823 FIFTH AVE S | MINNEAPOLIS, MN O F F E R I N G M E M O R A N D U M
FINANCING
LINDGREN Managing Director
TSOURMAS Associate Director 312.845.1889
MATALON Analyst 312.845.3083 miles.matalon@berkadia.com
DEPASQUALE Minnesota Broker of Record License #40414059 ANDREW COLEMAN Senior Managing Director 240.204.5132
MAURICIO RODRIGUEZ Managing Director 240.204.5133 mauricio.rodriguez@berkadia.com CHICAGO 125 South Wacker Drive Suite 400 Chicago, IL 60606 DC METRO 4445 Willard Ave Suite 1200 Chevy Chase, MD 20815
INVESTMENT SALES
RYAN
312.888.5438 ryan.lindgren@berkadia.com MELISSA
melissa.tsourmas@berkadia.com MILES
RALPH
andrew.coleman@berkadia.com
4 Executive Summary 10 Property Overview 22 Market Overview 36 Competitive Set Overview 42 Financial Overview
Executive Summary
The Offering
Berkadia’s Hotels & Hospitality Group is pleased to offer, on an exclusive basis, the opportunity to acquire the fee-simple interest in the Autograph Collection Elliot Park Hotel (the “Elliot Park Hotel,” “Hotel” or “Property”). Opened in September 2018, the 168-key Hotel is part of Kraus Anderson’s (KA’s) broader mixed-use development, which includes 100,000 SF of office space (home to KA’s headquarters), 307 high-end apartment units, Finnegans House (microbrewery and event venue), and a two-level underground parking garage.
With best-in-class product and significant performance runway to stabilization following the recent construction of the Hotel, there is a unique opportunity for a buyer to capitalize on a newly built asset in a rapidly recovering MSA.
6 EXECUTIVE SUMMARY
Kessler Collection Management, LLC (Unencumbered) FRANCHISE Marriott International | Autograph Collection (Term through September 20, 2043) MEETING SPACE 3,005 SF FOOD & BEVERAGE Tavola Italian Kitchen + Bar AMENITIES Fitness Center, Business Center, Complimentary Wi-Fi PARKING Valet ($48 daily) INTEREST Fee Simple LABOR Non-union YEAR BUILT 2018 KEYS 168 823 Fifth Ave S | Minneapolis, MN 55404 7
MANAGEMENT
Investment Highlights
Recently Built Asset with Premium Amenities Recently
Ability to Capitalize on Ramp to Stabilization
The newly constructed Elliot Park Hotel opened in September 2018 and remains in like-new condition given its pandemicrelated closures and low occupancy experienced since reopening.
The Hotel has yet to receive enough runway to fully stabilize due to its opening less than two years before the onset of COVID-19. As the Property has started to begin its recovery, marked by the trailing city-wide recovery, new ownership stands to benefit from all upside cash flow potential through stabilization.
Kraus Anderson has redeveloped its downtown headquarters block into a mixed-use, live-work-play development, consisting of the company’s headquarters, a 17-story high-end apartment building, Finnegans House, and an underground parking garage. The Hotel’s integral location within the KA Block allows it to capitalize on the built-in demand generators within the development.
EXECUTIVE SUMMARY
Built Asset with Premium Amenities
8 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
1 3 2
KRAUSANDERSON HQ (100K SF)
HQ APARTMENTS (307 Units)
FINNEGANS HOUSE
The Hotel boasts an A+ location within Elliot Park – one of Minneapolis’ oldest neighborhoods that has been revitalized through recent development projects, A+ Location Within
Continued Capital Investment Positioning Minneapolis with a Strong Long Term Growth Trajectory
The state of Minnesota is home to 16 Fortune 500 companies, six of which are situated in the city of Minneapolis. Both public and private capital have continued to make long term bets on the city, seeing an influx of redevelopment projects over the past few years, referenced as the Big Build. This push consists of $2 billion in projects, notably the opening of the new U.S. Bank Stadium and Commons Park, the new stadium neighborhood of Downtown East, and a significant renovation to Target Center.
7
Offered Fully Unencumbered with Fee Simple Interest
The Hotel is being offered unencumbered of management and debt, along with being a nonunion operation and fee simple, providing true flexibility and optionality to a new investor.
8
Attractive Basis to Recent Trades and Discount to Replacement Cost
The Elliot Park Hotel offering represents a rare opportunity to acquire a recently delivered, full-service, premium-branded Hotel, at a substantial discount to replacement cost as well as at a discount to recent trades in Minneapolis.
Historic
Elliot Park Neighborhood One of Only 43 (out of 134 total, 32%) New-Build Autograph Collections in the US 6 4
Minneapolis Convention Center
Property Overview
Property Overview
The 168-key Elliot Park Hotel is situated within Kraus-Anderson’s mixed-use full block development and opened its doors in September 2018.
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Guests can enjoy the Hotel’s premium guestroom product, featuring 13 suites, on-site restaurant Tavola Italian Kitchen & Bar, fitness center, over 3,000 square feet of meeting space, valet parking, and complimentary Wi-Fi. The Property is conveniently located within walking distance of the top leisure attractions in the Minneapolis CBD, along with being in close proximity to the six Fortune 1000 company headquarters downtown.
13
FINNEGANS HOUSE KRAUSANDERSON HQ (100K SF) MANAGEMENT Kessler Collection Management, LLC (Unencumbered) FRANCHISE Marriott International | Autograph Collection (Term through September 20, 2043) MEETING SPACE 3,005 SF FOOD & BEVERAGE Tavola Italian Kitchen + Bar AMENITIES Fitness Center, Business Center, Complimentary Wi-Fi PARKING Valet ($48 daily) INTEREST Fee Simple LABOR Non-union YEAR BUILT 2018 KEYS 168 823 Fifth Ave S | Minneapolis, MN 55404
PROPERTY OVERVIEW
FINNEGANS HOUSE
HQ APARTMENTS (307 Units)
15
Guestrooms
The Hotel’s 168 guestrooms, inclusive of 13 suites, offer guests Scandinavian-inspired design, a large walk-in shower with separate bath, Keurig coffee maker, and complimentary Wi-Fi. Guestrooms range from 320 to 971 square feet across the Hotel’s four room types.
16 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS PROPERTY OVERVIEW
TOTAL ROOMS UNIT MIX BREAKDOWN 137 Kings 18 Queen / Queens 12 Suites 1 Penthouse Suite 17
168
Food & Beverage
Tavola Italian Kitchen & Bar is Elliot Park Hotel’s on-site restaurant, serving traditional Italian cuisine in an upscale urban setting. Located off the lobby, Tavola is open daily for breakfast, lunch, and dinner.
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Meeting Space
Elliot Park Hotel offers 3,005 square feet of meeting space across three rooms and can accommodate up to 288 guests in its largest space. Each room is outfitted with high-speed Wi-Fi, state-of-the-art audio-visual equipment, and video-conferencing capability.
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AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
AUTOGRAPH COLLECTION ELLIOT PARK HOTEL
Space Breakdown
Outside of the Hotel’s meeting space, the neighboring microbrewery, Finnegan’s House, features additional event space, with a maximum capacity of 400 people in its largest offering. Although the Hotel does not operate the meeting space, Elliot Park Hotel benefits from encouraging its rental as the Hotel can capture the corresponding room blocks.
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Meeting Room Dimensions (LxWxH) Area (SF) Theater Schoolroom Conference U-Shape Reception Banquet Chestnut Studio 45.1x49.3x10.5 2,223 288 140 76 - 200 192 Ember Meeting Room 26.5x13x10 345 - - 16 20 -Blaze Boardroom 26.5x16.5x10 437 46 23 22 - 50 31
Market Overview
MARKET OVERVIEW
Corporate Overview
The Minneapolis-St. Paul region features a strong, multi-faceted economy and is considered one of the nation’s most economically robust regions, thanks to its strong base of 16 Fortune 500 headquarters and vast concentration of financial services, manufacturing, consumer goods, and inventive research and development companies. Further strengthened by a highly skilled and diverse workforce, the ‘Twin Cities’ are an ideal location for business operations of all types and sizes.
+155,000
FINANCIAL SERVICES JOBS
+318,000 BUSINESS SERVICES JOBS
Source: Fortune 500, 2022 (*As of March 31, 2022)
State Rank Name Fortune 500 Rank Revenues $M* 1 UnitedHealth Group 5 $287,597 2 Target 32 $106,005 3 Best Buy 68 $51,761 4 CHS 95 $38,448 5 3M 102 $35,355 6 U.S. Bancorp 150 $23,714 7 C.H. Robinson Worldwide 154 $23,102 8 General Mills 201 $18,127 9 Land O'Lakes 232 $15,916 10 Ameriprise Financial 277 $13,443 11 Xcel Energy 278 $13,431 12 Ecolab 293 $12,733 13 Hormel Foods 327 $11,386 14 Thrivent Financial for Lutherans 351 $10,313 15 Polaris 419 $8,252 16 Securian Financial Group 464 $7,317
MINNEAPOLIS #2 ‘BEST U.S. CITY FOR NEW GRADS TO START A CAREER' – CNBC (2022) MINNESOTA #5 ‘BEST STATES FOR JOBS’ – WALLETHUB (2022) MINNESOTA #9 ‘TOP STATES FOR BUSINESS’ – CNBC (2022)
Fortune
Companies
500
(Minnesota)
MINNEAPOLIS MSA → HOME TO 35 COMPANIES WITH REVENUES EXCEEDING $1 BILLION
25
Center for Healthcare & Life ResearchSciences
Metro Minneapolis or ‘Medical Alley’ is home to the world’s #1 health technology innovation cluster. With over 750 headquartered healthcare life science companies, the highest concentration of medical device jobs in the nation, and the fifth-lowest operating cost among life science clusters in the nation, the Greater MSP region is the global epicenter of life science innovation and commercialization.
+750 HEALTH AND LIFE SCIENCES FIRMS
$731M INVESTED METRO-WIDE SINCE 2017
Nearly 300,000 JOBS SUPPORTED INDUSTRY-WIDE
MARKET OVERVIEW
“Silicon Valley of Healthcare”
26 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
MINNESOTA RANKS #2 IN THE NATION FOR MEDICAL TECHNOLOGY PATENTS GRANTED (+100,000)
Major Regional Hospitals
BIRTHPLACE OF THE PACEMAKER AND IN-EAR HEARING AID
MINNESOTA HAS THE HIGHEST CONCENTRATION OF MEDICAL TECHNOLOGY WORKERS IN THE NATION
MAYO CLINIC HOSPITAL, ST. MARY’S - ROCHESTER, MN
14% METRO-WIDE GROWTH IN MEDICAL TECHNOLOGY EMPLOYMENT SINCE 2017
#1
HOSPITAL IN THE NATION
(7 Years Straight)
University of Minnesota
Medical Centre
743 Beds
Abbott
Northwestern Hospital
646 Beds
Hennepin County
Medical Centre
473 Beds
Regions Hospital
454 Beds
27 27
Professional Sports Mecca
The Minneapolis metro is the host to six professional sports teams who compete across five sports venues, including the Target Center, Target Field, U.S. Bank Stadium, Allianz Field, and the Xcel Energy Center. The 39,500-seat Target Field is home to Major League Baseball’s (MLB) Minnesota Twins and has established itself as one of the premier sporting venues in the country. The National Football League’s (NFL) Minnesota Vikings play at the recently constructed U.S. Bank Stadium, where more than 72,000 fans come to cheer on the home team.
MARKET OVERVIEW
U.S. BANK STADIUM
ALLIANZ FIELD
TARGET FIELD
TARGET CENTER
EXCEL ENERGY CENTER
Higher Education
The Twin Cities are home to some of the finest colleges and technical institutes in the country, including 36 colleges and universities as well as a variety of technical and community colleges, like Anoka-Ramsey Community College, North Hennepin Community College, and Normandale Community College.
+215,000 STUDENTS METRO-WIDE
• Offers 170 Undergraduate Degree Programs and 200 Graduate and Professional Degree Programs
• 52,380 Students
• Supports nearly 24,000 Jobs Metro-Wide Generating an $8.6B Annual Economic Impact
• $1.15B in Research Funding (2021)
• Offers 52 Degree Programs, 12 Certificate Programs, and over 1,900 Courses
• 41,070 Students
• +1,500 Faculty
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MARKET OVERVIEW
Minneapolis – St. Paul International Airport (MSP) provides daily departures to 27 international destinations and 136 destinations within the U.S. and served 25.2 million passengers in 2021, a nearly 70% YoY increase, indicating a strong recovery from pandemic-impacted travel (record 39.6 million passengers served in 2019). Ranking as the 13th busiest U.S. airport by passenger traffic in 2021 and 17th for aircraft operations, MSP Airport is also a base for hometown carrier Sun Country Airlines and is Delta Air Lines’ second-largest hub.
#1
J.D. POWER 2022 NORTH AMERICA AIRPORT SATISFACTION STUDY
#3
‘BEST LARGE US AIRPORTS’ THE WALL STREET JOURNAL (2022)
The 3,400-acre transportation hub comprises a major economic powerhouse, supporting more than 86,900 jobs, $15.9 billion in business revenue, $3.7 billion in personal income, $2.5 billion in local purchases, and $546 million in state and local taxes.
30 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
INCREASING INTERNATIONAL AND DOMESTIC FLIGHT PATTERNS AT MSP AIRPORT
• Delta restarted its daily service to London Heathrow (LHR) in April 2022 after a two-year hiatus
• Condor Airlines relaunched its non-stop flight to Frankfurt, Germany, (FRA) on June 1, 2022
• Sun Country launched its first-ever service to Canada, with a new route between MSP and Vancouver which began June 15, 2022
• Air Canada launched a new year-round, daily flight from MSP to Montreal-Trudeau International Airport (YUL) in Summer 2022
• Delta will join Allegiant and Sun Country in adding a non-stop route from MSP to Destin, Florida and the Florida Panhandle in Spring 2023
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2014 35.2 36.6 37.5 38.0 38.0 39.6 14.9 31.1 25.2 2015 2016 2017 2018 2019 2020 2021 TTM NOV.2022
MSP Airport Passenger Trend Passengers (in Millions)
MSP AIRPORT ANNUAL PASSENGER TRAFFIC IS PROJECTED TO RETURN TO PRE-PANDEMIC LEVELS (~40 MILLION) BY 2024
Source: Metropolitan Airports Commission (MAC)
Major Developments
The Minneapolis Big Build is a collection of $2 billion in projects that are transforming the city by adding new facilities, green space, and public amenities. Minneapolis has already begun its transformation with the redesign of the city’s signature street, Nicolette, the opening of the new U.S. Bank Stadium and Commons Park, and a major renovation to Target Center. Most recently, the opening of the Dayton’s Project and RBC Gateway have added office, retail, multifamily, hospitality, and entertainment space within the CBD. Collectively, the projects included in the Big Build are cultivating an even more vibrant, live-work-play city.
$2B
IN TRANSFORMATIVE PROJECTS
32 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
MARKET OVERVIEW U.S. Bank Stadium and Commons Park
Dayton's Project
RBC Gateway
Approved in March of 2022, the Bloomington City Council and Bloomington Port Authority authorized a redevelopment and financing agreement for Mall of America’s ‘Phase II’ expansion plans. According to the plan, the water park would be built at the north side of the mall, next to the JW Marriott, along with a skyway connected to a 1,300-space parking ramp. Eventually, a water park hotel would be built, and the connected parking structure would add another 1,100 spaces. The fourth phase of the plan would allow for the construction of an entertainment venue, hotel complex with event spaces, and a multi-level office campus. The first phase is expected to open in the fall of 2023 with the grand opening tentatively planned for late 2024.
$422M EXPANSION
ANTICIPATED TO ATTRACT AN ADDITIONAL 20M ANNUAL VISITORS
+100% ANNUAL ECONOMIC IMPACT ($4.3B ESTIMATED)
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Rendering
Rendering
VIKING LAKES MIXED-USE DEVELOPMENT
Development has been underway at Viking Lakes since 2016 and is expected to continue through 2026. As of early 2022, the 200-acre, mixed-use development in Eagan is home to the NFL’s Minnesota Vikings headquarters and practice facility; practice stadium; the $98 million, 320-room Omni Viking Lakes Hotel; a medical office building; and a portion of the 1,000-plus residential units that will eventually emerge. At build-out, Viking Lakes will have a total of about three million square feet of corporate offices, retail, medical space, and multifamily residences.
• 200-Acre Mixed-Use Development
• Total Cost → $3B
• 3M SF of Total Space
34 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
MARKET OVERVIEW
SOUTHWEST LIGHT RAIL TRANSIT
$2.8B
RAIL LINE EXPANSION
In November 2018, the Twin Cities Met Council received approval to begin construction on its $2.8 billion Southwest Light Rail Transit (SWLRT) extension. Groundbreaking for the entire project was in December 2018. In August 2021, the first rail for the SWLRT Green Line Extension was laid in the suburb of Hopkins and will extend light rail service 14.5 miles from Downtown Minneapolis to Eden Prairie with 16 stations along the way. As of spring 2022, about 60% of the track and bridge work was completed. Upon final delivery, the light rail extension is expected to spur significant job growth, provide access to employment, and prompt further economic development in communities along the line. SWLRT is expected to begin passenger service in 2027.
Downtown Minneapolis → Eden Prairie (20-minutes West of Bloomington)
RIVERS EDGE – ST. PAUL
$788M
MIXED-USE DEVELOPMENT
Dallas-based AECOM has formed a public-private alliance with Ramsey County to develop RiversEdge, a nineacre site overlooking the Mississippi River in St. Paul. The $788 million project will include a mix of Class A offices, apartments, retail, entertainment, and hospitality uses across four towers ranging from 15 to 29 stories. The $278 million first phase, anticipated to be ready by 2023, will deliver 132,000 square feet of public space and trail connections, two towers with a 168-key hotel, 56 condo units, 350 rental apartments, 11,500 square feet of retail, and 500 parking spaces. Phases two and three will bring two office / retail towers with additional parking. The development will create a total of more than 5,000 construction and permanent jobs and generate more than $15 million in property tax revenue annually.
5,000
NEW JOBS
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Competitive Set Overview
Competitive Set Overview
Elliot Park Hotel’s current competitive set includes six nearby properties totaling 1,363 keys. Elliot Park is one of three Marriott-branded hotels within the set, and the latest Autograph-branded property. As the third newest in the set, the Hotel has garnered strong rates, with an ADR penetration of 100.1 as of YE 2022, and continues to build towards outperforming occupancy.
38 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS Property Location Rooms Opened Autograph Collection Elliot Park Hotel Minneapolis, MN 168 2018 The Marquette Hotel, Curio Collection by Hilton Minneapolis, MN 276 1970 Hyatt Centric Minneapolis Downtown Minneapolis, MN 154 2000 Loews Minneapolis Hotel Minneapolis, MN 251 2003 Emery Autograph Collection Minneapolis, MN 229 2008 Canopy by Hilton Minneapolis Mill District Minneapolis, MN 183 2019 Tribute Portfolio Rand Tower, Minneapolis Minneapolis, MN 270 2020 Total 1,531 Source: Smith Travel Research Occupancy ADR RevPAR Period Subject Comp. Set Index Ranking Subject Comp. Set Index Ranking Subject Comp. Set Index Ranking Year End 2020 24.5% 18.6% 131.7% 1 of 7 $155.31 $141.29 109.9% 2 of 7 $38.13 $26.34 144.8% 1 of 7 Year End 2021 25.8% 27.4% 94.3% 5 of 7 $146.95 $151.68 96.9% 4 of 7 $37.92 $41.49 91.4% 5 of 7 Year End 2022 42.4% 46.2% 91.6% 6 of 7 $181.32 $181.20 100.1% 4 of 7 $76.81 $83.75 91.7% 5 of 7 Change vs. Prior Year Year End 2021 5.1% 46.7% -28.4% 7 of 7 -5.4% 7.4% -11.9% 6 of 7 -0.5% 57.5% -36.9% 7 of 7 Year End 2022 64.2% 69.0% -2.8% 4 of 7 23.4% 19.5% 3.3% 4 of 7 102.6% 101.9% 0.3% 5 of 7
The Marquette Hotel, Curio Collection by Hilton Hyatt Centric Minneapolis Downtown Location 823 Fifth Ave S Minneapolis, MN 55404 710 S Marquette Ave Minneapolis, MN 55402 615 2nd Ave S Minneapolis, MN 55402 Year Built/ Renovated 2018 1970 / 2017 2000 / 2020 Rooms 168 276 154 F&B Tavola Italian Kitchen + Bar Jolliet House The Marquette Lounge SIX15 Bar & Lounge In-Room Dining Meeting Space 3,005 SF 35,000 SF 7,400 SF Amenities Fitness Center Business Center Complimentary Wi-Fi Fitness Center Business Center Complimentary Wi-Fi Fitness Center Complimentary Wi-Fi Labor Non-Union Union Non-Union
40 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS
Competitive Set Chart
Loews Minneapolis Hotel Emery Autograph Collection Canopy by Hilton Minneapolis Mill District Tribute Portfolio Rand Tower, Minneapolis 601 N 1st Ave Minneapolis, MN 55403 215 S 4th St Minneapolis, MN 55401 708 S 3rd St Minneapolis, MN 55415 527 S Marquette Ave Minneapolis, MN 55402 2003 / 2015 2008 / 2019 2019 2020 251 229 183 270 Cosmos In-Room Dining Giulia Spyhouse Coffee Umbra Bar Rufus Miaou Miaou Blondette In-Room Dining 15,000 SF 5,104 SF 5,903 SF 7,141 SF Fitness Center Business Center Complimentary Wi-Fi Fitness Center Complimentary Wi-Fi Fitness Center Business Center Complimentary Wi-Fi Fitness Center Complimentary Wi-Fi Union Non-Union Non-Union Non-Union 41
Financial Overview
Historical Performance
44 AUTOGRAPH COLLECTION ELLIOT PARK HOTEL | MINNEAPOLIS 12 Months Ending December 31, 2018 12 Months Ending December 31, 2019 12 Months Ending December 31, 2020 12 Months Ending December 31, 2021 12 Months Ending December 31, 2022 Budget 12 Months Ending December 31, 2023 Rooms 168 168 168 168 168 168 Available Rooms 17,472 61,320 15,456 61,320 61,320 61,320 Rooms Sold 4,642 32,151 1,209 16,041 26,471 34,425 Occupancy 26.6% 52.4% 7.8% 26.2% 43.2% 56.1% ADR $188.90 $192.32 $138.41 $145.15 $177.39 $184.82 ADR % Change 1.8% -28.0% 4.9% 22.2% 4.2% RevPAR $50.19 $100.83 $10.83 $37.97 $76.58 $103.76 RevPAR % Change 100.9% -89.3% 250.7% 101.7% 35.5% Revenue Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Rooms $876,893 62.5% $6,183,154 74.7% $167,332 86.2% $2,328,314 72.1% $4,695,719 73.5% $6,362,257 72.6% Food & Beverage $476,461 34.0% $1,820,959 22.0% $24,679 12.7% $811,848 25.2% $1,456,289 22.8% $2,122,947 24.2% Other Operated Departments $44,834 3.2% $216,602 2.6% $0 0.0% $0 0.0% $0 0.0% $0 0.0% Miscellaneous $4,852 0.3% $56,069 0.7% $2,009 1.0% $87,724 2.7% $237,140 3.7% $280,746 3.2% Total Revenue $1,403,040 100.0% $8,276,784 100.0% $194,020 100.0% $3,227,886 100.0% $6,389,148 100.0% $8,765,950 100.0% Departmental Expenses Rooms $373,076 42.5% $1,626,894 26.3% $163,114 97.5% $884,228 38.0% $1,622,360 34.5% $1,836,712 28.9% Food & Beverage $663,242 139.2% $2,232,312 122.6% $82,661 334.9% $864,838 106.5% $1,661,954 114.1% $2,012,732 94.8% Other Operated Departments $109,211 243.6% $371,113 171.3% $0 0.0% $0 0.0% $0 0.0% $0 0.0% Miscellaneous $0 0.0% $0 0.0% -$2,791 -138.9% $69,285 79.0% $197,073 0.0% $194,061 69.1% Total Expenses $1,145,529 81.6% $4,230,319 51.1% $242,984 125.2% $1,818,351 56.3% $3,481,387 54.5% $4,043,505 46.1% Gross Operating Income $257,511 18.4% $4,046,465 48.9% -$48,964 -25.2% $1,409,535 43.7% $2,907,761 45.5% $4,722,445 53.9% Undistributed Operating Expenses Administrative & General $152,876 10.9% $734,286 8.9% $202,233 104.2% $597,444 18.5% $919,273 14.4% $986,003 11.2% Information & Telecommunications $41,415 3.0% $211,106 2.6% $64,399 33.2% $166,527 5.2% $187,933 2.9% $219,665 2.5% Sales & Marketing $194,434 13.9% $1,128,800 13.6% $91,811 47.3% $572,843 17.7% $918,687 14.4% $1,207,176 13.8% Repairs & Maintenance $96,705 6.9% $367,261 4.4% $52,920 27.3% $227,661 7.1% $400,519 6.3% $481,557 5.5% Energy Costs $64,057 4.6% $204,684 2.5% $54,526 28.1% $233,611 7.2% $303,863 4.8% $332,999 3.8% Total Undistributed Operating Expenses $549,487 39.2% $2,646,137 32.0% $465,889 240.1% $1,798,086 55.7% $2,730,275 42.7% $3,227,400 36.8% Gross Operating Profit -$291,976 -20.8% $1,400,328 16.9% -$514,853 -265.4% -$388,551 -12.0% $177,486 2.8% $1,495,045 17.1% Fixed Charges Insurance $18,169 1.3% $113,049 1.4% $50,298 25.9% $111,045 3.4% -$74,771 -1.2% $112,860 1.3% Property & Other Taxes $845 0.1% $635,345 7.7% $226,500 116.7% $832,630 25.8% $587,058 9.2% $610,536 7.0% CAM Charges $208 0.0% $14,472 0.2% $47,533 24.5% $100,486 3.1% $115,899 1.8% $115,464 1.3% Management Fees (1) $42,091 3.0% $248,304 3.0% $5,821 3.0% $96,837 3.0% $191,527 3.0% $262,979 3.0% Total Fixed Charges $61,313 4.4% $1,011,170 12.2% $330,152 170.2% $1,140,998 35.3% $819,713 12.8% $1,101,839 12.6% EBITDA -$353,289 -25.2% $389,158 4.7% -$845,005 -435.5% -$1,529,549 -47.4% -$642,227 -10.1% $393,207 4.5% Reserve for Replacement (2) $56,122 4.0% $331,071 4.0% $7,761 4.0% $129,115 4.0% $255,369 4.0% $350,638 4.0% Net Operating Income -$409,411 -29.2% $58,087 0.7% -$852,765 -439.5% -$1,658,664 -51.4% -$897,596 -14.0% $42,569 0.5% NOI / Key -$2,437 $346 -$5,076 -$9,873 -$5,343 $253
(1) Management Fees have been assumed to be 3.00% of Total Revenues. (2) Replacement Reserve has been assumed to be 4.00% of Total Revenues. (3) The Hotel opened in September 2018, and was closed from April through September 2020.
Pro Forma
IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is intended only for use by Berkadia® and their clients. This file may not be reproduced physically or in electronic format without the express written consent of Berkadia. Not responsible for errors and omissions.
45 2023 2024 2025 2026 2027 Rooms 168 168 168 168 168 Available Rooms 61,320 61,488 61,320 61,320 61,320 Rooms Sold 34,425 39,967 45,377 45,377 45,377 Occupancy 56.1% 65.0% 74.0% 74.0% 74.0% ADR $184.82 $207.92 $230.79 $242.33 $249.60 ADR % Change 104.2% 12.5% 11.0% 5.0% 3.0% RevPAR $103.76 $135.15 $170.78 $179.32 $184.70 RevPAR % Change 35.5% 30.3% 26.4% 5.0% 3.0% Revenue Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Rooms $6,362,257 72.6% $8,309,856 72.4% $10,472,410 72.8% $10,996,030 72.8% $11,325,911 72.7% Food & Beverage $2,122,947 24.2% $2,809,789 24.5% $3,477,206 24.2% $3,651,066 24.2% $3,760,598 24.2% Other Operated Departments $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% Miscellaneous $280,746 3.2% $358,539 3.1% $439,633 3.1% $461,614 3.1% $484,695 3.1% Total Revenue $8,765,950 100.0% $11,478,184 100.0% $14,389,248 100.0% $15,108,711 100.0% $15,571,204 100.0% Departmental Expenses Rooms $1,836,712 28.9% $2,078,294 25.0% $2,430,381 23.2% $2,503,293 22.8% $2,578,392 22.8% Food & Beverage $2,012,732 94.8% $2,528,811 90.0% $2,781,765 80.0% $2,920,853 80.0% $3,008,479 80.0% Other Operated Departments $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% Miscellaneous $194,061 144.7% $233,050 153.8% $285,761 153.8% $300,049 153.8% $315,052 153.8% Total Expenses $4,043,505 46.1% $4,840,155 42.2% $5,497,907 38.2% $5,724,195 37.9% $5,901,922 37.9% Gross Operating Income $4,722,445 53.9% $6,638,029 57.8% $8,891,341 61.8% $9,384,516 62.1% $9,669,282 62.1% Undistributed Operating Expenses Administrative & General $986,003 11.2% $940,800 8.2% $969,024 6.7% $998,095 6.6% $1,028,038 6.6% Information & Telecommunications $219,665 2.5% $287,631 2.5% $360,579 2.5% $378,608 2.5% $390,197 2.5% Sales & Marketing $1,207,176 13.8% $1,176,000 10.2% $1,211,280 8.4% $1,247,618 8.3% $1,285,047 8.3% Repairs & Maintenance $481,557 5.5% $575,857 5.0% $673,414 4.7% $693,616 4.6% $714,425 4.6% Energy Costs $332,999 3.8% $398,208 3.5% $465,669 3.2% $479,639 3.2% $494,028 3.2% Total Undistributed Operating Expenses $3,227,400 36.8% $3,378,496 29.4% $3,679,965 25.6% $3,797,576 25.1% $3,911,735 25.1% Gross Operating Profit $1,495,045 17.1% $3,259,534 28.4% $5,211,375 36.2% $5,586,940 37.0% $5,757,548 37.0% Fixed Charges Insurance $112,860 1.3% $115,080 1.0% $118,532 0.8% $122,088 0.8% $125,751 0.8% Property & Other Taxes $610,536 7.0% $628,852 5.5% $647,718 4.5% $667,149 4.4% $687,164 4.4% CAM Charges $115,464 1.3% $117,600 1.0% $121,128 0.8% $124,762 0.8% $128,505 0.8% Management Fees $262,979 3.0% $344,346 3.0% $431,677 3.0% $453,261 3.0% $467,136 3.0% Total Fixed Charges $1,101,839 12.6% $1,205,878 10.5% $1,319,055 9.2% $1,367,261 9.0% $1,408,555 9.0% EBITDA $393,207 4.5% $2,053,656 17.9% $3,892,320 27.1% $4,219,679 27.9% $4,348,992 27.9% Reserve for Replacement (2) $350,638 4.0% $459,127 4.0% $575,570 4.0% $604,348 4.0% $622,848 4.0% Net Operating Income $42,569 0.5% $1,594,529 13.9% $3,316,750 23.1% $3,615,330 23.9% $3,726,144 23.9% NOI / Key $253 $9,491 $19,743 $21,520 $22,179
INVESTMENT SALES
RYAN LINDGREN
Managing Director
312.888.5438
ryan.lindgren@berkadia.com
MELISSA TSOURMAS
Associate Director
312.845.1889
melissa.tsourmas@berkadia.com
MILES MATALON Analyst
312.845.3083
miles.matalon@berkadia.com
RALPH DEPASQUALE
mauricio.rodriguez@berkadia.com
FINANCING
Minnesota Broker of Record License #40414059 ANDREW COLEMAN Senior Managing Director 240.204.5132
andrew.coleman@berkadia.com MAURICIO RODRIGUEZ Managing Director 240.204.5133
CHICAGO 125 South Wacker Drive Suite 400 Chicago, IL 60606 DC METRO 4445 Willard Ave Suite 1200 Chevy Chase, MD 20815
Disclaimer & Confidentiality Agreement
The material contained in this document is confidential, furnished solely for the purpose of considering investment in the property described therein and is not to be copied and/or used for any purpose or made available to any other person without the express written consent of Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. In accepting this, the recipient agrees to keep all material contained herein confidential.
This information package has been prepared to provide summary information to prospective purchasers and to establish a preliminary level of interest in the property described herein. It does not, however, purport to present all material information regarding the subject property, and it is not a substitute for a thorough due diligence investigation. In particular, Berkadia Real Estate Advisors LLC, Berkadia Real Estate Advisors Inc. and Seller have not made any investigation of the actual property, the tenants, the operating history, financial reports, leases, square footage, age or any other aspect of the property, including but not limited to any potential environmental problems that may exist and make no warranty or representation whatsoever concerning these issues. The information contained in this information package has been obtained from sources we believe to be reliable; however, Berkadia Real Estate Advisors LLC, Berkadia Real Estate Advisors Inc. and Seller have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Any pro formas, projections, opinions, assumptions or estimates used are for example only and do not necessarily represent the current or future performance of the property.
Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. and Seller strongly recommend that prospective purchasers conduct an in-depth investigation of every physical and financial aspect of the property to determine if the property meets their needs and expectations. We also recommend that prospective purchasers consult with their tax, financial and legal advisors on any matter that may affect their decision to purchase the property and the subsequent consequences of ownership.
All parties are advised that in any property the presence of certain kinds of molds, funguses, or other organisms may adversely affect the property and the health of some individuals.
Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. recommend, if prospective buyers have questions or concerns regarding this issue, that prospective buyers conduct further inspections by a qualified professional.
The Seller retains the right to withdraw, modify or cancel this offer to sell at any time and without any notice or obligation. Any sale is subject to the sole and unrestricted approval of Seller, and Seller shall be under no obligation to any party until such time as Seller and any other necessary parties have executed a contract of sale containing terms and conditions acceptable to Seller and such obligations of Seller shall only be those in such contract of sale.
For more information on these and other Berkadia® exclusive listings, please visit our website at www.Berkadia.com
Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry.
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Berkadia® is a trademark of Berkadia Proprietary Holding LLC
Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by the Tax Credit Syndication group. In California, Berkadia Real Estate Advisors Inc. conducts business under CA Real Estate Broker License #01931050; Adrienne Barr, CA DRE Lic. # 01308753. Berkadia Commercial Mortgage LLC conducts business under CA Finance Lender & Broker Lic. #988-0701; and Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116. This proposal is not intended to solicit commercial mortgage loan brokerage business in Nevada. For state licensing details, visit: https://www.berkadia.com/licensing/
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RALEIGH | BOSTON | SCOTTSDALE | SAN DIEGO CHICAGO | DC METRO | TAMPA | ORLANDO | MIAMI
Berkshire Hathaway and Jefferies Financial Group company
