2017/18 Querencia Annual Report

A N N UA L REPORT 2017/ 18

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ALL ABOUT Family When we say “Querencia Family”--we really mean it. We believe our employees are one of the most beloved assets of our team. Over the past year, we have given the majority of our employees significant salary raises and have implemented a new program which recognizes service and longevity, creating the silver and gold status for employees with us longer than five and ten years. This program not only comes with Querencia’s gratitude and recognition, but also has benefits tied to monetary compensation, school & educational support, as well as some additional medical benefits. We built a brand-new Employee Kitchen and improved our cafeteria, allowing for better food in a more comfortable environment. As we are sure you’ve noticed, we have been featuring various staff members on our Appreciation Wall in the Pro Shop.

Operationally, since new Ownership took place, we increased our Management Team to allow us to be more focused, and targeted leadership to strategic areas of our business.

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Nacho Bancalari has been doing a fantastic job as Club General Manager, since he took over the role a year ago.

On the Food and Beverage side, we brought in Claudia Rosas to lead this department hand-in-hand with Chef Armando.

Sandra Trujillo has been managing our Querencia Property Management and is busy implementing higher service standards for our Owners.

Over the past 12 months, we grew from 250 employees to over 280. We reinforced most of our teams, from golf operations and course maintenance, landscaping, and food and beverage, to general maintenance and security.

View our latest Employee Newsletter here.

"What makes Querencia a true community is our committed team of long term employees and staff."

- BONNIE M c CLOSKE Y

Employee Appreciation Party March 22, 2017 HIGHL IGH T S TRAINING Querencia implemented various different training courses and is providing English classes to over 50 of our employees.

NEW EMPLOYEE KITCHEN One of the most important changes made at the Club, and certainly the most appreciated by our Querencia team. This improvement was vital for the enhanced quality of food

preparation necessary to provide the 200+ meals our team cooks every day to keep our staff healthy and happy.

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Re-inventing Your Querencia Lifestyle

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THE CLUBHOUSE The refresh of our Casa Club is near completion. All new decor, furnishings, fixtures and landscaping have transformed our Clubhouse to a new level of luxury.

La Parrilla. The former Q Bar went through a complete transformation. La Parrilla has become a favorite place for family meals. Its new open kitchen with pizza oven and remodeled bar provide an ambiance of lightness for enjoying a drink or tasting some of Chef Armando’s specialties.

1730 Lounge. Named after the year San Jose del Cabo was founded, 1730 Lounge is located in the old game room and has been transformed into a fun and lively sports lounge. With 5 new HD TVs, “1730” has become the place to get together to watch sporting events, sip tequila, shoot pool and hang out in a comfortable setting environment.

La Galleria. This new multi-purpose room is also available for private group events. The addition of this new space has provided an enhanced use for many of our current activities like bridge, movie nights, group classes, Q Events and HOA meetings.

New Meeting Room. Adjacent to La Galleria, we’ve added a new meeting room available to members and property owners alike. This new room seats 12 people and has A/V capabilities.

The Dining Room. Our main restaurant went through a complete refresh of all furnishings, lighting and decor and was transformed into a gorgeous new casual restaurant option.

La Palapa Pool Grill & Ice Cream Bar. Located at the main pool, our new grill has provided children and adults alike with classic country club offerings with a Mexican twist. A tastefully designed kid's waterslide offers endless fun for families.

The Grotto Bar. This new bar has become a favorite for adults to enjoy cocktails by the pool, watch sports and play ping-pong.

El Cafe. The early morning coffee, juice and smoothie venue is an authentic “coffee shop” with additional healthy ‘grab and go’ offerings. New expresso machines have been added throughout all our venues; Illy Coffee is now Querencia's the coffee of choice.

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Let's hit the trails A complete new biking and hiking trail system was added to the Querencia community in 2018. Grab your mountain bike and ride DirtSurfer, a challenging flow trail that winds from the Clubhouse to the Beach Club, or for hikers and less experienced riders, the Q-Club loop offers scenic, gentle sloping terrain around the beautifully landscaped golf course. Mountain bikes and helmets are available for use at the fitness facility.

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MIL ES OF NE W HIKING & BIKING T R AIL S

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700+

VER T IC AL FEE T TO CL IMB AND DESCEND

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DAYS YOU C AN ENJOY QUERENCIA'S OU T DOOR PURSUI T S

The Fazio Course Querencia is committed to your golf experience.

A multi-million dollar renovation of our Fazio Championship course has been underway for your enjoyment in the 2018 / 2019 season.

$2M

Invested over the last 12 months through the purchasing of new maintenance equipment, acquiring the gypsum injector, and the continued oversight of the design and improved landscaping of the course surroundings.

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Holes have been renovated this summer with new fairway turf, not only to improve turf conditions, but also to test the Bermuda 328 grass during the winter months.

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Hole has received extensive repairs and design improvements badly damaged by Hurricane Lidia.

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Brand new Club Cart golf carts arrive mid October.

The fleet will provide Members with a GPS system and new comfort while riding on the course. We are the first golf course to introduce the brand new Club Cart model to Los Cabos.

“We couldn’t be more excited to watch the renovation process take place over the summer months. As a Club, we strive to continually improve our amenities and this project reflects our commitment to always make sure our Members and guests enjoy one of the finest golf experiences in Mexico.”

SE T H WESQTC AFAL B O.COLM, HE AD GOL A N N UF A L PROFESSIONAL REPORT 07

Enriching the Lives of Members & Families

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"Querencia is a place where family and friends can experience the best of Baja."

RYAN EL S TON, PAR T NER

Q Club Travel. Featuring a series of excursions for those who want to explore Baja's local treasures, as well as mainland Mexico in 5-star comfort, but don’t want to do so alone. Last season's trips to Mexico City and Valle de Guadalupe were just a taste of what is to come. This year we plan to visit the colonial City of Puebla, where the “5 de Mayo” battle took place, beautiful San Miguel de Allende and a train trek through the famous “Copper Canyon”.

NEW MEMBERSHIP PROGRAMS Querencia is all about family! Last year we introduced new membership programs with a unique multi-generational component inviting your extended family to enjoy Querencia together with you. These new programs were well received, and as of today, over 120 Members have transitioned into the Vertical program.

QUERENCIA'S SOCIAL LIFESTYLE Querencia was designed to strengthen connections between family members of every age. Our Social Director, Alejandra Marentes, has been very busy creating and coordinating an exciting social life here at Querencia for all generations. The following programs have now become an important part of the Q experience:

Events Series. Each special event sets out to elevate our club conversation with meaningful topics and offers evenings of intellectual dialogue with a fun and engaging group setting.

Sunset Sessions at the Beach Club. Every Wednesday, Members and their guests enjoy a sunset happy hour at the Club's favorite venue.

Featuring cocktails (margarita's of course), live music and passed hors d'oeuvres - it is a great way to build camaraderie and strengthen friendships within our special club community.

Movie & Theatre Nights. A must at Q. Last year we screened over 15 films, including a golf cart drive-in night under the stars at the driving range. We also hosted our first theatrical play at Querencia.

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Meet Querencia's Real Estate Team RYAN EL S TON President of Real Estate Having worked in the real estate industry for more than a decade, Ryan Elston, Partner and President of Real Estate at Querencia, has a proven track record in real estate development across national and international markets. In addition to his role at Querencia, Mr. Elston is a licensed broker and Partner with Aspen Associates Realty where he represents some of the nations wealthiest and most descerning buyers and sellers in decisions regarding their personal residences.

Ryan enjoys EVERYTHING Querencia has to offer - most recently he can be found on our new Dirt Surfer mountain bike trail.

BIANC A DE L A ROSA Office Manager Bianca plays an integral role at Querencia Real Estate by assisting the QRE Team with buyer's and seller's needs seamlessly throughout the sales process.

Bianca enjoys spending time with her new born and son.

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"We are a team dedicated to our community. With in-depth market knowledge, attention to detail, and a relentless commitment to success, we are Querencia's top resource when looking at your next investment "

L AUREN SAL ZER Director of Sales & Marketing With over 15 years of sales and marketing experience in the luxury real estate industry, most recently with Montage Residences Kapalua Bay and Timbers Resorts Kauai, Lauren is passionate about Querencia's success. Lauren oversees sales efforts, marketing strategy and outreach.

Lauren is attempting to learn to kite surf in Las Barriles.

RUBEN VARGA S Sales Executive

ANTHONY SOLIER Sales Executive

WENDY TE JEDA Q Living Specialist

A fixture at QRE for over six years, Ruben continues to offer exemplary service with extensive market knowledge, intimate community insight and a relentless commitment to success. His proven track record has built credibility and trust with all the Members he has worked with to-date.

A longtime local and premier Sales Agent Anthony joined us after working with the Esperanza Residences.

Teamwork, resilience, empathy, proactivity and perfection are Wendy's strengths.

She ensures each and every guest stay is comfortable from start to finish.

An accomplished golfer, Ruben enjoys playing Querencia's 18 hole Fazio course.

Most mornings, Anthony can be found catching waves at "The Rock" surfbreak, right in front of Querencia's Beach Club, before getting into the office.

Wendy loves to relax Saturday afternoons at Buena Vista Beach.

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NEW REAL ESTATE OFFERINGS AND DEVELOPER UPDATES Since August 2017, we have made significant investments to the Real Estate Development side of our business, from putting two new beachfront parcels under contract, to the construction of over 20 new residences, and from new office space, to the Club Residences for prospective owners. We now have over $20 million dollars in readily available new inventory for sale. Below you’ll find some of the most important related initiatives: Expanded Beachfront Presence. Possibly the most important investment made by the new Ownership yet, is the addition of two new parcels immediately adjacent to our existing Beach Club. We recently put these parcels under contract and expect to close on the acquisition in the first half of 2019. This strategic addition is resetting our Beach Club and Beach Condo plans.

Understanding the related delay in permitting and redesign may be disappointing to some, it will be worthwhile for the long term enjoyment and success of Querencia.

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Laderas. This new 16 single family neighborhood is now a reality. It incorporates some significant design changes and the latest trends and design elements. Ranging in price from $2.6 to $3.6 Million, The Laderas are strategically located between our Beach Club and the Main Club house providing a balanced location. Since last year, we started the construction of 4 of these units and today we are very pleased to announce we already have a proud full-time Property Owner in Laderas 4.

Cañadas. We started construction of the last 3 homes within the successful 16 home Cañadas section. These new homes range in price from $2.2 to $3.2 million dollars, have fantastic ocean views towards San Jose and will incorporate some of the new trends in high-end quality and finish selections. The completion of these homes will make the Cañadas another fully completed developed section within Querencia.

Verandas. We recently broke ground on the next phase of our Verandas Condominium project scheduled for completion Winter 2019/2020.

The construction of the Verandas pool and common area is also part of the activity, bringing the Verandas project to its full completion as originally conceived. This new 7 unit building will be offering condominiums priced from $1.6 to $3.2 million dollars. We are also pleased to announce that the first unit is already under contract.

Club Residences. 9 ultra high-end suites in three separate structures are being built across Querencia Boulevard from the Club. These new residences will be available for Members, Resident guests, and prospective buyers to use based on availability. We expect to have these fantastic residences ready for your stay in the first quarter of 2019.

New Ways To Call Q Home Master Plan. Over the past few months we have been working with the Fazio organization and internationally acclaimed land planning firm Design Workshop on the next phase of our Master Plan. We are a few weeks from announcing the specifics of the first phase of this plan, but as a sneak preview, it is a new neighborhood primarily focused on homesites closer to the Club Village adjacent to a spectacular new club park. In addition to this future release, Design Workshop is helping us with the completion of the Querencia Master Plan.

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A community who gives back

Los Cabos Children’s Foundation

Giving back to our surrounding communities in the Baja is an integral part of Querencia living.

Our Querencia community has a history of facilitating residents’ active participation in local charitable efforts. These were most notable after hurricane Odile in September 2014, when many of our staff lost their homes. The management group reacted quickly and funded Querencia Family Relief Fund, to which all of the Members generously contributed to and raised over $750,000 in just two days. With these funds Querencia quickly helped rebuild homes for our team members who were left without the roof over their heads.

Having a roof over one’s head is one of the essential life necessities. That’s why Querencia Members, Javier Mazoy from Mexico City, and Willy Jordan from Hinsdale, are involved in Casa Hogar, a home for more than 60 orphaned or abandoned children. Casa Hogar is the first officially certified orphan house in the country, and their primary goal is to integrate them back into society so that they can have the best life possible. (https://www.aporta.org.mx/casahogarcabo) Another organization we support, is Los Cabos Children’s Foundation (LCCF), which provides medical, educational, and humanitarian assistance to children, their families, and supporting organizations of the Los Cabos Area. They are partners with St. Jude’s Children Research Hospital and have so far treated more than 40 children with cancer and heart surgeries. The primary financial driver for LCCF is the annual Fred Duckett Challenge, hosted by Querencia. This one-day golf event on average raises $1.5M annually. In addition, Querencia pledged $250,000 to the LCCF this year.

And finally, one of Querencia's long-standing events is the Cabo Collegiate, an annual college golf tournament organized by Barbara Ann Hynes. The tournament is an opportunity for young college students to experience the Club and Los Cabos, learn invaluable tips from Querencia’s Golf Pros, play the course, and aspire to great things. Querencia members welcome the participants with open hands by hosting players in their homes during the tournament.

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As you will see, the past twelve months have been extremely busy here at Querencia. Community morale is high, and positive energy remains consistent as we head into the 2018-19 Season. We are working hard to improve every aspect of your club experience and hope you and your family will enjoy all the club amenities and improvements we have in store for you.

TOM M c CLOSKE Y

JORGE C ARRER A

RYAN EL S TON

CHAIRMAN

CEO

PAR T NER

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