ACHI by Michael Jennings

CHICAGO PROPOSALS

INVESTING STRATEGY: PRESERVING CAPITAL

American Capital Hotel Investments, LLC (â&#x20AC;&#x153;ACHIâ&#x20AC;?) focuses on providing solid returns in stable investments that protect the initial capital investment.

A quick summary of our objectives and how we underwrite a hotel investment: ACHI OBJECTIVE

TARGETED ACTION

Present Investors with hotel investment opportunities that provide for active responsibilities in the transaction.

ACHI has created an investment vehicle that provides for direct ownership in the asset. Investors own the real estate, not a share in a fund.

Identify assets with reasonable returns that are designed to protect capital.

The process ACHI utilizes to screen and underwrite transactions is designed to create a safe investment while targeting a 9%-15% return.

Allow Investors to understand the market in which their investment is located.

By operating in an open and collaborative manner with our Investors, ACHI will educate our Investors on the asset and the surrounding area.

Achieve critical mass by presenting Investors with hotel ownership opportunities.

With a 27-year track record in the hospitality industry, ACHI brings a vast network of brokerage houses, lenders and owners to the venture. Our pipeline of transaction activity allows us to present a continual flow of transactions for review by Investors.

Provide Investors with an investment time horizon of achieving critical mass over the next 24-36 months.

ACHI has a deep and experienced acquisitions team as well as a database of over 2,000 hotels. We can quickly assess opportunities and present to Investors for their review.

Preserve Capital through safe investments while simultaneously creating upside through sound management practices.

ACHI follows a very disciplined and detailed underwriting process for every hotel acquisition. Our long track record testifies to the approach we take on behalf of Investors.

ABOUT US American Capital Hotel Investments was formed as a Joint Venture between The Bricton Group and JLM Capital Strategies, Ltd., a subsidiary of Retail Equity Partners Holdings (REPH). This platform was designed to combine Bricton’s hospitality expertise (Acquisition, Development and Management) and JLM’s expertise in the development, funding and construction of commercial real estate as well as their deep relationships with the Chinese investment community. The Bricton Group is a leading hotel management company that has been providing clients with unparalleled value since 1989. With a diverse portfolio and more than 3,500 hotel rooms across the United States under management, financing, New Market Tax Credits and Tax the company has a proven reputation for Increment Financing (TIF). REPH offers a range delivering superior results. of services to its clients, including Capital Formation strategies, Feasibility Analyses, Bricton’s comprehensive expertise in the Land-Site Acquisition, and Construction/ hospitality industry – from both the service Project Oversight. REPH also provides Asset and real estate viewpoints – empowers us to Management services to the equity investors give clients undivided attention and tailor our in its projects. services to address specific needs. REPH, the parent company for JLM, is a full service real estate development company focused on the development and construction of commercial real estate. REPH creates and designs alternative funding structures that blend traditional debt/equity financing with non-traditional funding such as EB-5

The Cass Hotel

Since 1989

3,500 Hotel Rooms Managed Across USA

The Felix Hotel

KEY RELATIONSHIPS

American Capital Hotel Investments has long-standing and deep relationships with three key segments to ensure Investors that their investments are carefully underwritten with the utmost integrity.

1. Major United States Hotel Franchise Companies Over its 27-years, ACHI has worked with all of the major franchise companies including Hilton, Hyatt, Marriott, Intercontinental Hotels Group, Starwood and LaQuinta. These relationships will provide Investors with immediate access to senior executives in these companies and can facilitate the Investors’ ownership in the franchise. As Investors begin the process of owning and franchising hotels in the United States, these relationships will prove quite valuable.

2. Major United States Hotel Investment Banking Companies ACHI has transacted with all the major (and many smaller) hotel investment banking companies. Our contacts within each of these companies continually call us and forward hotel acquisition opportunities. This ensures our Investors that they are given an early look at all possible opportunities.

3. United States of America-China Chamber of Commerce Membership ACHI is a proud member of the United States of America – China Chamber of Commerce (“USCCC”). Our long-term relationship with the organization and its President provides Investors with an opportunity to verify the business integrity of ACHI. The USCCC is a Chicago-based organization which focuses on developing relationships between companies in China and the United States.

OUR FORMULA FOR SUCCESS A hotel or resort is a two-edged investment; its rate of return is dependent upon recognizing that each hotel is both a Real Estate Investment and a Service Industry Investment.

REAL ESTATE

SERVICE INDUSTRY

A hotel is an investment in an income-generating property with a land component. Therefore, a hotel or resort demands the same sophisticated evaluation and analysis that would be applied to a high-rise office building, shopping mall or other significant real estate investment.

A successful hospitality operation must anticipate and respond to customer and market demands while at the same time operating in an efficient manner which drives revenues to the bottom line. This means employing management professionals with a creative, comprehensive and competitive approach to every aspect of the hospitality industry.

BUY IT RIGHT Income generated by the property must support the costs of acquiring, developing and/or renovating the site and building.

RUN IT RIGHT On-site management, operations and marketing must ensure service effectiveness and satisfied return customers.

ACHI recognizes that failure to successfully navigate either of these two major components guarantees a flawed investment. We understand these complicated challenges and have an exemplary track record to show for it. 5

Shares the Bricton Culture

Our nationally recognized â&#x20AC;&#x153;push-upâ&#x20AC;? style of management results in a culture that is attentive to the guest while fostering a positive work environment for the associate.

EXECUTIVE SUMMARY AMERICAN CAPITAL HOTEL INVESTMENTS LLC is presenting the Hotel Felix opportunity, a 225-room hotel ideally situated in downtown Chicago. Renovated in 2009, the hotel requires little capital investment, operates extremely efficiently, and has a 2015 NOI margin of 44%. With a high historic occupancy and strong potential to increase the average RevPar penetration, the property offers a potential purchaser a strong, stable capital investment with a conservatively projected 13.9% 10-year leveraged IRR.

Key Investment Highlights ■ Fee simple real estate in the highly desirable River North entertainment district within the heart of downtown Chicago. ■ Provides immediate return on equity and is purchased at a 23% discount to replacement value with new construction costs over $400,000 per room. ■ Impressive trailing-12 month through October 2015 RevPAR growth of 15% relative to the same-time-last-year. ■ Highly efficient operating model evidenced by the Property’s average NOI margin of 41% (2010 – 2015 A/F thru October). ■ Robust return growth potential as management is projecting year-end 2015 RevPAR to improve 13.6% over 2014 levels and NOI is expected to improve 26.3% ■ Offered with an assumable $47 million CMBS loan bearing a fixed interest rate of 5.28% maturing in December 2023.

■ The Hotel Felix is Chicago’s first Silver LEED-certified hotel and was a finalist for the “Downtown Redevelopment of the Year” (Chicago Commercial Real Estate Awards).

Strong Local Partnerships ■ While operating nationally, ACHI has been involved in numerous Chicago-area hotel projects, including the Hotel Cass Chicago, Doubletree Chicago North Shore, Jaslin Hotel Chinatown, and the Marriott Naperville. ■ American Capital Hotel Investment’s proven track record at the Hotel Felix reflects an ability to operate hotels in downtown Chicago with an NOI margin that is materially higher than the overall market performance. ■ As an active hotel developer and owner, ACHI has strong ties to the local business community which will provide on-the-ground investment oversight and a likely conduit to future investment opportunities.

Unparalleled Downtown Chicago Location

Strong Lodging Market

■ With 77 distinct neighborhoods, Chicago is one of the nation’s most diverse cities. The Hotel Felix’s River North location is in the epicenter of Chicago’s thriving, nationally acclaimed restaurant and entertainment district. Blocks from one of the most popular retail streets in the world, the “Magnificent Mile” averages 50,000 pedestrians per day and is often compared to New York’s Fifth Avenue, Hong Kong’s Causeway Bay, London’s Bond Street, Beverly Hill’s Rodeo Drive, Paris’ Champs Elysees and Tokyo’s Ginza District.

■ Chicago is the third largest lodging market in the United States and has consistently been one of the best performing domestic markets, evidenced by the Chicago MSA’s RevPAR growth of 8.7% through year-to-date October 2015 from the prior year, 200 basis points above the national average RevPAR improvement during the same timeframe.

■ The Hotel Felix is located approximately 16 miles from the world’s busiest O’Hare International Airport, and 12 miles from Midway International Airport, both of which have experienced an increase in enplanements for five consecutive years.

■ As a leading tourist attraction and convention center host, Chicago has seen five consecutive years of growth in annual visitors equaling a CAGR of 6.3 percent between 2010 and 2014. Home to McCormick Place, the largest convention center in the country attracts over 2 million attendees hosting hundreds of trades shows and conventions. ■ Chicago is the third largest metropolitan area in the country with a population of 9.5 million. The 33 Fortune 500 companies headquartered in Chicago continue to grow the employment base and expand on the 177 million square feet of office space.

■ The downtown Chicago lodging market has demonstrated strong and sustained RevPAR growth, registering a RevPAR Compound Annual Growth Rate (CAGR) of 7.1% between 2009 and 2014.

La Quinta - River North (conversion from Hotel Felix) | Chicago Downtown Financial Projections Project Parameters / Summary Rooms PIP per Room Renovation Contingency (% of PIP)

Key Investment Metrics 225 9,000 10.00%

Purchase Price Acquisition Capital

Per Room

Total

Cap Rate

311,111

70,000,000

7.14%

334,578

75,280,000

Acquisition Fee (% of total Cap)

2.79%

Recapitalization

370,885

83,449,133

8.00%

Assumable Loan Cost

1.00%

On Exit

450,895

101,451,364

7.00%

Assumable Loan

47,000,000

Acquistion Capital Hotel Purchase Price Third Party Reports/Appraisal Franchise Application Fee PIP

70,000,000 7,500

Unleveraged IRR - 10 yr

9.6%

Cash on Cash IRR - 10 yr

12.5%

Comp Set RevPar CAGR

2.97%

Subject Prop RevPar CAGR

4.24%

75,000 150,000

Working Capital

200,000

Interest Reserve

50,000

Renovation Contingency

202,500

Assumable Loan Cost

470,000

Total Acquisition Capitalization

13.9%

2,025,000

Legal

Acquisition Fee

Leveraged IRR - 10 yr

2,100,000 75,280,000

Sources and Uses Total Project Costs

75,280,000

Assumable Loan

47,000,000

Required Equity

28,280,000

Loan-to-Total Capitalization

62%

La Quinta - River North (conversion from Hotel Felix) | Chicago Downtown Financial Projections Cash Flow & IRR Required Equity

Year 0

Cash Flow

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Cash Flow

294,265

1,165,298

1,810,575

2,240,691

2,557,398

2,793,629

3,022,081

3,246,969

3,305,524

3,521,189

(28,280,000)

Cash Flow From Hotel (After debt) Loan Proceeds

3,862,123

Proceeds From Sale (includes one point in sale fees)

100,436,851

Less Outstanding Debt

(40,359,014)

Net Cash Flow Available after Debt Service

(28,280,000)

294,265

1,165,298

1,810,575

2,240,691

2,557,398

2,793,629

3,022,081

3,246,969

7,167,647

63,599,025

(75,280,000)

3,723,227

4,594,260

5,239,537

5,669,653

5,986,359

6,222,591

6,451,043

6,675,931

6,885,931

107,538,446

1.0%

4.1%

6.4%

7.9%

9.0%

9.9%

10.7%

11.5%

11.7%

12.5%

Leveraged IRR - 13.9% Net Cash Flow Available for Debt Unleveraged IRR - 9.6% Cash-On-Cash

Net Cash Flow Available for Debt

Annual RevPar Growth

La Quinta - River North (conversion from Hotel Felix) | Chicago Downtown

Cash Flow Projections

2013

2014

2015

YEAR 1

October T-12

Renovation

YEAR 2

YEAR 3

YEAR 4

3.50%

$196.40

3.50%

$201.80

2.75%

$207.35

2.75%

ADR Comp Set ADR

$166.83

$169.21

$183.34

$189.76

77.6%

81.7%

81.8%

79.0%

0.79

0.77

0.79

0.80

111.4%

104.2%

108.2%

107.0%

Comp Set Rev Par - (YOY Change)

$131.63

$129.95

Subject Hotel Rev Par Penetration

86.5%

85.2%

88.5%

84.5%

91.6%

96.8%

99.0%

Subject Hotel ADR Penetration

84.0%

88.0%

90.0%

OCCUPANCY Comp Set Occupancy Subject Hotel Occupancy Penetration

2.00%

0.80

0.00%

109.0%

0.80

0.00%

110.0%

0.80

0.00%

110.0%

REV PAR -1.29%

$144.47

10.05%

$152.52

5.28%

$157.86

3.38%

$162.20

2.68%

$166.66

2.68%

INCOME Average Daily Rate

$129.48

$138.25

$149.92

$149.91

$164.97

$177.58

$186.61

Occupancy Percentage

88%

80%

85%

86%

88%

RevPar - (YOY Change)

$113.85

$110.67

72,213

65,741

70,053

70,629

71,950

72,610

225

Rooms Sold Number Of Rooms Room Revenue Telephone Other Total Revenue

$9,350,076

89.41%

$3,396 $1,104,295

$9,088,702

-2.88%

89.98%

$2,096 10.56%

$10,457,767

$1,010,244

$127.88

$10,375,904

13.46%

91.92%

$2,963 10.00%

$10,101,042

$909,162

$128.92

$10,587,909

0.81%

92.15%

$2,500 8.05%

$11,288,029

$144.53

$11,869,857

10.80%

92.39%

$3,000

$157.01

$12,894,274

7.94%

92.58%

$3,300

$164.99

$13,549,977

4.84%

92.53%

$3,600

$900,000

7.83%

$975,000

7.59%

$1,030,000

7.40%

$1,090,000

7.44%

$11,490,409

1.76%

$12,847,857

10.57%

$13,927,574

7.75%

$14,643,577

4.89%

30.02%

$3,273,706

27.58%

$3,340,045

25.90%

$3,376,350

$341,250

35.00%

$360,500

35.00%

$381,500

EXPENSES Departmental / POR Rooms Expense Telephone Other

$33.13 $2,392,161

$39.67 25.58%

$2,607,647

42.88%

$368,282

$42,817 $473,531

$39.04 28.69%

$2,734,724

36.45%

$47,080

$45.00

$45.50

26.36%

$3,178,323

$315,149

34.66%

$315,000

35.00%

$54,246

$56,000

$46.00

$58,000

$46.50

$60,000

24.92%

$62,000 35.00%

Undistributed Operating Administrative & General

$630,331

6.03%

$606,685

6.01%

$711,440

6.30%

$746,877

6.50%

$796,567

6.20%

$849,582

6.10%

$893,258

6.10%

Management Fee

$313,758

3.00%

$303,031

3.00%

$338,612

3.00%

$344,712

3.00%

$385,436

3.00%

$417,827

3.00%

$439,307

3.00%

Sales & Marketing

$437,474

4.18%

$454,023

4.49%

$433,413

3.84%

$172,356

1.50%

$192,718

1.50%

$208,914

1.50%

$219,654

1.50%

Franchise

$265,426

2.84%

$194,727

2.14%

$210,222

2.03%

$952,912

9.00%

$1,068,287

9.00%

$1,160,485

9.00%

$1,219,498

9.00%

Property Operations & Maintenance

$461,930

4.42%

$472,699

4.68%

$410,065

3.63%

$459,616

4.00%

$488,219

3.80%

$529,248

3.80%

$541,812

3.70%

Utilities

$237,807

2.27%

$273,690

2.71%

$271,277

2.40%

$275,770

2.40%

$295,501

2.30%

$320,334

2.30%

$336,802

2.30%

$5,202,532

49.75%

$4,773,178

47.25%

$5,808,881

51.46%

$4,988,843

43.42%

$5,948,174

46.30%

$6,680,640

47.97%

$7,173,396

48.99%

Taxes

$168,981

1.62%

$340,567

3.37%

$253,196

2.24%

$700,000

6.09%

$730,000

5.68%

$770,000

5.53%

$800,000

5.46%

F, F, & E Reserve

$418,311

4.00%

$404,042

4.00%

$451,521

4.00%

$459,616

4.00%

$513,914

4.00%

$557,103

4.00%

$585,743

4.00%

Insurance

$92,757

0.89%

$101,863

1.01%

$104,074

0.92%

$106,000

0.92%

$110,000

0.86%

$114,000

0.82%

$118,000

0.81%

Gross Operating Profit Fixed Charges

Total Expenses

$5,935,284

Net Cash Flow Available for Debt

$4,522,483

Debt Service Net Cash Flow After Debt

$6,174,336 43.25%

$3,926,706

$6,287,939 38.87%

$5,000,090

$7,767,183 44.30%

$3,723,227

$8,253,597 32.40%

$3,428,961 $294,265

$4,594,260

$8,688,037 35.76%

$3,428,961 2.56%

$1,165,298

$5,239,537

$8,973,924 37.62%

$3,428,961 9.07%

$1,810,575

$5,669,653

38.72%

$3,428,961 13.00%

$2,240,691

15.30%

Cash Flow Projections

La Quinta - River North (conversion from Hotel Felix) | Chicago Downtown

CONTINUED

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

$213.05

2.75%

$218.91

2.75%

$224.60

2.60%

$230.22

2.50%

$235.51

2.30%

$240.93

2.30%

ADR Comp Set ADR Subject Hotel ADR Penetration

91.0%

OCCUPANCY Comp Set Occupancy Subject Hotel Occupancy Penetration

0.80

0.00%

110.0%

0.80

0.00%

110.0%

0.80

0.00%

110.0%

0.80

0.00%

110.0%

0.80

0.00%

110.0%

0.80

0.00%

110.0%

REV PAR Comp Set Rev Par - (YOY Change)

$171.24

Subject Hotel Rev Par Penetration

100.1%

2.68%

$175.95 100.1%

2.68%

$180.53 100.1%

2.53%

$185.04 100.1%

2.44%

$189.29 100.1%

2.25%

$193.65 100.1%

$193.88

$199.21

$204.39

$209.50

$214.32

$219.24

2.25%

INCOME Average Daily Rate Occupancy Percentage

88%

RevPar - (YOY Change)

$171.41

Rooms Sold

72,610

Number Of Rooms Room Revenue Telephone Other Total Revenue

88% 3.75%

88% 2.68%

72,610

225 $14,077,297

$176.13

$14,464,422

$1,125,000

$14,840,497

7.40%

$1,125,000

7.40%

$15,206,197

3.70%

$15,593,322

24.24%

$3,448,959

35.00%

$393,750

$185.22

$15,211,510

$1,125,000

7.40%

2.48%

$15,969,397

23.84%

$3,485,264

35.00%

$393,750

$189.48

$15,561,375

$1,125,000

7.40%

100.00%

$16,340,410

23.48%

$3,521,569

35.00%

$393,750

$193.84

2.25%

72,610

225 100.03%

$3,900

88% 2.25%

72,610

225 97.60%

$3,900

88% 2.44%

72,610

225 95.12%

$3,900

88% 99.99%

72,610

225 92.58%

$180.71

225 102.34%

$15,919,286

$1,125,000

7.40%

$1,125,000

7.40%

2.27%

$16,690,275

2.10%

$17,048,186

2.10%

23.15%

$3,557,874

22.86%

$3,594,179

35.00%

$393,750

35.00%

$393,750

$3,900

104.69%

$3,900

EXPENSES Departmental / POR Rooms Expense Telephone Other

$47.00 $3,412,654

$47.50

$64,000 $393,750

$48.00

$64,000

$48.50

$64,000

$49.00

$64,000

$49.50

$64,000

22.58%

$64,000 35.00%

Undistributed Operating Administrative & General

$927,578

6.10%

$951,193

6.10%

$974,133

6.10%

$996,765

6.10%

$1,018,107

6.10%

$1,039,939

6.10%

Management Fee

$456,186

3.00%

$467,800

3.00%

$479,082

3.00%

$490,212

3.00%

$500,708

3.00%

$511,446

3.00%

Sales & Marketing Franchise

$228,093

1.50%

$233,900

1.50%

$239,541

1.50%

$245,106

1.50%

$250,354

1.50%

$255,723

1.50%

$1,266,957

9.00%

$1,301,798

9.00%

$1,335,645

9.00%

$1,369,036

9.00%

$1,400,524

9.00%

$1,432,736

9.00%

Property Operations & Maintenance

$562,629

3.70%

$576,953

3.70%

$590,868

3.70%

$604,595

3.70%

$617,540

3.70%

$630,783

3.70%

Utilities

$349,743

2.30%

$358,646

2.30%

$367,296

2.30%

$375,829

2.30%

$383,876

2.30%

$392,108

2.30%

$7,544,607

49.62%

$7,796,324

50.00%

$8,039,819

50.35%

$8,279,547

50.67%

$8,503,542

50.95%

$8,733,523

51.23%

Taxes

$830,000

5.46%

$830,000

5.32%

$830,000

5.20%

$830,000

5.08%

$830,000

4.97%

$830,000

4.87%

F, F, & E Reserve

$608,248

4.00%

$623,733

4.00%

$638,776

4.00%

$653,616

4.00%

$667,611

4.00%

$681,927

4.00%

Insurance

$120,000

0.79%

$120,000

0.77%

$120,000

0.75%

$120,000

0.73%

$120,000

0.72%

$120,000

0.70%

Gross Operating Profit Fixed Charges

Total Expenses

$9,219,838

Net Cash Flow Available for Debt

$5,986,359

Debt Service Net Cash Flow After Debt

$9,370,732 39.37%

$3,428,961 $2,557,398

$6,222,591

$9,518,355 39.91%

$3,428,961 16.82%

$2,793,629

$6,451,043

$9,664,479 40.40%

$3,428,961 17.92%

$3,022,081

$6,675,931

$9,804,344 40.86%

$3,428,961 18.92%

$3,246,969

$6,885,931

$9,946,591 41.26%

$3,580,407 19.87%

$3,305,524

$7,101,595

41.66%

$3,580,407 19.81%

$3,521,189

20.65%

La Quinta - River North (conversion from Hotel Felix) | Chicago Downtown Financial Projections Loan Recapitialization Hotel Cap Rate Valuation @ Year 8 Hotel Value @ Year 8 LTV Re-Finance New Loan Amount Interest Rate Amortization (Years) Period

8.00% 83,449,133 50% $41,724,566 7.00% 25 Beginning Balance

Payment

Interest

Principal

Ending Balance

YEAR 9

41,724,566

3,580,407

2,920,720

659,687

41,064,879

YEAR 10

41,064,879

3,580,407

2,874,542

705,865

40,359,014

Beginning Balance

Payment

Interest

Principal

Ending Balance

YEAR 1

47,000,000

3,428,961

2,481,600

947,361

46,052,639

YEAR 2

46,052,639

3,428,961

2,431,579

997,382

45,055,256

YEAR 3

45,055,256

3,428,961

2,378,918

1,050,044

44,005,213

YEAR 4

44,005,213

3,428,961

2,323,475

1,105,486

42,899,726

YEAR 5

42,899,726

3,428,961

2,265,106

1,163,856

41,735,871

YEAR 6

41,735,871

3,428,961

2,203,654

1,225,307

40,510,563

YEAR 7

40,510,563

3,428,961

2,138,958

1,290,004

39,220,559

YEAR 8

39,220,559

3,428,961

2,070,846

1,358,116

37,862,444

Loan Amortization Schedule Assumable Loan Interest Rate Amortization (Years) Period

47,000,000 5.28% 25

EXECUTIVE SUMMARY AMERICAN CAPITAL HOTEL INVESTMENTS LLC is presenting the Hotel Cass opportunity, a 174-room Holiday Inn Express hotel ideally situated in downtown Chicago. Renovated in 2011, the hotel requires little capital investment, operates extremely efficiently, and has a 2015 NOI margin of 28%. With a high historic occupancy and strong potential to increase the average RevPar penetration, the property offers a potential purchaser a strong, stable capital investment with a conservatively projected 12.6% 10-year leveraged IRR.

Key Investment Highlights

Strong Local Partnerships

■ Fee simple real estate in the highly desirable River North entertainment district within the heart of downtown Chicago.

■ While operating nationally, ACHI has been involved in numerous Chicago-area hotel projects, including the Hotel Felix Chicago, Doubletree Chicago North Shore, Jaslin Hotel Chinatown, and the Marriott Naperville.

■ Provides immediate return on equity and is purchased at a 40% discount to replacement value with new construction costs over $400,000 per room. ■ Impressive trailing-12 month through October 2015 RevPAR growth of 12.1% relative to the same-time-last-year. ■ Robust return growth potential as management is projecting year-end 2015 RevPAR to improve 10.1% over 2014 levels and NOI is expected to improve 38.2%. ■ In 2013 a comprehensive renovation included guestroom televisions, HVAC upgrades, exterior building renovations and soft good updates throughout the hotel, which should facilitate enhanced RevPar penetration performance over the near term.

■ American Capital Hotel Investment’s proven track record at the Hotel Cass reflects an ability to operate hotels in downtown Chicago with an NOI margin that is materially higher than the overall market performance. ■ As an active hotel developer and owner, ACHI has strong ties to the local business community which will provide on-theground investment oversight and a likely conduit to future investment opportunities.

■ Offered with an assumable $23.5 million CMBS loan bearing a fixed interest rate of 5.26% maturing in December 2023. 16

Unparalleled Downtown Chicago Location

Strong Lodging Market

■ With 77 distinct neighborhoods, Chicago is one of the nation’s most diverse cities. The Hotel Cass’s River North location is in the epicenter of Chicago’s thriving, nationally acclaimed restaurant and entertainment district. Blocks from one of the most popular retail streets in the world, the “Magnificent Mile” averages 50,000 pedestrians per day and is often compared to New York’s Fifth Avenue, Hong Kong’s Causeway Bay, London’s Bond Street, Beverly Hill’s Rodeo Drive, Paris’ Champs Elysees and Tokyo’s Ginza District.

■ The Hotel Cass is located approximately 16 miles from the world’s busiest O’Hare International Airport, and 12 miles from Midway International Airport, both of which have experienced an increase in enplanements for five consecutive years.

■ As a leading tourist attraction and convention center host, Chicago has seen five consecutive years of growth in annual visitors equaling a CAGR of 6.3% between 2010 and 2014. Home to McCormick Place, the largest convention center in the country attracts over 2 million attendees hosting hundreds of trades shows and conventions. ■ Chicago is the third largest metropolitan area in the country with a population of 9.5 million. The 33 Fortune 500 companies headquartered in Chicago continue to grow the employment base and expand on the 177 million square feet of office space.

■ The downtown Chicago lodging market has demonstrated strong and sustained RevPAR growth, registering a RevPAR Compound Annual Growth Rate (CAGR) of 7.1% between 2009 and 2014. ■ Through year-to-date October 2015, downtown Chicago hotels have registered an impressive 8.3% RevPAR increase over year-to-date September 2014 levels. 17

Hotel Cass | Chicago Downtown Financial Projections Project Parameters / Summary Rooms

Key Investment Metrics 174

Per Room

Total

Cap Rate 5.97%

PIP per Room

$15,000

Purchase Price

241,379

42,000,000

Renovation Contingency (% of PIP)

10.00%

Acquisition Capital

272,118

47,348,500

Acquisition Fee (% of total Cap)

2.66%

Recapitalization

317,327

55,214,910

7.00%

Assumable Loan Cost

1.00%

On Exit

393,164

68,410,482

6.00%

Assumable Loan

$23,500,000

Acquisition Capital Hotel Purchase Price Third Party Reports/Appraisal Franchise Application Fee PIP

$42,000,000 7,500

9.7%

Cash on Cash IRR - 10 yr

11.1%

Comp Set RevPar CAGR

3.47%

Subject Prop RevPar CAGR

3.45%

2,610,000 125,000

Working Capital

250,000

Interest Reserve

525,000

Renovation Contingency

261,000

Assumable Loan Assumption (1%)

235,000

Total Acquisition Capitalization

12.6%

Unleveraged IRR - 10 yr

75,000

Legal

Acquisition Fee

Leveraged IRR - 10 yr

1,260,000 47,348,500

Sources and Uses Total Project Costs

47,348,500

Assumable Loan

23,500,000

Required Equity

23,848,500

Loan-to-Total Capitalization

50%

Hotel Cass | Chicago Downtown Financial Projections Cash Flow & IRR Equity Contributed

Year 0

Cash Flow

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Cash Flow

535,060

1,144,766

1,431,629

1,645,034

1,863,631

1,985,126

2,023,107

2,153,947

2,510,068

2,648,603

(23,848,500)

Cash Flow From Hotel (After debt) Loan Proceeds

(1,934,391)

Proceeds From Refinance or Sale (includes one point in fees)

67,726,322

Less Outstanding Debt Net Cash Flow Available after Debt Service

(16,412,560) (23,428,500)

535,060

1,144,766

1,431,629

1,645,034

1,863,631

1,985,126

2,023,107

2,153,947

575,678

53,962,365

(47,348,500)

2,246,157

2,855,862

3,142,726

3,356,130

3,574,731

3,696,226

3,734,207

3,865,047

3,966,094

71,830,948

6.1%

7.0%

8.0%

8.5%

8.6%

9.2%

10.7%

11.3%

Leveraged IRR - 12.6% Net Cash Flow Available for Debt Unleveraged - 9.7% Cash-On-Cash

Net Cash Flow Available for Debt

Annual RevPar Growth

Cash Flow Projections

2013

2014

2015

YEAR 1

October T-12

Renovation

YEAR 2

YEAR 3

YEAR 4

4.0%

$205.58

4.0%

$212.78

3.5%

$220.22

3.5%

ADR Comp Set ADR Subject Hotel ADR Penetration

$167.90

$175.04

$190.07

$197.67

86.2%

84.3%

81.6%

79.0%

84.0%

85.0%

THE HOTEL CASS | Chicago Downtown

OCCUPANCY Comp Set Occupancy

84.0%

79.6%

77.9%

78.0%

Subject Hotel Occupancy Penetration

101.4%

104.0%

111.4%

110.0%

0.5%

78.50%

0.5%

Comp Set Rev Par - (YOY Change)

$141.04

$139.33

Subject Hotel Rev Par Penetration

87.5%

87.7%

90.9%

86.9%

93.2%

94.4%

$144.79

$147.55

$155.03

$156.16

$172.69

$180.86

$187.19

Occupancy Percentage

85.20%

82.80%

RevPar - (YOY Change)

$123.36

$122.17

54,111

52,586

111.0%

79.0%

0.5%

111.0%

79.50%

0.5%

111.0%

REV PAR -1.2%

$148.06

5.9%

$154.18

4.0%

$161.38

4.5%

$168.09

4.0%

$175.08

4.0%

INCOME Average Daily Rate

Rooms Sold Number Of Rooms Room Revenue Telephone Other Total Revenue

174 $7,834,662

$7,759,105

$477,896

85.80% 9.2%

$8,546,289

$465,424

87.14% -0.4%

$8,509,487

87.69% 11.0%

$9,556,399

$158.60

88.25% 5.1%

55,692

174 94.9%

$1,500 5.2%

$150.47 55,339

174 94.8%

$1,766 5.8%

$133.99 54,492

174 94.2%

$2,570 6.3%

$134.57 55,127

174 93.7%

$3,212 $524,209

86.80% -1.0%

$2,000

$10,072,370

4.0%

56,044

174 94.8%

$165.18

174 94.8%

$2,500

$10,490,884

94.9%

$3,000

$460,000

5.1%

$520,000

5.2%

$550,000

5.2%

$560,000

5.1%

$8,362,083

$8,239,571

$9,013,479

$8,970,987

-0.5%

$10,078,399

11.0%

$10,624,870

5.1%

$11,053,884

3.9%

$43.70

$47.09

$45.87

$46.50

EXPENSES Departmental / POR Rooms Expense Telephone Other

$2,364,752

30.2%

$50,189

$2,476,362

31.9%

$51,136

$2,528,682

29.6%

$58,819

$2,533,858

$47.00 29.8%

$58,000

$2,600,953

$47.50 27.2%

$60,000

$2,645,366.15

$48.00 26.3%

$62,000.00

$2,690,131

25.6%

$64,000

$328,040

62.6%

$283,711

59.4%

$280,255

60.2%

$276,000

60.0%

$312,000

60.0%

$330,000.00

60.0%

$336,000

60.0%

Administrative & General

$592,965

7.1%

$579,635

7.0%

$661,470

7.3%

$654,882

7.3%

$705,487

7.0%

$733,116

6.9%

$762,718

6.9%

Management Fee

$250,985

3.0%

$246,346

3.0%

$270,526

3.0%

$269,129

3.0%

$302,351

3.0%

$318,746

3.0%

$331,616

3.0%

Sales & Marketing

$291,291

3.5%

$285,196

3.5%

$299,616

3.3%

$305,013

3.4%

$342,665

3.4%

$350,620

3.3%

$353,724

3.2%

Undistributed Operating

Franchise

$956,132

12.2%

$905,675

11.7%

$995,010

11.6%

$1,021,138

12.0%

$1,146,767

12.0%

$1,208,684

12.0%

$1,258,906

12.0%

Property Operations & Maintenance

$408,393

4.9%

$427,317

5.2%

$452,167

5.0%

$439,578

4.9%

$453,527

4.5%

$467,494

4.4%

$486,370

4.4%

Utilities

$154,902

1.9%

$194,162

2.4%

$190,753

2.1%

$188,390

2.1%

$211,646

2.1%

$223,122

2.1%

$232,131

2.1%

$2,964,434

35.5%

$2,790,031

33.9%

$3,276,181

36.3%

$3,224,996

35.9%

$3,942,997

39.1%

$4,285,720

40.3%

$4,538,285

41.1%

Taxes

$314,037.00

3.8%

$431,058.00

5.2%

$329,478.00

3.7%

$540,000.00

6.0%

$600,000.00

6.0%

$630,000.00

5.9%

$650,000.00

5.9%

F, F, & E Reserve

$334,483.33

4.0%

$329,582.86

4.0%

$360,539.17

4.0%

$358,839.50

4.0%

$403,135.97

4.0%

$424,994.84

4.0%

$442,155.37

4.0%

$68,082.00

0.8%

$83,064.00

1.0%

$80,640.00

0.9%

$80,000.00

0.9%

$84,000.00

0.8%

$88,000.00

0.8%

$90,000.00

0.8%

Gross Operating Profit Fixed Charges

Insurance TOTAL EXPENSES

$6,114,251

Net Cash Flow Available for Debt

$2,247,831

Debt Service Net Cash Flow After Debt

$6,293,245 26.88%

$1,946,326

$6,507,955 23.62%

$2,505,524

$6,724,831 27.80%

$2,246,156

$7,222,537 25.04%

1,711,096 535,060

$2,855,861

$7,482,145 28.34%

1,711,096 5.96%

1,144,766

$3,142,725

$7,697,754 29.58%

1,711,096 11.36%

1,431,629

$3,356,130

30.36%

1,711,096 13.47%

1,645,034

14.88%

Cash Flow Projections CONTINUED

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

$227.93

3.5%

$234.77

3.0%

$241.81

3.0%

$247.86

2.5%

$254.05

2.5%

$260.40

2.5%

ADR Comp Set ADR Subject Hotel ADR Penetration

85.0%

84.0%

OCCUPANCY Comp Set Occupancy

80.0%

Subject Hotel Occupancy Penetration

111.0%

0.5%

80.0%

0.5%

110.0%

80.0%

0.5%

109.0%

80.0%

0.5%

109.0%

80.0%

0.5%

108.0%

80.0%

0.5%

108.0%

THE HOTEL CASS | Chicago Downtown

REV PAR Comp Set Rev Par - (YOY Change)

$182.34

Subject Hotel Rev Par Penetration

94.4%

4.0%

$187.81 93.5%

2.9%

$193.45 91.6%

2.9%

$198.28 91.6%

2.4%

$203.24 90.7%

2.4%

$208.32 90.7%

$218.74

2.4%

INCOME Average Daily Rate

$193.74

$199.55

$203.12

$208.20

$213.40

Occupancy Percentage

88.80%

88.00%

87.20%

86.40%

RevPar - (YOY Change)

$172.04

Rooms Sold

56,397

Number Of Rooms Room Revenue Telephone Other Total Revenue

4.0%

2.0%

55,889

174 10,926,360

$175.61

3,500

11,152,762

0.9%

55,381

174 95.0%

$177.12

3,500

11,248,998

2.4%

55,381

174 95.0%

$181.55

3,500

11,530,223

86.40% 1.5%

54,873

174 95.0%

$184.38

3,500

11,710,052

2.4%

54,873

174 95.1%

$188.99

174 95.2%

3,500

12,002,803

95.3%

3,500

570,000

5.0%

580,000

4.9%

590,000

5.0%

590,000

4.9%

590,000

4.8%

590,000

4.7%

11,499,860

3.9%

11,736,262

2.0%

11,842,498

0.9%

12,123,723

2.3%

12,303,552

1.5%

12,596,303

2.3%

25.0%

2,738,551

24.6%

2,741,346

24.4%

2,769,036

24.0%

2,771,068

23.7%

2,798,505

EXPENSES Departmental / POR Rooms Expense Telephone Other

$48.50 2,735,249

$49.00

66,000

$49.50

67,000

342,000

60.0%

$50.00

68,000

$50.50

69,000

$51.00

70,000

23.3%

71,000

348,000

60.0%

354,000

60.0%

354,000

60.0%

354,000

60.0%

354,000

60.0%

6.8%

Undistributed Operating Administrative & General

781,990

6.8%

798,066

6.8%

805,290

6.8%

824,413

6.8%

836,642

6.8%

856,549

Management Fee

344,996

3.0%

352,088

3.0%

355,275

3.0%

363,712

3.0%

369,107

3.0%

377,889

3.0%

Sales & Marketing

367,996

3.2%

375,560

3.2%

378,960

3.2%

387,959

3.2%

393,714

3.2%

403,082

3.2%

Franchise

1,311,163

12.0%

1,338,331

12.0%

1,349,880

12.0%

1,383,627

12.0%

1,405,206

12.0%

1,440,336

12.0%

Property Operations & Maintenance

500,244

4.4%

510,527

4.4%

515,149

4.4%

527,382

4.4%

535,204

4.4%

547,939

4.4%

Utilities

241,497

2.1%

246,461

2.1%

248,692

2.1%

254,598

2.1%

258,375

2.1%

264,522

2.1%

4,808,725

41.8%

4,961,676

42.3%

5,025,906

42.4%

5,189,996

42.8%

5,310,236

43.2%

5,482,481

43.5%

Taxes

680,000

5.9%

700,000

6.0%

720,000

6.1%

740,000

6.1%

750,000

6.1%

770,000

6.1%

F, F, & E Reserve

459,994

4.0%

469,450

4.0%

473,700

4.0%

484,949

4.0%

492,142

4.0%

503,852

4.0%

94,000

0.8%

96,000

0.8%

98,000

0.8%

100,000

0.8%

102,000

0.8%

104,000

0.8%

31.08%

3,696,226

31.49%

3,734,207

31.88%

3,966,094

Gross Operating Profit Fixed Charges

Insurance Total Expenses

7,925,129

Net Cash Flow Available for Debt

3,574,731

Debt Service Net Cash Flow After Debt

8,040,036

1,711,096 1,863,634

8,108,291

1,711,096 16.21%

1,985,129

8,258,676 31.53%

1,711,096 16.91%

2,023,110

3,865,047

8,337,457

1,711,096 17.08%

2,153,950

8,491,674 32.24%

1,456,023 17.77%

2,510,072

4,104,629

32.59%

1,456,023 20.40%

2,648,606

21.03%

Hotel Cass | Chicago Downtown Financial Projections 12/30/2015 Loan Recapitialization Hotel Cap Rate Valuation @ Y8

7.00%

Hotel Value @ Y8

55,214,910

LTV

65%

Re-Finance New Loan Amount

$16,967,881

Interest Rate

7.00%

Amortization (Years)

Period

Beginning Balance

Payment

Interest

Principal

Ending Balance

YEAR 9

16,967,881

1,456,023

1,187,752

268,271

16,699,610

YEAR 10

16,699,610

1,456,023

1,168,973

287,050

16,412,560

Period

Beginning Balance

Payment

Interest

Principal

Ending Balance

YEAR 1

23,500,000

1,711,096

1,236,100

474,996

23,025,004

YEAR 2

23,025,004

1,711,096

1,211,115

499,981

22,525,022

YEAR 3

22,525,022

1,711,096

1,184,816

526,280

21,998,742

YEAR 4

21,998,742

1,711,096

1,157,134

553,963

21,444,779

YEAR 5

21,444,779

1,711,096

1,127,995

583,101

20,861,678

YEAR 6

20,861,678

1,711,096

1,097,324

613,772

20,247,906

YEAR 7

20,247,906

1,711,096

1,065,040

646,057

19,601,850

YEAR 8

19,601,850

1,711,096

1,031,057

680,039

18,921,811

Loan Amortization Schedule Assumable Loan Amount

23,500,000

Interest Rate

5.26%

Amortization (Years)

INDUSTRY LEADER

EFFICIENT

STRONG MANAGEMENT

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100

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‘08

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OPENED ON AUGUST 26TH, 2013

CHICAGO, IL

18 WEST JACKSON STREET, CHICAGO, ILLINOIS (corner of Jackson Blvd and State Street) The first Burger King Restaurant developed in the downtown Chicago market in 10 plus years. The restaurant is located in a prime area in the heart of the federal courts and financial district in the downtown area. The location is the home to a number of colleges and educational institutions that makes for a lively and thriving market. The restaurant has been very successful and serves as a â&#x20AC;&#x153;go to spotâ&#x20AC;? for the students and professionals in the area while existing as a part of a diverse dining scene with clubs and night life. Because of its great location it attracts tourist and local people attending the events sponsored in the area. REPH sourced the funding and constructed the restaurant in a three (3) month period creating jobs and tax revenue for the community.

CASE STUDY 06 BURGER KING- SAN ANTONIO, TX

OPENED ON JANUARY 8TH, 2014

SAN ANTONIO, TX

6003 WEST AVENUE SAN ANTONIO, TEXAS REPH in conjunction with a seasoned franchisee, was instrumental in developing its first Burger King restaurant in the San Antonio market. REPH assisted in sourcing the capital and directing the purchase of the land, design, construction and purchase of the equipment. The restaurant was constructed in just four (4) months allowing the restaurant to quickly begin operating and generating a cash flow. The restaurant has been well received and is profitable generating jobs and taxes for the area. As a result, several more have been initiated in various locations throughout the San Antonio market and surrounding suburbs. 29

CASE STUDY 07 BURGER KING- MILWAUKEE, WI

OPENED ON MAY 15TH, 2014

MILWAUKEE, WI

NORTH AVENUE RESTAURANT SERVICES, LLC MILWAUKEE, WISCONSIN EB-5 FUNDED RESTAURANT The North Ave. Burger King Restaurant was developed by REPH and opened on May 15, 2014. The investment for this project totaled One Million Dollars ($1,000,000.00) and funded design, construction, equipment procurement, and provided working capital. The total construction period was only three (3) months allowing the restaurant to open, operate and generate cash flow in a short period.

RETAIL EQUITY PARTNERS HOLDINGS

BURGER KING FRANCHISE LOCATIONS WITHIN THE UNITED STATES

REPH HAS OVER 25 BURGER KING FRANCHISE LOCATIONS THROUGHOUT THE UNITED STATES

American Capital Hotel Investments, LLC We look forward to working with you Michael Brown Managing Member JLM Capital Strategies, Ltd. mbrown@rephchicago.com

Ed Doherty President The Bricton Group edoherty@bricton.com