 35,649 $ 30,557 $ 76,392 $ 29,125,051 $ 80,124.00 $ 160.60
financial analysis >> detailed assumptions Hotel Assumptions General Assumptions Number of rooms 363.5 ADR Growth 6% Inflation 3% ADR $ 350.00 Initial occupancy 70% Stabilized Occupancy 90% RevPAR $ 315.00 Revenue and Expense Composition Revenue Room 90.0% Food & Beverage 5.0% Telephone 0.0% Other Operated Departments 5.0% Parking 0.0% Total 100% Additional Operating Expense Undistrobuted Opex 30.0% Operating Fee 5.0% Other Fixed Charges 5.0% FF&E Reserve 2.0% Additonal Expense/Revenue Ratio 42.0%
Virgin Hotel
rooms annually annually First 18 months
of Total Revenue of Total Revenue of Total Revenue of Total Revenue of Total Revenue of Total Revenue of Total Revenue of Total Revenue of Total Revenue
Expense 25.0% of Revenue 65.0% of Revenue 200.0% of Revenue 30.0% of Revenue 40.0% of Revenue
financial analysis >> PRO-FORMA
Year Construc2on Costs HOTEL Room F&B Other Total Revenue Departmental Expenses Departmental Income Non Departmental Expenses Net Opera2ng Income FF&E Reserve
0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Residual Value Debt Service ConstrucNon Loan Paydown Permanent Loan Permanent Loan Paydown TOTAL CASH FLOW
$0.00 $0.00
$0.00 $0.00
Virgin Hotel
$0.00
1 2 $57,612,718.63 $48,010,598.86
3 $0.00
4 $0.00
5 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$25,564,062.93 $1,420,225.72 $1,420,225.72 $28,404,514.37 $5,822,925.45 $22,581,588.92 $11,361,805.75 $11,219,783.17 $568,090.29
$36,019,867.11 $2,001,103.73 $2,001,103.73 $40,022,074.57 $8,204,525.29 $31,817,549.28 $16,008,829.83 $15,808,719.45 $800,441.49
$47,484,213.98 $2,638,011.89 $2,638,011.89 $52,760,237.76 $10,815,848.74 $41,944,389.02 $21,104,095.10 $20,840,293.91 $1,055,204.76
$0.00 $0.00
$0.00 $0.00
$0.00 -‐$15,416,403.12
$368,178,525.83 -‐$15,416,403.12 -‐$232,390,235.80
$0.00 $0.00 ($57,612,718.6) ($57,612,718.6)
$0.00 ($568,090.3)
$0.00 $158,593,765.5
-‐$232,390,235.80 $118,066,264.5
financial analysis >> RETURN ANALYSIS RETURNS TO EQUITY - 5 YEAR ANALYSIS Total Amount Invested ($130,064,100) Total Return $276,193,009 Net Cash Flow $146,128,909 IRR Equity Multiple
22.20% 2.1x
CAPITALIZATION
EQUITY INVESTMENT
Split up to Pref. Return of
Virgin Hotel
20.12% 2.0x
35.78% 3.6x Amount ($) $74,896,534 $130,064,100 $204,960,634
Pro-Rata Share (%) 90% 10% 100%
LP Investors General partner Total Equity Investment
Investor GP Equity Total Equity GP Promote Total Cash Flow
General partner ($13,006,410) $46,660,597 $33,654,187
% of Total 36.5% 63.5% 100%
Amount Leveraged Equity Needed Total
CASH FLOW SPLITS
Investor ($117,057,690) $229,532,412 $112,474,721
Equity ($) Invested $117,057,690 $13,006,410 $130,064,100
Hurdle I 90% 10% 100% 0% 100%
Hurdle II 80% 10% 90% 10% 100%
Hurdle III 70% 10% 80% 20% 100%
10%
15%
20.00%
Thereafter 90% 10% 100% 0% 100%
NEW YORK
One
CHAMBERS
300
SUITES
53
PODS/CABINS
90
Chambers include King of 2 double beds. Suites are sweet and Pods/Cabins are unique experience offer at Virgin Hotel.
COSMOPOLITAN DEVELOPMENT GROUP
Cosmopolitan Development Group Virgin Hotel