HVS Feasibility Study - FINAL - 02 13 20

FEASIBILITY STUDY
Pr
opos
ed
Hot
el
Uni
ver
sit
y Ci
ty
UNIVERSITY CITY, MISSOURI
SUBMITTED TO: PR OPOSED PREPARED BY:

Ms. Libbey Tucker HVS Consulting & Valuation
City of University City Missouri Division of TS Worldwide, LLC
6801 Delmar Boulevard 8134 Big Bend Boulevard
University City, Missouri 63130 Webster Groves, Missouri 63119
+1 (314) 505-8533 +1 (970) 215-0620
January-2020
February 13, 2020
Ms. Libbey Tucker

City of University City Missouri
6801 Delmar Boulevard
University City, Missouri 63130
HVS ST. LOUIS

Re: Proposed Hotel University City
8134 Big Bend Boulevard
University City, Missouri
Webster Groves, Missouri 63119
+1 (970) 215-0620 HVS Reference: 2019021933
+1 (516) 742-3059 FAX
www.hvs.com
Dear Ms. Tucker:
Pursuant to your request, we herewith submit our feasibility study pertaining to the
above-captioned property. We have inspected the real estate and analyzed the hotel
market conditions in the University City, Missouri, area. We have studied the
proposed project, and the results of our fieldwork and analysis are presented in this
report. We have also reviewed the proposed improvements for this site. Our report
was prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP), as provided by the Appraisal Foundation.
We hereby certify that we have no undisclosed interest in the property, and our
employment and compensation are not contingent upon our findings. This study is
subject to the comments made throughout this report and to all assumptions and
limiting conditions set forth herein.
Sincerely,
TS Worldwide, LLC
Daniel P. McCoy, MAI, Managing Director, Senior Partner

DMcCoy@hvs.com, +1 (970) 215-0620
State Appraiser License (MO) 2010001717
Superior results through unrivaled

hospitality intelligence. Everywhere.
Table of Contents
SECTION TITLE PAGE

1. Executive Summary 1
Franchise and Management 1
Assumptions 1
Summary of Hotel Market Trends 2
Summary of Forecast Occupancy and Average Rate 7
Summary of Forecast Income and Expense Statement 7
Feasibility Conclusion 10
2. Recommendation of the Site and Neighborhood 13
Access and Visibility 17
Airport and Metrorail Access 18
Neighborhood 18
Zoning 19
3. Market Area Analysis 21
Workforce Characteristics 24
Radial Demographic Snapshot 28
Unemployment Statistics 30
Major Business and Industry 31
Office Space Statistics 31
Convention Activity 34
Airport Traffic 36
Tourist Attractions 38
4. Supply and Demand Analysis 40
National Trends Overview 40
St. Louis, MO - IL Lodging Market 44
Definition of Subject Hotel Market 46
Historical Supply and Demand Data 46
Seasonality 49
Patterns of Demand 54
Primary Competition 61
Secondary Competitors 71
Supply Changes 73
Demand Analysis Using Market Segmentation 75
Base Demand Growth Rates 78
Latent Demand 78
Accommodated Demand and Market-wide Occupancy 80
5. Description of the Proposed Improvements 82
Project Overview 82
Site Improvements and Hotel Structure 83
Public Areas 83
Guestrooms 83
Conclusion 84
6. Projection of Occupancy and Average Rate 85
Historical Penetration Rates by Market Segment 85
Forecast of Subject Property’s Occupancy 86
Average Rate Analysis 89
Competitive Position 89
7. Projection of Income and Expense 94
Comparable Operating Statements 94
Forecast of Revenue and Expense 98
Rooms Revenue 101
Food and Beverage Revenue 101
Other Operated Departments Revenue 101
Miscellaneous Income 102
Rooms Expense 102
Food and Beverage Expense 103
Other Operated Departments Expense 103
Administrative and General Expense 104
Information and Telecommunications Systems Expense 104
Marketing Expense 104
Franchise Fee 105
Property Operations and Maintenance 105
Utilities Expense 106
Management Fee 106
Property Taxes 107
Insurance Expense 110
Reserve for Replacement 111
Forecast of Revenue and Expense Conclusion 112
8. Feasibility Analysis 113
Construction Cost Estimate 113
Development Cost 113
Soft Costs 116
Developer’s Fee 117
Land Allocation 118
Mortgage Component 121
Equity Component 123
Terminal Capitalization Rate 126
Mortgage-Equity Method 128
Conclusion 130
9. Statement of Assumptions and Limiting Conditions 132
10. Certification 135
Addenda
Qualifications
Copy of Appraisal License(s)
1. Executive Summary
Subject of the University City is centrally located within the greater Saint Louis metro area. The
Feasibility Study city is proximate to key institutions, business centers, tourist attractions, and
transportation networks for the region; however, the city lacks any hotels and is
primarily served by hotels in adjacent cities.
A specific site for the proposed hotel had yet to be determined at the time of this
study. We have identified and evaluated four potential hotel locations around
University City. We have ranked these locations based on four criteria relating to
access, proximity to demand generators, and neighborhood attributes. Based on
these rankings, location #3 on the southern side of University City, at the
intersection of Forest Park Parkway and Forsyth Boulevard, was deemed the most
attractive and supportive for potential hotel development. This location benefits
from its proximity to ample commercial and leisure demand generators, with
excellent transportation access and a supportive neighborhood. These attributes
make this location ideal for the development of a select-service lodging facility;
however, we note that we have not investigated the availability of specific
development sites within the scope of this study.
Pertinent Dates The effective date of the report is January 28, 2020.
Franchise and We assume that the proposed hotel will be managed by a professional management
Management company that is experienced in the operation of select-service hotels in this region.
Assumptions The management team had not been selected as of the date of this study; therefore,
details pertaining to management terms had yet to be determined. Our projections
reflect a total management fee of 3.0% of total revenues in our study.
We recommend that the proposed subject hotel operate as an upscale, select-service

property. We have placed heavy consideration on the following brands: Hilton
Garden Inn, AC Hotels by Marriott, Aloft Hotels, Even Hotels, Hyatt Place, Radisson
Red, and Cambria Inn & Suites. Although a specific franchise affiliation and/or brand
has yet to be finalized, based upon a review of several published franchise fees for
brands that fall within the recommended product tier, we have selected a total
franchise fee of 8.5% of rooms revenue in order to estimate the cost of a national
franchise. Based on our review of the agreement’s terms or expected terms, the
Hyatt Place franchise is reflected in our forecasts with a royalty fee of 5.5% of rooms
revenue, and a marketing assessment of 3% of rooms revenue.
January-2020 Executive Summary

Proposed Hotel University City – University City, Missouri 1
Summary of Hotel The following table provides a historical perspective on the supply and demand
Market Trends trends for a selected set of hotels in the competitive submarket, as provided by STR.
STR is an independent research firm that compiles and publishes data on the lodging
industry, and this information is routinely used by typical hotel buyers. In the
following table, RevPAR is calculated by multiplying occupancy by average rate and
provides an indication of how well rooms revenue is being maximized.

FIGURE 1-1 HISTORICAL SUPPLY AND DEMAND TRENDS (STR)
Average Daily Available Occupied Average

Year Room Count Room Nights Change Room Nights Change Occupancy Rate Change RevPAR Change
2009 2,196 801,477 — 447,648 — 55.9 % $122.28 — $68.30 —

2010 2,296 838,070 4.6 % 526,466 17.6 % 62.8 120.83 (1.2) % 75.91 11.1 %
2011 2,266 827,189 (1.3) 535,231 1.7 64.7 128.70 6.5 83.27 9.7
2012 2,329 850,085 2.8 571,090 6.7 67.2 130.34 1.3 87.56 5.1
2013 2,380 868,700 2.2 598,628 4.8 68.9 134.20 3.0 92.48 5.6
2014 2,480 905,364 4.2 635,217 6.1 70.2 140.82 4.9 98.80 6.8
2015 2,749 1,003,544 10.8 718,430 13.1 71.6 144.16 2.4 103.21 4.5
2016 2,802 1,022,730 1.9 724,876 0.9 70.9 148.66 3.1 105.37 2.1
2017 2,801 1,022,546 (0.0) 734,001 1.3 71.8 151.62 2.0 108.83 3.3
2018 2,801 1,022,365 (0.0) 760,131 3.6 74.4 152.66 0.7 113.51 4.3
Year-to-Date Through September
2018 2,801 764,673 — 578,967 — 75.7 % $153.27 — $116.05 —
2019 2,848 777,372 1.7 % 567,265 (2.0) % 73.0 154.18 0.6 % 112.51 (3.0) %
Average Annual Compounded Change:

2009 - 2012 2.0 % 8.5 % 2.1 % 8.6 %
2012 - 2018 3.1 4.9 2.7 4.4
Competitive Number Year Year

Hotels Included in Sample Class Status of Rooms Affiliated Opened
Royal Sonesta Chase Park Plaza St Louis Upscale Class Secondary 389 Jun 2017 Jun 1922
Seven Gables Inn Upper Upscale Class Secondary 32 Jul 1926 Jul 1926
Holiday Inn Express St Louis Central West End Upper Midscale Class Secondary 127 Oct 2014 Jun 1958
Hampton by Hilton Inn & Suites Clayton/St Louis-Galleria Area Upper Midscale Class Primary 106 Aug 2014 Jun 1964
Sheraton Hotel Clayton Plaza St Louis Upper Upscale Class Secondary 259 Aug 1999 Jun 1964
Cheshire Inn Upper Upscale Class Secondary 108 Aug 2011 Jun 1964
Hilton St Louis Frontenac Upper Upscale Class Secondary 263 Mar 1993 Jun 1970
Residence Inn St Louis Galleria Upscale Class Secondary 152 Aug 1986 Aug 1986
Ritz-Carlton St Louis Luxury Class Secondary 299 Apr 1990 Apr 1990
Parkway Hotel Upper Upscale Class Secondary 217 Nov 2003 Nov 2003
Hampton Inn St Louis @ Forest Park Upper Midscale Class Secondary 126 May 2006 May 2006
SpringHill Suites St Louis Brentwood Upscale Class Primary 123 Aug 2008 Aug 2008
Moonrise Hotel Luxury Class Secondary 125 Apr 2009 Apr 2009
Homewood Suites by Hilton St Louis Galleria Upscale Class Secondary 158 Jul 2009 Jul 2009
Drury Inn & Suites St Louis Brentwood Upper Midscale Class Primary 210 Aug 2014 Aug 2014
Home2 Suites by Hilton St Louis Forest Park Upper Midscale Class Secondary 106 Jul 2015 Jul 2015
Courtyard St Louis Brentwood Upscale Class Primary 141 Jul 2019 Jul 2019
Total 2,941

During the illustrated historical period, occupancy followed a strengthening trend
from 2009 through 2015 and then remained relatively stable in 2016 and 2017.
Occupancy grew again in 2018, reaching an all-time high. Meanwhile, aside from a
modest decline in 2010, both average rate and RevPAR increased steadily during
this same time period. This improvement in market conditions was driven largely
by a strong recovery from the national recession, followed by economic expansion
and development throughout the greater Saint Louis area. Additionally, market
performance was bolstered by a record volume of meeting and group demand at the
America's Center Convention Complex in 2016 and 2017. Year-to-date 2019 data
illustrate a softening in occupancy, yet a roughly $1 increase in average rate. The
decline in RevPAR for 2019 reflects the impact of supply additions throughout the
greater market, as well as renovation disruptions at multiple competitive
properties. The near-term outlook is cautiously optimistic given the significant
number of new hotel rooms that have recently opened or are under construction.
However, the growing presence of strong economic anchors in this central Saint
Louis submarket should help bolster demand in the near term.
The following tables reflect our estimates of operating data for hotels on an
individual basis. These trends are presented in detail in the Supply and Demand
Analysis chapter of this report.

FIGURE 1-2 PRIMARY COMPETITORS – OPERATING PERFORMANCE
Est. Segmentation Estimated 2018 Estimated 2019
roup
nd G
Weighted Weighted
l
erc ia
ing a
Annual Annual
re
Comm
Number of Room Room Occupancy Yield
M ee t
L ei su
Property Rooms Count Occ. Average Rate RevPAR Count Occ. Average Rate RevPAR Penetration Penetration
Hampton Inn and Sui tes

Cla yton Saint Louis Gal leria 106 65 % 10 % 25 % 106 70 - 75 % $150 - $160 $115 - $120 106 75 - 80 % $150 - $160 $115 - $120 100 - 110 % 110 - 120 %
Area
Courtyard by Marriott St Louis
141 70 10 20 0 — — — 71 55 - 60 150 - 160 90 - 95 80 - 85 85 - 90
Brentwood
Drury Inn & Sui tes Sa int Louis
210 40 35 25 210 75 - 80 130 - 140 105 - 110 210 75 - 80 130 - 140 105 - 110 100 - 110 100 - 110
Brentwood
SpringHill Sui tes by Marriott St
123 65 5 30 123 80 - 85 130 - 140 110 - 115 123 75 - 80 140 - 150 105 - 110 100 - 110 100 - 110
Louis Brentwood
Sub-Totals/Averages 580 55 % 19 % 26 % 439 79.6 % $140.42 $111.82 510 75.3 % $143.36 $108 $105 % 101.6 %
Secondary Competitors 2,603 42 % 30 % 28 % 1,610 72.4 % $149.80 $108.42 1,565 70.2 % $150.58 $106 $98 % 99.5 %
Totals/Averages 3,183 45 % 27 % 27 % 2,049 73.9 % $147.63 $109.15 2,075 71.4 % $148.71 $106 $100 % 100.0 %
* Specific occupancy and average rate data were utilized in our analysis, but are presented in ranges in the above table for the purposes of confidentiality.

FIGURE 1-3 SECONDARY COMPETITORS – OPERATING PERFORMANCE
roup
nd G
Weighted Weighted
ia l
ting a
merc
Total Annual Annual
re
Number of Competitive Room Room
L eisu
C om
M ee
Property Rooms Level Count Occ. Average Rate RevPAR Count Occ. Average Rate RevPAR
Moonri s e Hote l Sa i nt Loui s 125 40 % 20 % 40 % 70 % 88 60 - 65 % $150 - $160 $100 - $105 88 65 - 70 % $160 - $170 $110 - $115
Seve n Ga bl e s I nn Sa i nt
32 50 10 40 70 22 50 - 55 140 - 150 75 - 80 22 55 - 60 150 - 160 90 - 95
Loui s
Ri tz Ca rl ton Sa i nt Loui s 299 45 35 20 60 179 70 - 75 250 - 260 180 - 190 179 70 - 75 250 - 260 180 - 190
Cl a yton Pl a za 242 30 40 30 60 145 60 - 65 105 - 110 65 - 70 145 60 - 65 105 - 110 65 - 70
She ra ton Cl a yton Pl a za

259 45 35 20 70 181 60 - 65 125 - 130 80 - 85 136 50 - 55 125 - 130 65 - 70
Sa i nt Loui s
Home wood Sui te s by

158 60 15 25 70 111 75 - 80 140 - 150 115 - 120 111 80 - 85 140 - 150 115 - 120
Hi l ton St. Loui s Ga l l e ri a
Che s hi re Inn & Lodge 108 50 20 30 60 65 65 - 70 140 - 150 95 - 100 65 65 - 70 140 - 150 95 - 100
Ha mpton Inn & Sui tes

126 65 10 25 70 88 80 - 85 140 - 150 125 - 130 88 75 - 80 140 - 150 115 - 120
Sa i nt Loui s Fore s t Pa rk
Re s i de nce I nn by Ma rri ott

152 70 10 20 70 106 75 - 80 130 - 140 100 - 105 106 70 - 75 125 - 130 95 - 100
St Loui s Ga l l e ri a
Cha s e Pa rk Pl a za a Roya l
389 30 50 20 50 195 70 - 75 160 - 170 125 - 130 195 70 - 75 170 - 180 120 - 125
Sone s ta Hote l
Hol i da y Inn Expres s Sa i nt
127 25 40 35 70 89 65 - 70 105 - 110 70 - 75 89 60 - 65 105 - 110 65 - 70
Loui s Ce ntra l We s t End
Pa rkwa y Hote l 217 35 10 55 60 130 70 - 75 125 - 130 90 - 95 130 65 - 70 125 - 130 85 - 90
Home 2 Sui te s by Hi l ton

106 55 5 40 50 53 80 - 85 125 - 130 105 - 110 53 80 - 85 130 - 140 105 - 110
Sa i nt Loui s Fore s t Pa rk
Hi l ton Sa i nt Loui s
263 20 60 20 60 158 70 - 75 130 - 140 95 - 100 158 70 - 75 130 - 140 90 - 95
Fronte na c
Totals/Averages 2,603 42 % 30 % 28 % 62 % 1,610 72.4 % $149.80 $108.42 1,565 70.2 % $150.58 $105.65
* Specific occupancy and average rate data was utilized in our analysis, but is presented in ranges in the above table for the purposes of confidentiality.

Summary of Forecast Based on our analysis presented in the Projection of Occupancy and Average Rate
Occupancy and chapter, we have chosen to use a stabilized occupancy level of 76% and a base-year
Average Rate rate position of $155.00 for the proposed subject hotel. The following table reflects
a summary of our proposed subject hotel occupancy and average rate (ADR)
projections.
FIGURE 1-4 OCCUPANCYAND ADR FORECAST –PROPOSED SUBJECT PROPERTY
Occupancy Average Rate RevPAR

Year Total % Change Total % Change Total % Change
2022 66.0 % — $158.05 — $104.31 —

2023 74.0 12.1 % 163.66 3.5 % 121.11 16.1 %
Sta bi l i zed 76.0 2.7 170.27 4.0 129.40 6.9
2025 76.0 0.0 175.38 3.0 133.29 3.0
2026 76.0 0.0 180.64 3.0 137.29 3.0
Summary of Forecast Our positioning of each revenue and expense level is supported by comparable
Income and Expense operations or trends specific to this market. Our forecast of income and expense is
Statement presented in the following table.

FIGURE 1-5 DETAILED FORECAST OF INCOME AND EXPENSE
2022 (Calendar Year) 2023 Stabilized 2025 2026

Number of Rooms: 165 165 165 165 165
Occupancy: 66% 74% 76% 76% 76%
Average Rate: $158.05 $163.66 $170.27 $175.38 $180.64
RevPAR: $104.31 $121.11 $129.40 $133.29 $137.29
Days Open: 365 365 365 365 365
Occupied Rooms: 39,749 %Gross PAR POR 44,567 %Gross PAR POR 45,771 %Gross PAR POR 45,771 %Gross PAR POR 45,771 %Gross PAR POR
OPERATING REVENUE
Rooms $6,282 86.7 % $38,073 $158.04 $7,294 87.4 % $44,206 $163.67 $7,793 87.6 % $47,230 $170.26 $8,027 87.6 % $48,648 $175.37 $8,268 87.6 % $50,109 $180.64
Food & Beverage 580 8.0 3,517 14.60 650 7.8 3,940 14.59 683 7.7 4,140 14.92 704 7.7 4,264 15.37 725 7.7 4,392 15.83
Other Operated Departments 357 4.9 2,163 8.98 380 4.5 2,301 8.52 394 4.4 2,389 8.61 406 4.4 2,460 8.87 418 4.4 2,534 9.13
Miscellaneous Income 24 0.3 144 0.60 25 0.3 153 0.57 26 0.3 159 0.57 27 0.3 164 0.59 28 0.3 169 0.61
Total Operating Revenues 7,243 100.0 43,897 182.22 8,349 100.0 50,600 187.34 8,896 100.0 53,918 194.37 9,164 100.0 55,537 200.21 9,439 100.0 57,204 206.22
DEPARTMENTAL EXPENSES *
Rooms 1,427 22.7 8,647 35.89 1,535 21.0 9,302 34.44 1,598 20.5 9,683 34.91 1,646 20.5 9,973 35.95 1,695 20.5 10,272 37.03
Food & Beverage 461 79.5 2,797 11.61 493 75.8 2,988 11.06 512 75.0 3,105 11.19 528 75.0 3,198 11.53 544 75.0 3,294 11.88
Total Expenses 2,072 28.6 12,556 52.12 2,219 26.6 13,446 49.78 2,307 25.9 13,982 50.40 2,376 25.9 14,401 51.92 2,448 25.9 14,834 53.47
DEPARTMENTAL INCOME 5,171 71.4 31,341 130.10 6,130 73.4 37,154 137.56 6,589 74.1 39,936 143.97 6,787 74.1 41,135 148.29 6,991 74.1 42,371 152.74
UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 604 8.3 3,658 15.19 638 7.6 3,869 14.32 663 7.5 4,018 14.48 683 7.5 4,139 14.92 703 7.5 4,263 15.37
Info & Telecom Systems 86 1.2 523 2.17 91 1.1 553 2.05 95 1.1 574 2.07 98 1.1 591 2.13 100 1.1 609 2.20
Marketing 379 5.2 2,300 9.55 365 4.4 2,211 8.18 379 4.3 2,296 8.28 390 4.3 2,365 8.53 402 4.3 2,436 8.78
Franchise Fee 534 7.4 3,236 13.43 620 7.4 3,758 13.91 662 7.4 4,015 14.47 682 7.4 4,135 14.91 703 7.4 4,259 15.35
Prop. Operations & Maint. 259 3.6 1,568 6.51 328 3.9 1,990 7.37 379 4.3 2,296 8.28 390 4.3 2,365 8.53 402 4.3 2,436 8.78
Utilities 224 3.1 1,359 5.64 237 2.8 1,437 5.32 246 2.8 1,492 5.38 254 2.8 1,537 5.54 261 2.8 1,583 5.71
Total Expenses 2,086 28.8 12,644 52.48 2,280 27.2 13,816 51.15 2,424 27.4 14,691 52.96 2,497 27.4 15,132 54.55 2,572 27.4 15,586 56.19
GROSS HOUSE PROFIT 3,085 42.6 18,697 77.62 3,851 46.2 23,338 86.41 4,165 46.7 25,245 91.01 4,291 46.7 26,003 93.74 4,419 46.7 26,784 96.56
Management Fee 217 3.0 1,317 5.47 250 3.0 1,518 5.62 267 3.0 1,618 5.83 275 3.0 1,666 6.01 283 3.0 1,716 6.19
INCOME BEFORE NON-OPR. INC. & EXP. 2,868 39.6 17,381 72.15 3,600 43.2 21,820 80.79 3,899 43.7 23,627 85.17 4,016 43.7 24,337 87.73 4,136 43.7 25,068 90.37
NON-OPERATING INCOME & EXPENSE
Property Taxes 613 8.5 3,713 15.41 631 7.6 3,824 14.16 650 7.3 3,939 14.20 669 7.3 4,057 14.62 689 7.3 4,178 15.06
Insurance 80 1.1 487 2.02 83 1.0 502 1.86 85 1.0 517 1.86 88 1.0 532 1.92 90 1.0 548 1.98
Reserve for Replacement 145 2.0 878 3.64 250 3.0 1,518 5.62 356 4.0 2,157 7.77 367 4.0 2,221 8.01 378 4.0 2,288 8.25
Total Expenses 838 11.6 5,077 21.08 964 11.6 5,843 21.63 1,091 12.3 6,612 23.84 1,124 12.3 6,810 24.55 1,157 12.3 7,015 25.29
EBITDA LESS RESERVE $2,030 28.0 % $12,303 $51.07 $2,636 31.6 % $15,977 $59.15 $2,808 31.4 % $17,015 $61.34 $2,892 31.4 % $17,527 $63.18 $2,979 31.4 % $18,054 $65.08
*Departmental expenses are expressed as a percentage of departmental revenues.

FIGURE 1-6 TEN-YEAR FORECAST OF INCOME AND EXPENSE
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Number of Rooms: 165 165 165 165 165 165 165 165 165 165
Occupied Rooms: 39,749 44,567 45,771 45,771 45,771 45,771 45,771 45,771 45,771 45,771
Occupancy: 66% 74% 76% 76% 76% 76% 76% 76% 76% 76%
Average Rate: $158.05 % of $163.66 % of $170.27 % of $175.38 % of $180.64 % of $186.06 % of $191.64 % of $197.39 % of $203.31 % of $209.41 % of
RevPAR: $104.31 Gross $121.11 Gross $129.40 Gross $133.29 Gross $137.29 Gross $141.40 Gross $145.65 Gross $150.02 Gross $154.52 Gross $159.15 Gross
OPERATING REVENUE
Rooms $6,282 86.7 % $7,294 87.4 % $7,793 87.6 % $8,027 87.6 % $8,268 87.6 % $8,516 87.6 % $8,772 87.6 % $9,035 87.6 % $9,306 87.6 % $9,585 87.6 %
Food & Beverage 580 8.0 650 7.8 683 7.7 704 7.7 725 7.7 746 7.7 769 7.7 792 7.7 816 7.7 840 7.7
Other Operated Departments 357 4.9 380 4.5 394 4.4 406 4.4 418 4.4 431 4.4 444 4.4 457 4.4 471 4.4 485 4.4
Rooms 1,427 22.7 1,535 21.0 1,598 20.5 1,646 20.5 1,695 20.5 1,746 20.5 1,798 20.5 1,852 20.5 1,908 20.5 1,965 20.5
Food & Beverage 461 79.5 493 75.8 512 75.0 528 75.0 544 75.0 560 75.0 577 75.0 594 75.0 612 75.0 630 75.0
Total Expenses 2,072 28.6 2,219 26.6 2,307 25.9 2,376 25.9 2,448 25.9 2,521 25.9 2,597 25.9 2,674 25.9 2,755 25.9 2,837 25.9
Administrative & General 604 8.3 638 7.6 663 7.5 683 7.5 703 7.5 724 7.5 746 7.5 769 7.5 792 7.5 815 7.5
Marketing 379 5.2 365 4.4 379 4.3 390 4.3 402 4.3 414 4.3 426 4.3 439 4.3 452 4.3 466 4.3
Franchise Fee 534 7.4 620 7.4 662 7.4 682 7.4 703 7.4 724 7.4 746 7.4 768 7.4 791 7.4 815 7.4
Prop. Operations & Maint. 259 3.6 328 3.9 379 4.3 390 4.3 402 4.3 414 4.3 426 4.3 439 4.3 452 4.3 466 4.3
Utilities 224 3.1 237 2.8 246 2.8 254 2.8 261 2.8 269 2.8 277 2.8 285 2.8 294 2.8 303 2.8
Total Expenses 2,086 28.8 2,280 27.2 2,424 27.4 2,497 27.4 2,572 27.4 2,649 27.4 2,728 27.4 2,810 27.4 2,895 27.4 2,981 27.4
Management Fee 217 3.0 250 3.0 267 3.0 275 3.0 283 3.0 292 3.0 300 3.0 309 3.0 319 3.0 328 3.0
Property Taxes 613 8.5 631 7.6 650 7.3 669 7.3 689 7.3 710 7.3 731 7.3 753 7.3 776 7.3 799 7.3
Insurance 80 1.1 83 1.0 85 1.0 88 1.0 90 1.0 93 1.0 96 1.0 99 1.0 102 1.0 105 1.0
Reserve for Replacement 145 2.0 250 3.0 356 4.0 367 4.0 378 4.0 389 4.0 401 4.0 413 4.0 425 4.0 438 4.0
Total Expenses 838 11.6 964 11.6 1,091 12.3 1,124 12.3 1,157 12.3 1,192 12.3 1,228 12.3 1,265 12.3 1,303 12.3 1,342 12.3
EBITDA LESS RESERVE $2,030 28.0 % $2,636 31.6 % $2,808 31.4 % $2,892 31.4 % $2,979 31.4 % $3,068 31.4 % $3,161 31.4 % $3,255 31.4 % $3,353 31.4 % $3,453 31.4 %

As illustrated, the hotel is expected to stabilize at a profitable level. Please refer to
the Forecast of Income and Expense chapter of our report for a detailed explanation
of the methodology used in deriving this forecast.
Feasibility Conclusion We have developed an estimate of the total development costs, which includes hard
costs, FF&E, soft costs, pre-opening costs, and working capital, as well as the
developer's fee and an allocation of land cost. Our development cost estimate is
supported by actual cost comparables and the annual HVS Development Cost
Survey. We recommend that the development team obtain a more detailed
development cost estimate from actual construction companies. It is also advised
that developers consult more than one source in their hotel development process to
more accurately assess the true cost of development. The Feasibility Analysis
chapter of this report converts the projected cash flows into a net present value
indication assuming set-forth debt and equity requirements and a development cost
of $35,000,000.
The conclusion of this analysis indicates that an equity investor contributing

$12,247,000 (roughly 35% of the $35,000,000 development cost) could expect to
receive a 17.0% internal rate of return over a ten-year holding period, assuming that
the investor obtains financing at the time of the project’s completion at the loan-to-
value ratio and interest rate set forth.
The proposed subject hotel will serve a segment of business and leisure travelers
that are not currently accommodated in University City. Based on our market
analysis, there is sufficient market demand to support the profitable operation of
the proposed subject hotel. Our review of investor surveys indicates equity returns
ranging from 12.7% to 26.1%, with an average of 18.7%. Based on the anticipated
cost of $35,000,000, the calculated return to the equity investor is near the average
of this range, indicating that the project is feasible. We note that the calculated
return is based upon the cost estimated by HVS, which includes the developer's
administrative costs and an allocation for the cost of the land.
Assignment Conditions “Extraordinary Assumption” is defined in USPAP as follows:
An assignment-specific assumption as of the effective date regarding

uncertain information used in an analysis which, if found to be false, could
alter the appraiser’s opinions or conclusions. Comment: Uncertain
information might include physical, legal, or economic characteristics of the

subject property; or conditions external to the property, such as market
conditions or trends; or the integrity of data used in an analysis.1
The analysis is based on the extraordinary assumption that the described

improvements have been completed as of the stated date of opening. The reader
should understand that the completed subject property does not yet exist as of the
date of this report. Our feasibility study does not address unforeseeable events that
could alter the proposed project, and/or the market conditions reflected in the
analyses; we assume that no significant changes, other than those anticipated and
explained in this report, shall take place between the date of inspection and stated
date of opening. The use of this extraordinary assumption may have affected the
assignment results. We have made no other extraordinary assumptions specific to
this feasibility study. However, several important general assumptions have been
made that apply to this feasibility study and our studies of proposed hotels in
general. These aspects are set forth in the Assumptions and Limiting Conditions
chapter of this report.
Intended Use of the This feasibility report is being prepared for use in the development of the proposed
Feasibility Study subject hotel.
Identification of the The client for this engagement is the City of University City Missouri. This report is
Client and Intended intended for the addressee firm and may not be distributed to or relied upon by
User(s) other persons or entities.
Scope of Work The methodology used to develop this study is based on the market research and
valuation techniques set forth in the textbooks authored by Hospitality Valuation
Services for the American Institute of Real Estate Appraisers and the Appraisal
Institute, entitled The Valuation of Hotels and Motels,2 Hotels, Motels and Restaurants:
Valuations and Market Studies,3 The Computerized Income Approach to Hotel/Motel
Market Studies and Valuations,4 Hotels and Motels: A Guide to Market Analysis,
1 The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice, 2018–2019

ed.
2 Stephen Rushmore, The Valuation of Hotels and Motels. (Chicago: American Institute of
Real Estate Appraisers, 1978).

3 Stephen Rushmore, Hotels, Motels and Restaurants: Valuations and Market Studies.
(Chicago: American Institute of Real Estate Appraisers, 1983).

4 Stephen Rushmore, The Computerized Income Approach to Hotel/Motel Market Studies and
Valuations. (Chicago: American Institute of Real Estate Appraisers, 1990).

Investment Analysis, and Valuations,5 and Hotels and Motels – Valuations and Market
Studies.6
1. All information was collected and analyzed by the staff of TS Worldwide,

LLC. Information was supplied by the client and/or the property’s
development team.
2. The subject site has been evaluated from the viewpoint of its physical utility
for the future operation of a hotel, as well as access, visibility, and other
relevant factors.
3. The subject property's proposed improvements have been reviewed for
their expected quality of construction, design, and layout efficiency.
4. The surrounding economic environment, on both an area and neighborhood
level, has been reviewed to identify specific hostelry-related economic and
demographic trends that may have an impact on future demand for hotels.
5. Dividing the market for hotel accommodations into individual segments
defines specific market characteristics for the types of travelers expected to
utilize the area's hotels. The factors investigated include purpose of visit,
average length of stay, facilities and amenities required, seasonality, daily
demand fluctuations, and price sensitivity.
6. An analysis of existing and proposed competition provides an indication of
the current accommodated demand, along with market penetration and the
degree of competitiveness. Unless noted otherwise, we have inspected the
competitive lodging facilities summarized in this report.
7. Documentation for an occupancy and ADR projection is derived utilizing the
build-up approach based on an analysis of lodging activity.
8. A detailed projection of income and expense made in accordance with the
Uniform System of Accounts for the Lodging Industry sets forth the
anticipated economic benefits of the proposed subject property.
9. A feasibility analysis is performed, in which the market equity yield that an
investor would expect is compared to the equity yield that an investor must
accept.
5 Stephen Rushmore, Hotels and Motels: A Guide to Market Analysis, Investment Analysis,
and Valuations (Chicago: Appraisal Institute, 1992).
6 Stephen Rushmore and Erich Baum, Hotels and Motels – Valuations and Market Studies.
(Chicago: Appraisal Institute, 2001).

2. Recommendation of the Site and Neighborhood
The suitability of the land for the operation of a lodging facility is an important
consideration affecting the economic viability of a property and its ultimate
marketability. Factors such as size, topography, access, visibility, and the availability
of utilities have a direct impact on the desirability of a particular site.
A specific site for the proposed hotel had yet to be determined at the time of this
study. We have identified and evaluated four potential hotel locations around
University City. We have ranked these locations based on four criteria relating to
access, proximity to demand generators, and neighborhood attributes.
January-2020 Recommendation of the Site and Neighborhood

MAP OF EVALUATED LOCATIONS

FIGURE 2-1 LOCATION RANKINGS
Proximity to Proximity
Commercial to Leisure Hotel Guest
Transportation Demand Demand Services in Overall
Site # Access Generators Generators Neighborhood Average
1 - Ol ive & 170 5 2 2 3* 3.00
2 - Del ma r & 170 5 3 3 3 3.5
3 - Fors yth a nd Pa rkwa y 5 4 4 4 4.25
4 - Loop Wes t 2 2 5 5 3.50
* As s umes redevel opment of s i te a re a

Sca le : 5 = Exce ll ent; 4 = Good; 3 = Adequa te, 2 = Cha ll a nged; 1 = Poor
Based on these rankings, location #3 on the southern side of University City, at the
intersection of Forest Park Parkway and Forsyth Boulevard, was deemed the most
attractive and supportive for potential hotel development. This location benefits
from its proximity to ample commercial and leisure demand generators, with
excellent transportation access and a supportive neighborhood. These attributes
make this location ideal for the development of a select-service lodging facility;
however, we note that we have not investigated the availability of specific
development sites within the scope of this study.
Potential location #1 was considered adequate for hotel development on the

strength of its accessibility and the supportive nature of planned redevelopment in
the immediate neighborhood. However, hotel development would be somewhat
contingent on the planned redevelopment, as the neighborhood lacks immediate
proximity to major demand generators.
Location #2 benefits from excellent access and adequate proximity to demand

generators, as well as an adequately supportive neighborhood. These factors make
the location a good candidate for potential development with a limited-service,
select-service, or extended-stay hotel.
Location #4 benefits from a vibrant neighborhood and excellent proximity to leisure

demand generators; however, it lacks ideal access and proximity to commercial
demand generators. Given this balance, the location may serve as an ideal location
for a modestly sized boutique hotel.

FIGURE 2-2 MARKET AREA DEMAND GENERATORS
Map Name Commercial Leisure

1 Del ma r Loop X
2 Wa s hi ngton and Fontbonne Uni vers i ti es X X
3 St. Loui s County Government Center X
4 Centene HQ X
5 Enterpri s e HQ X
6 Gra yba R HQ X
7 Ca l eres HQ X
8 St. Loui s Ga l leri a X
9 Ba yer Crop Sci ence HQ X
10 Da nforth Pl a nt Science Center X
11 Ba rnes /Wa s h U Medi ca l Center X
12 St. Loui s Zoo X
13 St. Loui s Art Mus eum X
14 St. Loui s Sci ence Center X
MAP OF DEMAND GENERATORS

Topography and We assume that the topography and shape of the selected site will permit efficient
Site Utility use of the site for building and site improvements, including ingress and egress.
Access and Visibility It is important to analyze the site with respect to regional and local transportation
routes and demand generators, including ease of access. The subject site is readily
accessible to a variety of local and county roads, as well as state and interstate
highways.
MAP OF REGIONAL ACCESS ROUTES
Regional access to/from University City and the recommended site location, in
particular, is considered excellent. The subject market is served by a variety of
additional local highways, which are illustrated on the map.
We have assumed that primary vehicular access to the subject site would be
provided by Forsyth Boulevard, a well-traveled commercial thoroughfare.
Additionally, the hotel would be proximate to Forest Park Parkway, a regional

highway providing access to Interstate 170 and the Forsyth Metrolink station. The
proposed subject hotel is anticipated to have adequate signage at the street, as well
as on its façade. Overall, the subject site is expected to benefit from excellent
regional accessibility and visibility from within its local neighborhood.
Airport and Metrorail The proposed subject hotel will be served by the Saint Louis Lambert International
Access Airport, which is located approximately ten miles to the northwest of the subject
site. MetroLink is the light-rail transit system in the Greater St. Louis area of
Missouri and the Metro East area of Illinois. The system consists of two lines, the
Red Line and Blue Line, connecting Lambert-St. Louis International Airport and
Shrewsbury, Missouri, with Scott Air Force Base near Shiloh, Illinois, through
downtown St. Louis. The recommended site is adjacent to the Forsyth Station.
Neighborhood The neighborhood surrounding a lodging facility often has an impact on a hotel's
status, image, class, style of operation, and sometimes its ability to attract and
properly serve a particular market segment. This section of the report investigates
the subject neighborhood and evaluates any pertinent location factors that could
affect its future occupancy, average rate, and overall profitability.
The recommended subject location is on the eastern edge of a neighborhood that is

generally defined by Maryland Avenue to the north, Forest Park Parkway to the
south and east, and Brentwood Boulevard to the west. The neighborhood is
characterized by high- and mid-rise office and residential apartment buildings
mixed with low-rise retail shops and restaurants. Some specific businesses and
entities in the area include Centene Corporation, the St. Louis County government
complex, and Graybar; nearby hotels include The Ritz-Carlton St. Louis, Clayton
Plaza Hotel, and Seven Gables. Restaurants located near the subject location include
801 Fish, The Capital Grille, and Cantina Laredo Clayton. In general, this
neighborhood is in the revitalization stage of its life cycle, with many low-rise
buildings being replaced with larger office and residential complexes. One
significant change in this neighborhood is Centene Corporation's ongoing $770-
million, multi-phase campus expansion that will include two office towers, as well
as hotel, retail, residential, auditorium, and parking components. Additionally, the
Sheraton Clayton Plaza Hotel St. Louis is currently undergoing a multi-million-dollar
renovation, three new luxury apartment buildings have recently opened, and
construction on a fourth luxury apartment building is expected to begin in the near
future.

MAP OF NEIGHBORHOOD
Zoning According to the local planning office, the subject property is zoned as follows: GC -
General Commercial. Additional details pertaining to the proposed subject
property’s zoning regulations are summarized in the following table.
FIGURE 2-3 ZONING
Municipality Governing Zoning Univers ity City

Current Zoning General Commercial
Current Us e Commercial
Is Current Use Permitted? Yes
Is Change in Zoning Likely? No
Permitted Us es Mos t Commercial
Hotel Allowed Yes
Legally Non-Conforming Not Applicable

We assume that all necessary permits and approvals will be secured (including the
appropriate liquor license if applicable) and that the subject property will be
constructed in accordance with local zoning ordinances, building codes, and all
other applicable regulations. Our zoning analysis should be verified before any
physical changes are made to the site.

3. Market Area Analysis
The economic vitality of the market area and neighborhood surrounding the subject
site is an important consideration in forecasting lodging demand and future income
potential. Economic and demographic trends that reflect the amount of visitation
provide a basis from which to project lodging demand. The purpose of the market
area analysis is to review available economic and demographic data to determine
whether the local market will undergo economic growth, stabilize, or decline. In
addition to predicting the direction of the economy, the rate of change must be
quantified. These trends are then correlated based on their propensity to reflect
variations in lodging demand, with the objective of forecasting the amount of
growth or decline in visitation by individual market segment (e.g., commercial,
meeting and group, and leisure).
Market Area Definition The market area for a lodging facility is the geographical region where the sources
of demand and the competitive supply are located. The subject site is located in the
city of University City, the county of St. Louis, and the state of Missouri. Located near
the confluence of the Missouri and Mississippi Rivers, St. Louis has long been a
regional center for commerce and transportation. The area was originally settled by
French fur traders in the mid-1700s, prior to being transferred into Spanish and
then American possession. Throughout the 1800s, the area grew and thrived as a
major port for steamboats plying the waterways of the Midwest. In 1904, the city
hosted the World's Fair, which helped establish it as a major metropolis. Today, the
area continues to serve as an economic hub for the Midwest and is home to 14 of
the Fortune 1000 companies.
The subject property’s market area can be defined by its Combined Statistical Area
(CSA): St. Louis-St. Charles-Farmington, MO-IL. The CSA represents adjacent
metropolitan and micropolitan statistical areas that have a moderate degree of
employment interchange. Micropolitan statistical areas represent urban areas in
the United States based around a core city or town with a population of 10,000 to
49,999; the MSA requires the presence of a core city of at least 50,000 people and a
total population of at least 100,000 (75,000 in New England). The following exhibit
illustrates the market area.
January-2020 Market Area Analysis

MAP OF MARKET AREA
Economic and A primary source of economic and demographic statistics used in this analysis is the
Demographic Review Complete Economic and Demographic Data Source published by Woods & Poole
Economics, Inc.—a well-regarded forecasting service based in Washington, D.C.
Using a database containing more than 900 variables for each county in the nation,
Woods & Poole employs a sophisticated regional model to forecast economic and
demographic trends. Historical statistics are based on census data and information
published by the Bureau of Economic Analysis. Projections are formulated by
Woods & Poole, and all dollar amounts have been adjusted for inflation, thus
reflecting real change.
These data are summarized in the following table.

FIGURE 3-1 ECONOMIC AND DEMOGRAPHIC DATA SUMMARY
Average Annual
Compounded Change
2000 2010 2018 2025 2000-10 2010-18 2018-25
Resident Population (Thousands)

St. Loui s County 1,016.2 998.8 1,002.4 1,017.1 (0.2) % 0.0 % 0.2 %
St. Loui s , MO-IL MSA 2,678.8 2,790.1 2,830.6 2,921.4 0.4 0.2 0.5
St. Loui s -St. Cha rl es -Fa rmington, MO-IL CSA 2,776.3 2,895.1 2,936.5 3,031.5 0.4 0.2 0.5
Sta te of Mi s s ouri 5,607.3 5,996.1 6,165.8 6,441.0 0.7 0.3 0.6
Uni ted Sta tes 282,162.4 309,348.1 328,910.9 350,937.2 0.9 0.8 0.9
Per-Capita Personal Income*
St. Loui s County $49,617 $52,905 $60,087 $67,047 0.6 1.6 1.6
St. Loui s , MO-IL MSA 38,541 41,628 46,717 51,428 0.8 1.5 1.4
St. Loui s -St. Cha rl es -Fa rmington, MO-IL CSA 38,096 41,173 46,171 50,822 0.8 1.4 1.4
Sta te of Mi s s ouri 33,660 36,135 40,479 44,236 0.7 1.4 1.3
Uni ted Sta tes 36,812 39,622 46,097 50,233 0.7 1.9 1.2
W&P Wealth Index
St. Loui s County 135.2 134.5 130.7 133.1 (0.1) (0.4) 0.3
St. Loui s , MO-IL MSA 105.3 105.4 101.6 102.4 0.0 (0.5) 0.1
St. Loui s -St. Cha rl es -Fa rmington, MO-IL CSA 104.0 104.2 100.4 101.1 0.0 (0.5) 0.1
Sta te of Mi s s ouri 92.4 91.5 88.1 88.2 (0.1) (0.5) 0.0
Uni ted Sta tes 100.0 100.0 100.0 100.0 0.0 0.0 0.0
Food and Beverage Sales (Millions)*

St. Loui s County $1,725 $1,795 $1,989 $2,023 0.4 1.3 0.2
St. Loui s , MO-IL MSA 3,931 4,348 5,316 5,612 1.0 2.5 0.8
Uni ted Sta tes 368,829 447,728 597,451 662,610 2.0 3.7 1.5
Total Retail Sales (Millions)*

St. Loui s County $18,797 $21,760 $27,951 $29,305 1.5 3.2 0.7
St. Loui s , MO-IL MSA 38,711 41,603 51,527 54,731 0.7 2.7 0.9
Uni ted Sta tes 3,902,830 4,130,414 5,081,233 5,598,240 0.6 2.6 1.4
* Inflation Adjusted
Source: Woods & Poole Economi cs, Inc.

The U.S. population grew at an average annual compounded rate of 0.8% from 2010
through 2018. The county’s population has grown more slowly than the nation’s
population; the average annual growth rate of 0.0% between 2010 and 2018 reflects
a gradually expanding area. Following this population trend, per-capita personal
income increased slowly, at 1.6% on average annually for the county between 2010
and 2018. Local wealth indexes have remained stable in recent years, registering a
high 130.7 level for the county in 2018.
Food and beverage sales totaled $1,989 million in the county in 2018, versus $1,795
million in 2010. This reflects a 1.3% average annual change, stronger than the 0.4%
pace recorded in the prior decade, the latter years of which were adversely affected
by the recession. Over the long term, the pace of growth is forecast to moderate to a
more sustainable level of 0.2%, which is projected through 2025. The retail sales
sector demonstrated an annual increase of 1.5% in the decade spanning from 2000
to 2010, followed by an increase of 3.2% in the period from 2010 to 2018. An
increase of 0.7% average annual change is expected in county retail sales through
2025.
Workforce The characteristics of an area's workforce provide an indication of the type and
Characteristics amount of transient visitation likely to be generated by local businesses. Sectors
such as finance, insurance, and real estate (FIRE); wholesale trade; and services
produce a considerable number of visitors who are not particularly rate-sensitive.
The government sector often generates transient room nights, but per-diem
reimbursement allowances often limit the accommodations selection to budget and
mid-priced lodging facilities. Contributions from manufacturing, construction,
transportation, communications, and public utilities (TCPU) employers can also be
important, depending on the company type.
The following table sets forth the county workforce distribution by business sector
in 2000, 2010, and 2018, as well as a forecast for 2025.

FIGURE 3-2 HISTORICAL AND PROJECTED EMPLOYMENT (000S)
Average Annual
Compounded Change
Percent Percent Percent Percent 2000- 2010- 2018-
Industry 2000 of Total 2010 of Total 2018 of Total 2025 of Total 2010 2018 2025
Fa rm 0.5 0.1 % 0.3 0.0 % 0.3 0.0 % 0.3 0.0 % (5.6) % (0.0) % 0.3 %
Fores try, Fis hing, Rela ted Acti vi ti es And Other 0.4 0.1 0.4 0.1 0.3 0.0 0.3 0.0 (1.4) (3.0) 0.8
Mini ng 1.2 0.2 1.4 0.2 1.6 0.2 1.7 0.2 1.8 1.2 1.0
Uti li ties 1.4 0.2 1.1 0.2 1.0 0.1 1.1 0.1 (2.3) (1.6) 0.6
Cons tructi on 45.0 5.8 34.6 4.7 39.6 4.8 42.8 4.7 (2.6) 1.7 1.1
Ma nufa cturing 78.7 10.1 43.4 5.8 50.0 6.0 48.3 5.3 (5.8) 1.8 (0.5)
Tota l Tra de 123.8 15.9 114.6 15.4 128.9 15.5 139.1 15.3 (0.8) 1.5 1.1
Whol es a le Tra de 38.1 4.9 37.5 5.0 41.7 5.0 44.8 4.9 (0.2) 1.4 1.0
Reta i l Tra de 85.7 11.0 77.1 10.4 87.2 10.5 94.3 10.4 (1.0) 1.5 1.1
Tra ns porta tion And Wa rehous i ng 28.0 3.6 20.7 2.8 24.0 2.9 24.6 2.7 (3.0) 1.9 0.4
Informa ti on 23.0 2.9 17.9 2.4 17.2 2.1 18.0 2.0 (2.4) (0.5) 0.7
Fi na nce And Ins ura nce 45.6 5.8 47.5 6.4 55.5 6.7 60.5 6.7 0.4 2.0 1.2
Rea l Es ta te And Renta l And Lea s e 29.8 3.8 38.3 5.1 43.9 5.3 48.0 5.3 2.5 1.7 1.3
Tota l Services 343.0 43.9 361.4 48.6 408.7 49.2 458.4 50.5 0.5 1.5 1.7
Profes s i ona l And Techni ca l Servi ces 59.7 7.7 58.2 7.8 64.3 7.7 67.0 7.4 (0.3) 1.3 0.6
Ma na gement Of Compa nies And Enterpris es 26.3 3.4 28.0 3.8 31.9 3.8 35.0 3.9 0.6 1.6 1.3
Admi nis tra tive And Wa s te Servi ces 51.5 6.6 50.2 6.8 58.6 7.1 65.0 7.2 (0.3) 1.9 1.5
Educa tiona l Services 26.0 3.3 26.0 3.5 24.5 3.0 29.0 3.2 (0.0) (0.7) 2.4
Hea l th Ca re And Socia l As s i s ta nce 73.8 9.4 92.4 12.4 113.9 13.7 140.4 15.5 2.3 2.6 3.0
Arts , Enterta i nment, And Recrea ti on 15.1 1.9 18.3 2.5 17.8 2.1 18.8 2.1 2.0 (0.4) 0.8
Accommoda ti on And Food Servi ces 51.6 6.6 49.6 6.7 55.4 6.7 57.5 6.3 (0.4) 1.4 0.5
Other Services , Except Publ ic Admini s tra ti on 39.0 5.0 38.7 5.2 42.3 5.1 45.8 5.0 (0.1) 1.1 1.1
Tota l Government 60.1 7.7 62.4 8.4 59.4 7.2 64.2 7.1 0.4 (0.6) 1.1
Federa l Ci vi li a n Government 6.0 0.8 6.8 0.9 5.8 0.7 6.2 0.7 1.3 (1.9) 0.8
Federa l Mil i ta ry 4.0 0.5 3.6 0.5 3.4 0.4 3.4 0.4 (1.1) (0.7) 0.1
Sta te And Loca l Government 50.0 6.4 52.0 7.0 50.2 6.0 54.6 6.0 0.4 (0.4) 1.2
TOTAL 780.6 100.0 % 744.2 100.0 % 830.3 100.0 % 907.3 100.0 % (0.5) % 1.4 % 1.3 %
MSA 1,643.0 — 1,644.7 — 1,825.7 — 1,978.7 — 0.0 % 1.3 % 1.2 %

U.S. 165,372.0 — 173,034.7 — 202,637.9 — 223,254.5 — 1.1 2.0 1.4
Source: Woods & Pool e Economi cs , Inc.

Woods & Poole Economics, Inc. reports that during the period from 2000 to 2010,
total employment in the county contracted at an average annual rate of -0.5%. More
recently, the pace of total employment growth in the county accelerated to 1.4% on
an annual average from 2010 to 2018, reflecting the initial years of the recovery.
Of the primary employment sectors, Total Services recorded the highest increase in
number of employees during the period from 2010 to 2018, increasing by 47,269
people, or 13.1%, and rising from 48.6% to 49.2% of total employment. Of the
various service sub-sectors, Health Care And Social Assistance and Professional And
Technical Services were the largest employers. Strong growth was also recorded in
the Total Trade sector, as well as the Finance And Insurance sector, which expanded
by 12.5% and 15.1%, respectively, in the period from 2010 to 2018. Forecasts
developed by Woods & Poole Economics, Inc. anticipate that total employment in
the county will change by 1.3% on average annually through 2025. The trend is
below the forecast rate of change for the U.S. as a whole during the same period.
The following table illustrates historical and projected employment, households,

population, and average household income data, as provided by REIS for the overall
St. Louis market.

FIGURE 3-3 HISTORICAL & PROJECTED EMPLOYMENT, HOUSEHOLDS, POPULATION, AND HOUSEHOLD INCOME STATISTICS
Total Office Industrial Household

Year Employment % Chg Employment % Chg Employment % Chg Households % Chg Population % Chg Avg. Income % Chg
2006 1,348,630 — 391,781 — 217,712 — 1,099,150 — 2,749,870 — $99,498 —

2007 1,357,930 0.7 % 393,882 0.5 % 215,659 (0.9) % 1,107,410 0.8 % 2,761,670 0.4 % 103,164 3.7 %
2008 1,333,530 (1.8) 390,427 (0.9) 206,986 (4.0) 1,111,110 0.3 2,773,630 0.4 107,813 4.5
2009 1,278,800 (4.1) 381,344 (2.3) 184,569 (10.8) 1,113,030 0.2 2,785,130 0.4 103,511 (4.0)
2010 1,287,470 0.7 385,642 1.1 182,521 (1.1) 1,112,500 (0.0) 2,793,140 0.3 107,386 3.7
2011 1,296,770 0.7 388,182 0.7 184,913 1.3 1,120,930 0.8 2,795,780 0.1 110,765 3.1
2012 1,299,070 0.2 390,173 0.5 184,688 (0.1) 1,129,200 0.7 2,797,820 0.1 118,145 6.7
2013 1,310,770 0.9 397,496 1.9 185,998 0.7 1,138,760 0.8 2,801,300 0.1 114,121 (3.4)
2014 1,331,570 1.6 400,225 0.7 189,832 2.1 1,146,690 0.7 2,806,060 0.2 118,807 4.1
2015 1,358,730 2.0 406,842 1.7 190,163 0.2 1,155,850 0.8 2,806,760 0.0 121,157 2.0
2016 1,370,600 0.9 409,791 0.7 191,670 0.8 1,166,440 0.9 2,805,270 (0.1) 123,373 1.8
2017 1,381,370 0.8 410,016 0.1 194,234 1.3 1,174,000 0.6 2,806,230 0.0 126,931 2.9
2018 1,389,530 0.6 413,118 0.8 199,507 2.7 1,180,380 0.5 2,806,560 0.0 131,769 3.8
Forecasts
2019 1,413,150 1.7 % 418,028 1.2 % 202,809 1.7 % 1,188,990 0.7 % 2,808,870 0.1 % $136,419 3.5 %
2020 1,415,520 0.2 419,134 0.3 201,255 (0.8) 1,195,640 0.6 2,811,180 0.1 140,463 3.0
2021 1,417,100 0.1 420,045 0.2 199,608 (0.8) 1,203,010 0.6 2,813,780 0.1 145,584 3.6
2022 1,425,810 0.6 423,324 0.8 199,128 (0.2) 1,210,290 0.6 2,816,190 0.1 151,540 4.1
2023 1,431,440 0.4 425,707 0.6 198,111 (0.5) 1,216,640 0.5 2,818,240 0.1 157,260 3.8
Average Annual Compound Change

2006 - 2018 0.2 % 0.4 % (0.7) % 0.6 % 0.2 % 2.4 %
2007 - 2010 (1.8) (0.7) (5.4) 0.2 0.4 1.3
2010 - 2018 1.0 0.9 1.1 0.7 0.1 5.2
Forecast 2019 - 2023 0.3 % 0.5 % (0.6) % 0.6 % 0.1 % 3.6 %
Source: REIS Report, 2nd Quarter, 2019

For the St. Louis market, of the roughly 1,400,000 persons employed, 30% are
categorized as office employees, while 14% are categorized as industrial employees.
Total employment decreased by an average annual compound rate of -1.8% during
the recession of 2007 to 2010, followed by an increase of 1.0% from 2010 to 2018.
By comparison, office employment reflected compound change rates of -0.7% and
0.9%, during the same respective periods. Total employment is expected to expand
by 1.7% in 2019, while office employment is forecast to expand by 1.2% in 2019.
From 2019 through 2023, REIS anticipates that total employment will expand at an
average annual compound rate of 0.3%, while office employment will expand by
0.5% on average annually during the same period.
The number of households is forecast to expand by 0.6% on average annually

between 2019 and 2023. Population is forecast to expand during this same period,
at an average annual compounded rate of 0.1%. Household average income is
forecast to grow by 3.6% on average annually from 2019 through 2023.
Radial Demographic The following table reflects radial demographic trends for our market area
Snapshot measured by three points of distance from the subject site.

FIGURE 3-4 DEMOGRAPHICS BY RADIUS
0.00 - 1.00 miles 0.00 - 3.00 miles 0.00 - 5.00 miles

Population
2024 Projection 22,203 127,717 323,854
2019 Es timate 22,328 128,944 327,823
2010 Cens us 22,791 132,945 339,589
2000 Cens us 23,378 141,786 369,994
Percent Change: 2019 to 2024 -0.6% -1.0% -1.2%
Households
2024 Projection 8,344 57,330 144,080
2019 Es timate 8,359 57,542 144,924
2010 Cens us 8,443 58,313 147,431
2000 Cens us 8,789 61,039 156,464
Income
2019 Es t. Average Household Income $113,236 $95,144 $83,146
2019 Es t. Medi an Hous ehold Income 65,226 55,047 50,627
2019 Est. Civ. Employed Pop 16+ by Occupation

Archi tecture/Engi neering 198 932 2,084
Arts /Des i gn/Entertai nment/Sports /Medi a 245 1,806 3,934
Bui lding/Grounds Cl eani ng/Maintenance 330 2,136 6,350
Bus ines s/Financi al Operati ons 606 3,869 8,780
Communi ty/Soci al Servi ces 332 1,422 3,207
Computer/Mathemati cal 388 2,106 5,000
Cons tructi on/Extracti on 161 1,129 3,594
Education/Training/Li brary 1,545 5,876 12,059
Farming/Fi shi ng/Forestry 8 90 260
Food Preparation/Serving Rel ated 683 3,948 11,041
Heal thcare Practi ti oner/Techni ci an 827 5,419 11,894
Heal thcare Support 225 1,633 5,276
Install ati on/Maintenance/Repair 74 949 2,713
Legal 332 2,045 3,609
Life/Physi cal /Social Science 344 1,483 3,056
Management 1,016 6,220 14,864
Offi ce/Admini strative Support 1,454 7,305 20,363
Producti on 224 1,828 6,185
Protective Services 93 811 2,715
Sales /Rel ated 912 5,791 14,687
Pers onal Care/Service 255 1,759 5,196
Trans portation/Material Movi ng 313 2,619 8,367
Source: Environi cs Anal ytics

This source reports a population of 327,823 and 144,924 households within a five-
mile radius of the subject site. The average household income within this radius is
reported at $83,146, while the median is $50,627.
Unemployment The following table presents historical unemployment rates for the proposed
Statistics subject hotel’s market area.
FIGURE 3-5 UNEMPLOYMENT STATISTICS
Year City MSA State U.S.

2009 8.0 % 9.8 % 9.3 % 9.3 %
2010 8.6 9.6 9.6 9.6
2011 7.6 8.5 8.5 8.9
2012 6.0 7.3 6.9 8.1
2013 5.9 7.1 6.7 7.4
2014 5.7 6.2 6.1 6.2
2015 4.6 5.0 5.0 5.3
2016 4.2 4.6 4.6 4.9
2017 3.4 3.8 3.8 4.4
2018 3.0 3.4 3.2 3.9
Recent Month - Nov

2018 2.5 % 2.9 % 2.5 % 3.7 %
2019 2.8 3.0 3.0 3.5
Source: U.S. Bureau of Labor Statis tics
Current U.S. unemployment levels are now firmly below the 4.6% level recorded in
2006 and 2007, the peak years of the economic cycle prior to the Great Recession.
The unemployment rate for July and August of 2019 was 3.7%, with the rate for
September 2019 falling to 3.5%, a level not registered since late 1969. Total
nonfarm payroll employment increased by 159,000, 130,000, and 136,000 jobs in
July, August, and September, respectively. Gains in September occurred in the health
care and professional/business services sectors. Unemployment has remained
under the 5.0% mark since May 2016, reflecting a trend of relative stability and the
overall strength of the U.S. economy. As of September 2019, the number of
unemployed persons was 5.8 million (versus 6.0 million in August 2019).
Locally, the unemployment rate was 3.0% in 2018; for this same area in 2019, the
most recent month’s unemployment rate was registered at 2.8%, versus 2.5% for
the same month in 2018. Unemployment stabilized at an inflated level in 2010 as

the region was affected by the national recession. However, unemployment levels
fell from 2011 through 2018 given the strengthening economy. The most recent
comparative period illustrates a minor increase. Reportedly, however, local
employment has remained strong within the healthcare, financial services, and
high-tech sectors, including healthy job numbers at major employers such as BJC
HealthCare and Wells Fargo Advisors.
Major Business and Providing additional context for understanding the nature of the regional economy,
Industry the following table presents a list of the major employers in the proposed subject
property's market.
FIGURE 3-6 MAJOR EMPLOYERS
Number of
Rank Firm Employees
1 BJC HealthCare 28,975

2 Wal-Mart Stores , Inc. 22,290
3 Was hington Univers ity in St. Louis 16,903
4 SSM Health Care 16,140
5 Mercy Health 15,174
6 Boeing 13,707
7 Scott Air Force Bas e 12,600
8 U.S. Pos tal Service 12,000
9 Schnuck Markets Inc. 9,510
10 Mercy Clinic 9,305
Source: St. Louis Regional Chamber, 2019
Office Space Statistics Trends in occupied office space are typically among the most reliable indicators of
lodging demand, as firms that occupy office space often exhibit a strong propensity
to attract commercial visitors. Thus, trends that cause changes in vacancy rates or
occupied office space may have a proportional impact on commercial lodging
demand and a less direct effect on meeting demand. The following table details
office space statistics for the pertinent market area.

FIGURE 3-7 OFFICE SPACE STATISTICS – MARKET OVERVIEW
Inventory Occupied Office Vacancy Average Asking

Submarket Buildings Square Feet Space Rate Lease Rate
1 Downtown 74 11,002,000 8,592,600 21.9 % $18.76

2 Clayton 92 6,805,000 6,002,000 11.8 26.84
3 Illinois 93 1,419,000 1,108,200 21.9 17.85
4 Olive/Wes tport 132 7,413,000 6,115,700 17.5 21.97
5 Hwy 40 Corridor 155 7,843,000 7,137,100 9.0 25.81
6 South County 94 3,028,000 2,443,600 19.3 22.01
7 St. Louis City 65 2,283,000 1,972,500 13.6 18.21
8 North/St. Charles 120 5,926,000 4,503,800 24.0 19.68
Totals and Averages 825 45,719,000 37,875,500 17.2 % $21.97
The greater St. Louis market comprises a total of 45.7 million square feet of office
space. For the 2nd Quarter of 2019, the market reported a vacancy rate of 17.2%
and an average asking rent of $21.97. The subject property is located in the Clayton
submarket, which houses 6,805,000 square feet of office space. The submarket's
vacancy rate of 11.8% is below the overall market average. The average asking lease
rate of $26.84 is above the average for the broader market.
The following table illustrates a trend of office space statistics for the overall St.
Louis market and the Clayton submarket.

FIGURE 3-8 HISTORICAL AND PROJECTED OFFICE SPACE STATISTICS – GREATER MARKET VS. SUBMARKET
St. Louis Market Clayton Submarket

Available Occupied Vacancy Asking Available Occupied Vacancy Asking
Year Office Space % Chg Office Space % Chg Rate Lease Rate % Chg Office Space % Chg Office Space % Chg Rate Lease Rate % Chg
2006 44,984,000 — 38,110,000 — 15.3 % $19.48 — 6,530,000 — 5,818,000 — 10.9 % $23.28 —

2007 44,808,000 (0.4) % 38,192,000 0.2 % 14.8 19.94 2.4 % 6,376,000 (2.4) % 5,649,000 (2.9) % 11.4 23.93 2.8 %
2008 45,304,000 1.1 38,244,000 0.1 15.6 20.36 2.1 6,398,000 0.3 5,777,000 2.3 9.7 24.91 4.1
2009 45,465,000 0.4 37,209,000 (2.7) 18.2 20.15 (1.0) 6,338,000 (0.9) 5,577,000 (3.5) 12.0 24.74 (0.7)
2010 45,890,000 0.9 37,406,000 0.5 18.5 20.29 0.7 6,823,000 7.7 6,025,000 8.0 11.7 24.85 0.4
2011 45,502,000 (0.8) 37,145,000 (0.7) 18.4 20.42 0.6 6,823,000 0.0 5,977,000 (0.8) 12.4 24.95 0.4
2012 45,481,000 (0.0) 37,075,000 (0.2) 18.5 20.48 0.3 6,823,000 0.0 5,936,000 (0.7) 13.0 25.02 0.3
2013 45,499,000 0.0 37,256,000 0.5 18.1 20.62 0.7 6,823,000 0.0 5,888,000 (0.8) 13.7 25.29 1.1
2014 45,379,000 (0.3) 37,376,000 0.3 17.6 20.83 1.0 6,823,000 0.0 6,059,000 2.9 11.2 25.26 (0.1)
2015 45,135,000 (0.5) 37,609,000 0.6 16.7 21.18 1.7 6,805,000 (0.3) 5,954,000 (1.7) 12.5 25.86 2.4
2016 45,198,000 0.1 37,844,000 0.6 16.3 21.25 0.3 6,805,000 0.0 5,934,000 (0.3) 12.8 25.68 (0.7)
2017 45,586,000 0.9 38,284,000 1.2 16.0 21.56 1.5 6,805,000 0.0 6,022,000 1.5 11.5 26.17 1.9
2018 45,678,000 0.2 38,134,000 (0.4) 16.5 21.82 1.2 6,805,000 0.0 6,016,000 (0.1) 11.6 26.79 2.4
Forecasts
2019 45,719,000 0.1 % 37,897,000 (0.6) % 17.1 % $22.19 1.7 % 6,805,000 0.0 % 5,992,000 (0.4) % 12.0 % $27.21 1.6 %
2020 46,778,000 2.3 38,532,000 1.7 17.6 22.56 1.7 7,455,000 9.6 6,414,000 7.0 14.0 27.73 1.9
2021 46,905,000 0.3 38,624,000 0.2 17.7 22.89 1.5 7,465,000 0.1 6,439,000 0.4 13.8 28.41 2.5
2022 47,164,000 0.6 38,782,000 0.4 17.8 23.19 1.3 7,483,000 0.2 6,464,000 0.4 13.6 29.02 2.1
2023 47,463,000 0.6 38,983,000 0.5 17.9 23.52 1.4 7,504,000 0.3 6,522,000 0.9 13.1 29.70 2.3
Average Annual Compound Change

2006 - 2018 0.1 % 0.0 % 0.9 % 0.3 % 0.3 % 1.2 %
2007 - 2010 0.8 (0.7) 0.6 2.3 2.2 1.3
2010 - 2018 (0.1) 0.2 0.9 (0.0) (0.0) 0.9
Forecast 2019 - 2023 0.9 % 0.7 % 1.5 % 2.5 % 2.1 % 2.2 %

The inventory of office space in the St. Louis market increased at an average annual
compound rate of 0.1% from 2006 through 2018, while occupied office space
remained relatively stable at an average annual rate of 0.0% over the same period.
During the period of 2006 through 2007, occupied office space expanded at an
average annual compound rate of 0.2%. From 2007 through 2010, occupied office
space contracted at an average annual compound rate of -0.7%, reflecting the
impact of the recession. The onset of the recovery is evident in the 0.2% average
annual change in occupied office space from 2010 to 2018. From 2019 through
2023, the inventory of occupied office space is forecast to increase at an average
annual compound rate of 0.7%, with available office space expected to increase
0.9%, thus resulting in an anticipated vacancy rate of 17.9% as of 2023. According
to REIS, the Clayton office submarket is one of the strongest office markets in the
greater Saint Louis area. This market is supported by several major office users,
including Centene Corporation, Enterprise, Greybar, Caleres, and the St. Louis
County government offices. Going forward, the Clayton submarket's vacancy rate is
expected to increase modestly given the ongoing development of additional office
space for Centene Corporation. However, asking rents are anticipated to increase
steadily through 2023.
Convention Activity A convention center serves as a gauge of visitation trends to a particular market.
Convention centers also generate significant levels of demand for area hotels and
serve as a focal point for community activity. Typically, hotels within the closest
proximity to a convention center—up to three miles away—will benefit the most.
Hotels serving as headquarters for an event benefit the most by way of premium
rates and hosting related banquet events. During the largest conventions, peripheral
hotels may benefit from compression within the city as a whole.
America's Center, which includes the St. Louis Executive Conference Center and the
Edward Jones Dome, is the area's primary meeting venue. Originally constructed in
1977 as the Cervantes Convention Center, the center was expanded in 1993; it now
provides more than 500,000 square feet of prime exhibit space. The Dome at
America's Center, a convention facility and stadium that was formerly known as the
Edward Jones Dome, seats over 64,000 people; it was constructed in 1995 following
the demolition of a Sheraton hotel, which had previously occupied the site. The St.
Louis Executive Conference Center is located on the third floor of the America's
Center. It is reportedly the only conference center in the U.S. located inside a
convention center and certified by the International Association of Conference
Centers. In 2012, a $48-million renovation of the convention center was completed.
The project included upgrades to the roof, escalators, elevators, life-safety systems,
HVAC system, kitchens, restrooms, signage, and interior finishes. In April 2019, a
financing mechanism to fund approximately $175 million in renovations and
upgrades to the center was approved. The AC Next Gen project is expected to include
a new ballroom, expanded exhibit space, additional service space and loading docks,

and exterior enhancements. The project in now in the planning and design phase,
with a timeline for completion yet to be established.
CONVENTION CENTER
The following table illustrates recent usage statistics for this facility.

FIGURE 3-9 CONVENTION CENTER STATISTICS
Number of Percent Room Nights Percent

Year Conventions Change Booked Change
2012 32 — 243,819 —
2013 31 (3.1) % 239,570 (1.7) %
2014 54 74.2 258,394 7.9
2015 65 20.4 300,767 16.4
2016 63 (3.1) 327,274 8.8
2017 65 3.2 322,113 (1.6)
2018 50 (23.1) 230,554 (28.4)
Source: Americas Center Convention Complex
While the number of room nights booked remained stable, the number of
conventions declined in 2011. The number of booked room nights notably increased
in 2012, as the convention center benefited from demand returning to the market
and the completion of its renovation. The total number of events and booked room
nights fell slightly in 2013. The number of events and room nights increased
significantly in 2014 and 2015. The recent improvement was supported by
renovations at several larger full-service hotels, as well as multiple new large
conventions that were secured through 2017. Although the number of conventions
decreased slightly, 2016 was another strong year, with the number of room nights
booked reaching an all-time high. Statistics for 2017 show an increase in the number
of conventions and a decrease in room nights year-over-year. In 2018, the number
of events and resulting room nights dropped off sharply due to the loss of multiple
larger events earlier in the year, including the Church of God in Christ Convocation.
Officials reported a strong year in 2019 and are optimistic about 2020, with both
years registering much stronger booking paces than 2018.
Airport Traffic Airport passenger counts are important indicators of lodging demand. Depending
on the type of service provided by a particular airfield, a sizable percentage of
arriving passengers may require hotel accommodations. Trends showing changes
in passenger counts also reflect local business activity and the overall economic
health of the area.
Lambert St. Louis International Airport (STL) is the primary airport for St. Louis,
Missouri, and the surrounding area. Many major commercial airlines service the
airport. A $70-million modernization program of the airport took place from 2008
through 2013, including updates to the security checkpoints, restrooms, ticket
counters, and concourses. Additionally, the dome ceiling was treated, a new baggage

claim system was installed, and new roadway signage was installed as part of the
$1.2-million Wayfinding Project. More recently, portions of the previously shuttered
Concourse D have been renovated in order to accommodate service expansions by
Southwest Airlines.
The following table illustrates recent operating statistics for the Lambert St. Louis
International Airport, which is the primary airport facility serving the proposed
subject hotel’s submarket.
FIGURE 3-10 AIRPORT STATISTICS - LAMBERT ST. LOUIS INTERNATIONAL

AIRPORT
Passenger Percent Percent

Year Traffic Change* Change**
2009 12,828,006 — —
2010 12,331,436 (3.9) % (3.9) %
2011 12,526,150 1.6 (1.2)
2012 12,683,011 1.3 (0.4)
2013 12,570,128 (0.9) (0.5)
2014 12,395,860 (1.4) (0.7)
2015 12,751,683 2.9 (0.1)
2016 13,959,126 9.5 1.2
2017 14,767,582 5.8 1.8
2018 15,632,586 5.9 2.2
Year-to-date, Nov
2018 14,388,276 — —
2019 14,588,795 1.4 % —
*Annual average compounded percentage change from the previous year

**Annual average compounded percentage change from first year of data
Source: La mbert St. Louis Interna tiona l Airport

FIGURE 3-11 LOCAL PASSENGER TRAFFIC VS. NATIONAL
TREND
12%
10%
Change in Pa ssenger Activity

8%
6%
4%
2%
0%
-2%
-4%
-6%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Local Passenger Volume National Passenger Volume
Source: HVS, Local Airport Authority
This facility recorded 15,632,586 passengers in 2018. The change in passenger

traffic between 2017 and 2018 was 5.9%. The average annual change during the
period shown was 2.2%.
Tourist Attractions The subject market benefits from a variety of local tourism and leisure attractions.
Tourism demand is largely generated by attractions throughout the greater St. Louis
area, including Busch Stadium, Forest Park, the St. Louis Zoo, and a number of
casinos. We note that a multi-year renovation to revitalize Union Station as a tourist
destination occurred in 2019 with the opening of a 200-foot-tall Ferris wheel in
October and a new aquarium in December. Furthermore, St. Louis was awarded a
Major League Soccer franchise in 2019. Construction on a new stadium is expected
to begin in 2020 for an inaugural season in 2022.

UNION STATION
Conclusion This section discussed a wide variety of economic indicators for the pertinent
market area. St. Louis is experiencing a period of economic strength and expansion,
primarily led by the financial services, high-tech, and life-science sectors. The
significant presence of healthcare entities also supplies consistent economic
benefits to the region. Furthermore, many of the corporations or institutions that
support this area, such as Wells Fargo Advisors, Stifel Financial Corporation, BJC
HealthCare, Nestlé Purina PetCare, and Anheuser-Busch InBev, are renowned
entities working with a multitude of clients. The outlook for the market area is
positive.

4. Supply and Demand Analysis
In the lodging industry, price varies directly, but not proportionately, with demand
and inversely, but not proportionately, with supply. Supply is measured by the
number of guestrooms available, and demand is measured by the number of rooms
occupied; the net effect of supply and demand toward equilibrium results in a
prevailing price, or average daily rate (ADR). The purpose of this section is to
investigate current supply and demand trends, as indicated by the current
competitive market, and to set forth a basis for the projection of future supply and
demand growth.
National Trends A hotel’s local lodging market is most directly affected by the supply and demand
Overview trends within the immediate area. However, individual markets are also influenced
by conditions in the national lodging market. We have reviewed national lodging
trends to provide a context for the forecast of the supply and demand for the
proposed subject hotel’s competitive set.
STR is an independent research firm that compiles and publishes data on the lodging
industry, and this information is routinely used by typical hotel buyers. The
following STR diagram presents annual hotel occupancy and ADR data since 1988.
The next two tables contain information that is more recent; the data are
categorized by geographical region, price point, type of location, and chain scale, and
the statistics include occupancy, average rate, and rooms revenue per available
room (RevPAR). RevPAR is calculated by multiplying occupancy by average rate and
January-2020 Supply and Demand Analysis

FIGURE 4-1 NATIONAL OCCUPANCY, AVERAGE RATE, AND REVPAR TRENDS
70.0%
$120
65.0%
$100
$80 60.0%
$60
55.0%
$40
50.0%
$20
$0 45.0%
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
RevPAR Average Rate Occupancy
Source: STR

FIGURE 4-2 NATIONAL OCCUPANCY AND ADR TRENDS – YEAR-TO-DATE DATA
Occupancy - YTD August ADR - YTD August RevPAR - YTD August Percent Change
% % % Rms. Rms.
2018 2019 Change 2018 2019 Change 2018 2019 Change Avail. Sold
Uni ted Sta tes 67.6 % 67.6 % 0.1 % $130.55 $131.95 1.1 % $88.19 $89.24 1.2 % 2.0 % 2.1 %
Regi on
New Engl a nd 65.9 % 65.4 % (0.7) % $157.81 $160.48 1.7 % $103.92 $104.92 1.0 % 1.6 % 0.9 %
Mi ddl e Atl a nti c 70.4 69.5 (1.3) 159.44 159.71 0.2 112.22 110.98 (1.1) 2.5 1.2
South Atl a nti c 69.8 69.8 0.1 129.25 131.38 1.7 90.18 91.73 1.7 2.0 2.0
E. North Centra l 62.7 62.5 (0.4) 112.16 112.54 0.3 70.37 70.33 (0.1) 2.1 1.7
E. South Centra l 62.8 64.0 2.0 100.65 103.27 2.6 63.19 66.13 4.6 2.8 4.8
W. North Centra l 58.9 59.7 1.5 100.33 100.23 (0.1) 59.05 59.86 1.4 2.1 3.6
W. South Centra l 64.3 64.4 0.1 103.10 102.57 (0.5) 66.34 66.08 (0.4) 2.6 2.8
Mounta i n 67.0 68.5 1.1 121.33 124.33 2.5 82.26 85.23 3.6 1.1 2.2
Pa ci fi c 75.4 75.2 (0.3) 170.85 173.80 1.7 128.81 130.68 1.4 1.5 1.2
Cl a s s
Luxury 72.5 % 72.4 % (0.1) % $297.73 $301.09 1.1 % $215.75 $217.88 1.0 % 2.7 % 2.6 %
Upper-Ups ca l e 74.6 74.0 (0.7) 186.19 188.82 1.4 138.85 139.77 0.7 2.5 1.7
Ups ca l e 73.4 73.0 (0.5) 143.77 144.87 0.8 105.49 105.78 0.3 3.6 3.1
Upper-Mi ds ca l e 69.3 69.2 (0.1) 116.39 117.28 0.8 80.67 81.20 0.7 3.6 3.5
Mi ds ca l e 61.5 61.4 0.0 96.71 97.25 0.6 59.44 59.76 0.5 1.0 1.0
Economy 60.3 60.9 1.0 75.36 75.73 0.5 45.44 46.13 1.5 (0.3) 0.7
Loca ti on
Urba n 74.5 % 74.0 % (0.7) % $179.02 $180.01 0.6 % $133.34 $133.18 (0.1) % 3.1 % 2.5 %
Suburba n 68.4 68.3 (0.1) 111.61 112.46 0.8 76.30 76.80 0.7 2.2 2.1
Ai rport 75.5 75.5 1.2 119.40 120.49 0.9 90.09 90.99 1.0 2.3 2.3
Inters ta te 58.9 59.4 0.8 87.44 88.55 1.3 51.51 52.61 2.1 1.7 2.6
Res ort 72.7 72.5 (0.2) 183.63 187.51 2.1 133.50 135.99 1.9 1.4 1.1
Sma l l Town 59.0 59.6 1.1 106.71 108.49 1.7 62.91 64.68 2.8 1.1 2.2
Cha i n Sca l e
Luxury 75.8 % 74.5 % (1.7) % $332.09 $338.93 2.1 % $251.65 $252.48 0.3 % 1.1 % (0.7) %
Upper-Ups ca l e 75.9 75.2 (0.8) 186.45 189.63 1.7 141.42 142.67 0.9 1.9 1.0
Ups ca l e 74.8 74.1 (0.9) 142.69 143.52 0.6 106.69 106.31 (0.4) 4.7 3.7
Upper-Mi ds ca l e 69.4 69.2 (0.3) 113.82 114.44 0.5 79.02 79.19 0.2 3.5 3.1
Mi ds ca l e 60.1 60.0 (0.2) 88.09 88.00 (0.1) 52.97 52.79 (0.3) 2.5 2.3
Economy 59.5 60.2 1.1 64.57 64.66 0.1 38.45 38.94 1.3 (1.6) (0.5)
Independents 64.6 65.2 0.9 131.49 133.49 1.5 84.91 87.02 2.5 1.4 2.4
Source: STR - Augus t 2019 Lodgi ng Revi ew

FIGURE 4-3 NATIONAL OCCUPANCY AND ADR TRENDS – CALENDAR-YEAR DATA
Occupancy Average Rate RevPAR Percent Change

% % % Rms. Rms.
2017 2018 Change 2017 2018 Change 2017 2018 Change Avail. Sold
Uni ted Sta tes 65.9 % 66.2 % 0.5 % $126.77 $129.83 2.4 % $83.53 $85.96 2.9 % 2.0 % 2.5 %
Regi on
New Engl a nd 64.6 % 65.9 % 2.1 % $154.39 $157.96 2.3 % $99.72 $104.16 4.5 % 2.0 % 4.1 %
Mi ddl e Atl a nti c 68.4 69.8 2.1 162.05 166.18 2.5 110.77 116.00 4.7 2.4 4.5
South Atl a nti c 67.9 67.9 0.1 123.57 126.45 2.3 83.88 85.88 2.4 1.8 1.8
E. North Centra l 61.3 61.6 0.5 109.90 112.44 2.3 67.37 69.30 2.9 2.0 2.6
E. South Centra l 61.5 62.0 0.7 98.23 100.79 2.6 60.46 62.45 3.3 2.2 2.9
W. North Centra l 58.0 58.0 (0.1) 97.70 99.00 1.3 56.65 57.38 1.3 2.1 2.0
W. South Centra l 62.5 62.7 0.4 100.36 102.53 2.2 62.69 64.29 2.5 2.6 3.0
Mounta i n 65.9 66.2 0.5 118.02 119.06 0.9 77.81 78.88 1.4 1.4 1.9
Pa ci fi c 73.8 73.8 0.0 162.89 168.55 3.5 120.25 124.45 3.5 1.8 1.8
Cl a s s
Luxury 70.7 % 71.3 % 0.9 % $286.91 $294.86 2.8 % $202.87 $210.29 3.7 % 2.4 % 3.3 %
Upper-Ups ca l e 72.8 72.7 (0.1) 181.74 185.59 2.1 132.26 134.88 2.0 2.4 2.2
Ups ca l e 72.3 72.2 (0.2) 141.05 143.86 2.0 101.99 103.81 1.8 4.4 4.2
Upper-Mi ds ca l e 67.7 67.8 0.2 115.32 117.22 1.6 78.08 79.52 1.8 3.9 4.1
Mi ds ca l e 60.6 60.8 0.4 93.42 95.44 2.2 56.58 58.01 2.5 0.6 0.9
Economy 58.7 59.3 1.1 72.23 73.94 2.4 42.38 43.84 3.5 (0.5) 0.6
Loca ti on
Urba n 73.4 % 73.4 % (0.1) % $178.72 $183.14 2.5 % $131.26 $134.41 2.4 % 3.1 % 3.0 %
Suburba n 67.0 67.0 0.1 108.24 110.57 2.2 72.48 74.11 2.2 2.3 2.4
Ai rport 73.7 73.8 0.1 116.23 118.24 1.7 85.63 87.24 1.9 1.7 1.9
Inters ta te 57.2 58.0 1.5 85.11 86.92 2.1 48.65 50.43 3.7 1.6 3.1
Res ort 70.0 70.2 0.3 172.87 179.24 3.7 120.96 125.84 4.0 1.2 1.6
Sma l l Town 57.1 57.9 1.4 102.37 104.34 1.9 58.45 60.42 3.4 1.3 2.7
Cha i n Sca l e
Luxury 74.0 % 74.5 % 0.7 % $323.95 $336.04 3.7 % $239.66 $250.25 4.4 % 2.1 % 2.8 %
Upper-Ups ca l e 74.2 74.0 (0.3) 182.15 185.96 2.1 135.21 137.69 1.8 2.5 2.2
Ups ca l e 73.8 73.5 (0.4) 140.21 142.87 1.9 103.43 104.94 1.5 5.2 4.8
Upper-Mi ds ca l e 67.9 67.8 (0.1) 112.94 114.67 1.5 76.68 77.78 1.4 4.1 4.0
Mi ds ca l e 59.9 60.1 0.3 86.93 88.58 1.9 52.09 53.25 2.2 1.0 1.3
Economy 58.0 58.6 1.0 62.48 63.79 2.1 36.23 37.38 3.2 (0.7) 0.4
Independents 62.7 63.4 1.0 126.21 129.66 2.7 79.17 82.17 3.8 0.5 1.6
Source: STR - December 2018 Lodgi ng Revi ew

In the preceding tables, the subject recommended site is located within the West
North Central region and is considered a suburban location. The recommended
product type falls in the upscale class and chain scale.
Following the significant RevPAR decline experienced during the last recession,
demand growth resumed in 2010, led by select markets that had recorded growth
trends in the fourth quarter of 2009. A return of business travel and some group
activity contributed to these positive trends. The resurgence in demand was partly
fueled by the significant price discounts that were widely available in the first half
of 2010. These discounting policies were largely phased out in the latter half of the
year, balancing much of the early rate loss. Demand growth remained strong, but
decelerated from 2011 through 2013, increasing at rates of 4.7%, 2.8%, and 2.0%,
respectively. Demand growth then surged to 4.0% in 2014, driven by a strong
economy, a robust oil and gas sector, and limited new supply, among other factors.
By 2014, occupancy had surpassed the 64% mark. Average rate rebounded similarly
during this time, bracketing 4.0% annual gains from 2011 through 2014.
In 2015, demand growth continued to outpace supply growth, a relationship that

has been in place since 2010. With a 2.9% increase in room nights, the nation's
occupancy level reached a record high of 65.4% in 2015. Supply growth intensified
modestly in 2015 (at 1.1%), following annual supply growth levels of 0.7% and 0.9%
in 2013 and 2014, respectively. Average rate posted another strong year of growth,
at 4.7% in 2015, in pace with the annual growth of the last four years. Robust job
growth, heightened group and leisure travel, and waning price-sensitivity all
contributed to the gains. In 2016, occupancy showed virtually no change, as demand
growth kept pace with supply additions. Occupancy then moved even higher in 2017
and 2018, to new highs of 65.9% and 66.2%, respectively. Average rate increased
2.1% and 2.4% in 2017 and 2018, respectively. By year-end 2018, the net change in
RevPAR was 2.9%, reflecting a healthy lodging market overall. Year-to-date
statistics through August 2019 reflect no change in occupancy, while average rate
increased by just over $1.00, resulting in a 1.2% upward change in RevPAR.
St. Louis, MO - IL According to STR, as of December 31, 2018, the greater St. Louis, MO - IL area had
Lodging Market 339 hotels with a total of 39,522 guestrooms. These totals represent a 1.7% change
over the 2017 year-end inventory of 38,878 guestrooms. The following table
presents the historical occupancy, average rate, and RevPAR data for the St. Louis
metropolitan area for the years 2000 through 2018, as well as for the comparative
year-to-date period ending in August 2018 and 2019.

FIGURE 4-4 ST. LOUIS LODGING MARKET DATA – 2000 TO YTD AUGUST
2019
Percent Percent Percent

Year Occupancy Change Average Rate Change RevPAR Change
2000 62.9 % — $71.26 — $44.82 —
2001 60.6 (3.7) % 72.06 1.1 % 43.67 (2.6) %
2002 60.3 (0.5) 72.23 0.2 43.55 (0.3)
2003 58.2 (3.5) 72.93 1.0 42.45 (2.5)
2004 59.4 2.1 75.98 4.2 45.13 6.3
2005 60.0 1.0 78.97 3.9 47.38 5.0
2006 60.3 0.5 81.25 2.9 48.99 3.4
2007 60.2 (0.2) 84.91 4.5 51.12 4.3
2008 58.5 (2.8) 87.19 2.7 51.01 (0.2)
2009 54.7 (6.5) 81.54 (6.5) 44.60 (12.6)
2010 57.0 4.2 81.11 (0.5) 46.23 3.7
2011 58.5 2.6 83.78 3.3 49.01 6.0
2012 60.8 3.9 85.73 2.3 52.12 6.4
2013 61.9 1.8 90.49 5.6 56.01 7.5
2014 64.1 3.6 96.04 6.1 61.56 9.9
2015 65.4 2.0 99.06 3.1 64.79 5.2
2016 65.9 0.8 100.83 1.8 66.45 2.6
2017 65.3 (0.9) 104.63 3.8 68.32 2.8
2018 64.7 (0.9) 105.24 0.6 68.09 (0.3)
Year to date through August

2018 66.4 % $105.68 $70.17
2019 65.8 (0.9) % 107.40 1.6 % 70.67 0.7 %
Average Annual Compound Growth

2000 to 2018 0.2 % 2.2 % 2.4 %
Source: STR Gl oba l , STR Monthl y Hotel Revi ew
Since the dawn of the last decade, the greater St. Louis market has experienced two
lodging cycles. In the early 2000s, the market suffered occupancy declines because
of recessionary influences; despite this trend, average rate ticked slightly upward.
In the mid-2000s, the market realized a rebound in demand that fostered stronger
increases in average rate; however, this trend was accompanied by significant
growth in supply, preventing occupancy from rising beyond 60%. As the Great
Recession took hold in 2008 and 2009, occupancy levels dropped to the mid-50s
and average rate followed suit, declining in 2009 and 2010. Demand and occupancy
levels began to recover in 2010, and steady growth continued through 2015. This
positive occupancy trend was supported by a decrease in hotel supply over that

period as a number of older, obsolete properties were closed. The positive supply
and demand fundamentals also provided a foundation for healthy rate growth, and
the market experienced five consecutive years of RevPAR growth over 5.0%. In
2016, occupancy levels and average rates remained strong, but the pace of growth
slowed for both metrics as supply levels began to increase. By 2017, continued
supply growth slightly outpaced demand increases, which resulted in a minimal
occupancy dip. Nonetheless, average rates improved at a healthy pace, allowing the
market to achieve its eighth consecutive year of RevPAR growth. In 2018, continuing
supply growth and a relatively weak convention calendar caused occupancy to
decline further and placed downward pressure on pricing. RevPAR fell slightly for
the year, marking the first annual RevPAR loss in almost ten years. The modest
decline in occupancy continued through mid-year 2019, as steadily increasing
demand was outpaced by supply growth. However, a stronger convention calendar
has provided a foundation for healthier pricing power, resulting in nominal ADR and
RevPAR growth thus far in 2019. The overall outlook for the market is an
expectation of relative stability, as the supply and demand trends of recent years
are anticipated to remain in place for the remainder of 2019 and 2020.
Definition of Subject The subject site is located in the greater Saint Louis lodging market. Within this
Hotel Market greater market, the proposed subject hotel will compete with a smaller set of hotels
based on various factors, such as location, size, service level, and product type.
Historical Supply and As noted previously, STR is an independent research firm that compiles and
Demand Data publishes data on the lodging industry, routinely used by typical hotel buyers. HVS
has ordered and analyzed an STR Trend Report of historical supply and demand
data for a group of hotels considered applicable to this analysis for the proposed
subject hotel. This information is presented in the following table, along with the
market-wide occupancy, average rate, and rooms revenue per available room
(RevPAR). RevPAR is calculated by multiplying occupancy by average rate and

FIGURE 4-5 HISTORICAL SUPPLY AND DEMAND TRENDS
Average Daily Available Occupied Average

Year Room Count Room Nights Change Room Nights Change Occupancy Rate Change RevPAR Change
2009 2,196 801,477 — 447,648 — 55.9 % $122.28 — $68.30 —

2010 2,296 838,070 4.6 % 526,466 17.6 % 62.8 120.83 (1.2) % 75.91 11.1 %
2011 2,266 827,189 (1.3) 535,231 1.7 64.7 128.70 6.5 83.27 9.7
2012 2,329 850,085 2.8 571,090 6.7 67.2 130.34 1.3 87.56 5.1
2013 2,380 868,700 2.2 598,628 4.8 68.9 134.20 3.0 92.48 5.6
2014 2,480 905,364 4.2 635,217 6.1 70.2 140.82 4.9 98.80 6.8
2015 2,749 1,003,544 10.8 718,430 13.1 71.6 144.16 2.4 103.21 4.5
2016 2,802 1,022,730 1.9 724,876 0.9 70.9 148.66 3.1 105.37 2.1
2017 2,801 1,022,546 (0.0) 734,001 1.3 71.8 151.62 2.0 108.83 3.3
2018 2,801 1,022,365 (0.0) 760,131 3.6 74.4 152.66 0.7 113.51 4.3
Year-to-Date Through September
2018 2,801 764,673 — 578,967 — 75.7 % $153.27 — $116.05 —
2019 2,848 777,372 1.7 % 567,265 (2.0) % 73.0 154.18 0.6 % 112.51 (3.0) %
Avera ge Annua l Compounded Cha nge:

2009 - 2012 2.0 % 8.5 % 2.1 % 8.6 %
2012 - 2018 3.1 4.9 2.7 4.4
Competitive Number Year Year
Hotels Included in Sample Class Status of Rooms Affiliated Opened
Royal Sones ta Chas e Park Pl aza St Loui s Ups ca l e Cl as s Secondary 389 Jun 2017 Jun 1922
Seven Ga bl es Inn Upper Ups ca l e Cl as s Secondary 32 Jul 1926 Jul 1926
Hol i da y Inn Expres s St Loui s Centra l Wes t End Upper Mi ds cal e Cl a s s Secondary 127 Oct 2014 Jun 1958
Hampton by Hi l ton Inn & Sui tes Cl a yton/St Loui s -Ga l l eri a Area Upper Mi ds cal e Cl a s s Primary 106 Aug 2014 Jun 1964
Shera ton Hotel Cl ayton Pl a za St Loui s Upper Ups ca l e Cl as s Secondary 259 Aug 1999 Jun 1964
Ches hi re Inn Upper Ups ca l e Cl as s Secondary 108 Aug 2011 Jun 1964
Hi l ton St Loui s Frontenac Upper Ups ca l e Cl as s Secondary 263 Ma r 1993 Jun 1970
Res i dence Inn St Loui s Ga l l eri a Ups ca l e Cl as s Secondary 152 Aug 1986 Aug 1986
Ri tz-Ca rl ton St Loui s Luxury Cl a s s Secondary 299 Apr 1990 Apr 1990
Parkwa y Hotel Upper Ups ca l e Cl as s Secondary 217 Nov 2003 Nov 2003
Hampton Inn St Loui s @ Fores t Pa rk Upper Mi ds cal e Cl a s s Secondary 126 May 2006 May 2006
Spri ngHi l l Sui tes St Loui s Brentwood Ups ca l e Cl as s Primary 123 Aug 2008 Aug 2008
Moonri s e Hotel Luxury Cl a s s Secondary 125 Apr 2009 Apr 2009
Homewood Sui tes by Hi l ton St Loui s Ga l l eri a Ups ca l e Cl as s Secondary 158 Jul 2009 Jul 2009
Drury Inn & Sui tes St Loui s Brentwood Upper Mi ds cal e Cl a s s Primary 210 Aug 2014 Aug 2014
Home2 Sui tes by Hi l ton St Loui s Fores t Pa rk Upper Mi ds cal e Cl a s s Secondary 106 Jul 2015 Jul 2015
Courtya rd St Loui s Brentwood Ups ca l e Cl as s Primary 141 Jul 2019 Jul 2019
Total 2,941

FIGURE 4-6 HISTORICAL SUPPLY AND DEMAND TRENDS (STR)
1,200,000 80.0
70.0
1,000,000
60.0
Occupancy (%)
800,000
Room Nights
50.0
600,000 40.0
30.0
400,000
20.0
200,000
10.0
0 0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Available Room Nights Occupied Room Nights Occupancy
It is important to note some limitations of the STR data. Hotels are occasionally
added to or removed from the sample; furthermore, not every property reports data
in a consistent and timely manner. These factors can influence the overall quality of
the information by skewing the results, and these inconsistencies may also cause
the STR data to differ from the results of our competitive survey. Nonetheless, STR
data provide the best indication of aggregate growth or decline in existing supply
and demand; thus, these trends have been considered in our analysis. Opening
dates, as available, are presented for each reporting hotel in the previous table.
The STR data for the competitive set reflect a market-wide occupancy level of 2018
in 74.4%, which compares to 71.8% for 2017. The STR data for the competitive set
reflect a market-wide ADR level of $152.66 in 2018, which compares to $151.62 for
2017. These occupancy and ADR trends resulted in a RevPAR level of $113.51 in
2018.
During the illustrated historical period, occupancy followed a strengthening trend

from 2009 through 2015 and then remained relatively stable in 2016 and 2017.
Occupancy grew again in 2018, reaching an all-time high. Meanwhile, aside from a
modest decline in 2010, both average rate and RevPAR increased steadily during
this same time period. This improvement in market conditions was driven largely
by a strong recovery from the national recession, followed by economic expansion
and development throughout the greater Saint Louis area. Additionally, market
performance was bolstered by a record volume of meeting and group demand at the
America's Center Convention Complex in 2016 and 2017. Year-to-date 2019 data
illustrate a softening in occupancy, yet a roughly $1 increase in average rate. The

decline in RevPAR for 2019 reflects the impact of supply additions throughout the
greater market, as well as renovation disruptions at multiple competitive
properties. The near-term outlook is cautiously optimistic given the significant
number of new hotel rooms that have recently opened or are under construction.
However, the growing presence of strong economic anchors in this central Saint
Louis submarket should help bolster demand in the near term.
Seasonality Monthly occupancy and average rate trends are presented in the following tables.

FIGURE 4-7 MONTHLY OCCUPANCY TRENDS
Month 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Ja nua ry 42.7 % 41.8 % 47.3 % 47.9 % 48.7 % 52.4 % 52.5 % 52.8 % 51.6 % 55.4 % 54.1 %
Februa ry 49.5 50.9 53.5 54.8 58.0 65.6 61.8 66.7 64.4 68.9 67.9
Ma rch 56.0 59.2 66.6 68.5 64.5 74.0 73.5 68.0 74.0 76.0 76.0
Apri l 60.2 64.7 67.6 71.0 76.5 78.2 77.9 80.2 78.0 80.9 79.6
Ma y 58.7 64.0 69.0 72.7 74.2 75.4 74.5 73.2 76.7 77.9 75.4
June 62.1 71.8 74.0 79.9 78.9 79.6 81.7 81.5 80.3 85.2 82.2
Jul y 58.1 73.4 70.4 71.4 73.3 79.4 80.9 77.8 77.0 75.7 70.7
Augus t 58.8 69.9 68.6 72.6 77.3 72.1 74.0 75.8 78.2 81.5 75.3
September 59.8 73.1 71.2 73.4 74.6 74.3 82.8 78.2 76.5 79.8 75.5
October 66.2 71.9 73.2 76.0 77.9 76.6 75.9 75.8 74.9 80.2 —
November 52.3 62.6 64.2 65.5 69.6 65.4 66.0 66.6 70.9 71.4 —
December 44.2 49.5 50.2 51.8 53.2 51.2 57.0 54.3 58.8 59.4 —
Annual Occupancy 55.9 % 62.8 % 64.7 % 67.2 % 68.9 % 70.2 % 71.6 % 70.9 % 71.8 % 74.4 % —
Year-to-Date 56.4 % 63.3 % 65.5 % 68.1 % 69.6 % 72.3 % 73.4 % 72.7 % 73.0 % 75.7 % 73.0 %
Source: STR

FIGURE 4-8 MONTHLY ADR TRENDS
Month 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Ja nua ry $118.00 $115.02 $119.27 $122.66 $124.56 $126.38 $128.19 $130.87 $135.35 $138.05 $134.76
Februa ry 118.00 113.56 121.52 122.33 126.76 129.95 134.09 136.26 140.11 140.05 143.00
Ma rch 117.69 114.84 123.88 127.41 127.65 134.39 140.55 144.38 147.29 143.42 145.10
Apri l 122.08 120.50 127.35 133.73 135.13 143.19 148.27 151.91 155.17 153.62 155.44
Ma y 135.07 131.80 139.17 141.69 148.56 153.72 158.47 159.16 163.14 163.70 168.56
June 123.52 121.83 129.20 130.50 135.75 143.24 146.98 150.19 152.84 157.40 160.10
Jul y 122.35 119.18 128.72 128.31 129.42 144.58 145.74 147.56 150.58 153.77 154.71
Augus t 121.19 121.35 129.69 129.85 135.55 144.62 143.16 150.79 157.50 165.83 159.29
September 122.94 122.04 129.68 131.34 134.40 143.85 147.13 154.66 158.64 155.53 158.50
October 128.56 126.58 139.92 138.06 143.81 149.15 151.54 162.00 157.90 160.45 —
November 117.33 119.95 125.44 127.84 131.78 135.81 142.09 147.81 149.76 149.80 —
December 114.41 117.03 122.00 122.13 128.06 129.85 132.73 136.73 140.33 138.69 —
Annual Average Rate $122.28 $120.83 $128.70 $130.34 $134.20 $140.82 $144.16 $148.66 $151.62 $152.66 —
Year-to-Date $122.67 $120.51 $128.19 $130.33 $133.78 $141.25 $144.52 $148.18 $152.11 $153.27 $154.18
Source: STR

FIGURE 4-9 SEASONALITY
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
High Season - April, June, July, August, September, October
Occupa ncy 60.8 % 70.8 % 70.8 % 74.1 % 76.4 % 76.6 % 78.8 % 78.2 % 77.5 % 80.5 % 76.5 %
Avera ge Ra te $123.57 $121.94 $130.92 $131.99 $135.76 $144.87 $147.13 $152.81 $155.41 $157.85 $157.65
RevPAR 75.19 86.37 92.76 97.74 103.74 110.96 115.99 119.46 120.38 127.13 120.66
Shoulder Season - February, March, May, November

Occupa ncy 54.3 % 59.3 % 63.6 % 65.6 % 66.7 % 70.1 % 69.1 % 68.7 % 71.7 % 73.7 % 73.3 %
Avera ge Ra te $122.56 $120.66 $128.07 $130.61 $134.55 $139.02 $144.53 $147.44 $150.78 $149.76 $152.81
RevPAR 66.52 71.58 81.41 85.74 89.81 97.45 99.91 101.27 108.10 110.33 111.98
Low Season - January, December

Occupa ncy 43.5 % 45.5 % 48.7 % 49.9 % 51.0 % 51.8 % 54.8 % 53.6 % 55.2 % 57.4 % 54.1 %
Avera ge Ra te $116.06 $116.09 $120.71 $122.38 $126.39 $128.20 $130.59 $133.84 $138.00 $138.38 $134.76
RevPAR 50.48 52.85 58.84 61.03 64.41 66.35 71.54 71.70 76.16 79.45 72.88
Source: Smi th Tra vel Res ea rch

FIGURE 4-10 MONTHLY OCCUPANCY AND ADR TRENDS (TRAILING 12 MONTHS)
90.0 $180.00
80.0 $160.00
70.0 $140.00
Occupancy (%)
60.0 $120.00
50.0 $100.00
40.0 $80.00
30.0 $60.00
20.0 $40.00
10.0 $20.00
0.0 $0.00
Occupancy ADR

The illustrated monthly occupancy and ADR patterns reflect important seasonal
characteristics. We have reviewed these trends in developing our forthcoming
forecast of market-wide demand and average rate.
Patterns of Demand A review of the trends in occupancy and average rate by day of the week provides
some insight into the impact that the current economic conditions have had on the
competitive lodging market. The data, as provided by STR, are illustrated in the
following table(s).

FIGURE 4-11 OCCUPANCY BY DAY OF WEEK (TRAILING 12 MONTHS)
Month Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Month
Oct - 18 55.4 % 79.0 % 85.2 % 81.7 % 80.2 % 88.3 % 90.3 % 80.2 %
Nov - 18 47.4 72.7 77.1 79.3 72.5 74.8 74.5 71.4
Dec - 18 41.0 65.9 69.2 64.8 56.7 55.4 64.6 59.4
Ja n - 19 34.8 64.8 66.7 66.8 51.7 43.2 44.9 54.1
Feb - 19 46.7 74.7 81.8 76.2 64.1 63.0 68.8 67.9
Ma r - 19 50.0 78.3 86.3 85.1 76.8 76.9 83.2 76.0
Apr - 19 54.0 80.9 87.3 86.7 76.5 84.7 84.9 79.6
Ma y - 19 52.6 72.1 84.9 84.4 71.9 80.0 79.5 75.4
Jun - 19 60.2 87.4 94.4 93.7 77.6 80.5 85.9 82.2
Jul - 19 54.7 74.1 77.3 72.9 61.1 72.0 79.8 70.7
Aug - 19 51.1 78.1 83.1 78.6 72.7 78.8 82.6 75.3
Sep - 19 52.7 72.2 87.8 89.1 74.2 78.3 81.1 75.5
Average 50.2 % 74.9 % 81.6 % 79.7 % 69.5 % 73.4 % 76.9 % 72.3 %
Source: STR
FIGURE 4-12 AVERAGE RATE BY DAY OF WEEK (TRAILING 12 MONTHS)
Oct - 18 $147.66 $154.35 $157.64 $159.30 $159.46 $170.51 $170.60 $160.45
Nov - 18 136.48 149.71 156.28 158.44 150.77 144.09 148.42 149.80
Dec - 18 131.78 145.19 146.12 143.97 134.44 132.21 133.26 138.69
Ja n - 19 125.99 138.21 141.48 140.63 135.57 123.66 122.73 134.76
Feb - 19 131.60 145.22 151.61 147.71 142.67 137.52 138.19 143.00
Ma r - 19 132.62 147.65 154.35 153.79 143.89 139.52 141.94 145.10
Apr - 19 140.36 153.27 159.20 162.26 156.62 153.90 156.30 155.44
Ma y - 19 141.52 155.28 168.01 177.98 179.79 175.74 164.86 168.56
Jun - 19 150.50 161.71 164.34 163.84 157.57 156.65 162.94 160.10
Jul - 19 141.94 155.76 163.79 162.22 146.32 147.99 155.14 154.71
Aug - 19 142.96 157.64 160.92 161.54 161.29 161.55 161.67 159.29
Sep - 19 144.10 156.61 163.81 165.02 155.87 157.00 163.23 158.50
Average $139.91 $152.24 $157.77 $159.00 $153.44 $152.48 $153.40 $153.34
Source: STR

FIGURE 4-13 OCCUPANCY AND AVERAGE RATE BY DAY OF WEEK (TRAILING 12 MONTHS)
90.0 $165.00
80.0
$160.00
70.0
$155.00
60.0
Occupancy (%)
50.0 $150.00
40.0 $145.00
30.0
$140.00
20.0
$135.00
10.0
0.0 $130.00
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
Occupancy ADR
FIGURE 4-14 OCCUPANCY, AVERAGE RATE, AND REVPAR BY DAY OF WEEK (MULTIPLE YEARS)
Occupancy (%) Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Year
Oct 16 - Sep 17 47.9 % 70.5 % 80.7 % 80.7 % 69.8 % 71.7 % 76.5 % 71.1 %
Oct 17 - Sep 18 51.2 74.8 83.3 82.8 72.8 74.3 77.9 73.8
Oct 18 - Sep 19 50.2 74.9 81.6 79.7 69.5 73.4 76.9 72.3
Change (Occupancy Points)
FY 17 - FY 18 3.3 4.3 2.6 2.1 3.0 2.5 1.4 2.7
FY 18 - FY 19 (1.1) 0.2 (1.8) (3.2) (3.4) (0.9) (1.0) (1.5)
ADR ($) Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Year
Oct 16 - Sep 17 $140.60 $149.32 $153.27 $154.78 $152.54 $152.99 $153.77 $151.68
Oct 17 - Sep 18 138.75 151.40 156.75 157.56 153.09 152.47 152.44 152.52
Oct 18 - Sep 19 139.91 152.24 157.77 159.00 153.44 152.48 153.40 153.34
Change (Dollars)
FY 17 - FY 18 ($1.85) $2.07 $3.48 $2.78 $0.54 ($0.52) ($1.33) $0.84
FY 18 - FY 19 1.16 0.84 1.02 1.43 0.36 0.01 0.96 0.83
Change (Percent)
FY 17 - FY 18 (1.3) % 1.4 % 2.3 % 1.8 % 0.4 % (0.3) % (0.9) % 0.6 %
FY 18 - FY 19 0.8 0.6 0.6 0.9 0.2 0.0 0.6 0.5
RevPAR ($) Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Year
Oct 16 - Sep 17 $67.34 $105.21 $123.68 $124.98 $106.49 $109.72 $117.56 $107.88
Oct 17 - Sep 18 71.08 113.21 130.62 130.48 111.48 113.22 118.69 112.57
Oct 18 - Sep 19 70.19 114.09 128.69 126.66 106.60 111.89 117.98 110.88
Change (Dollars)
FY 17 - FY 18 $3.74 $8.00 $6.95 $5.50 $4.99 $3.50 $1.13 $4.69
FY 18 - FY 19 (0.90) 0.87 (1.93) (3.82) (4.88) (1.33) (0.71) (1.69)
Change (Percent)
FY 17 - FY 18 5.6 % 7.6 % 5.6 % 4.4 % 4.7 % 3.2 % 1.0 % 4.3 %
FY 18 - FY 19 (1.3) 0.8 (1.5) (2.9) (4.4) (1.2) (0.6) (1.5)
Source: STR
In most markets, business travel, including individual commercial travelers and

corporate groups, is the predominant source of demand on Monday through
Thursday nights. Leisure travelers and non-business-related groups generate a
majority of demand on Friday and Saturday nights. This submarket captures a large
amount of commercial demand from the Clayton CBD, as well as local educational
and healthcare institutions, resulting in high occupancy levels on Tuesday and

Wednesday nights. Additionally, relatively strong weekend demand is generated by
visitors to Forest Park, as well as sporting events and tourist attractions in
Downtown Saint Louis.
SUPPLY The hotels comprising the identified competitive set represent a variety of hotel
product classes and service levels. The following table divides the selection of hotels
by service level, with the class, brand family and room count also noted.
FIGURE 4-15 COMPETITIVE HOTELS SERVICE LEVEL AND CLASS
Full-Service
Name Class Brand Family Room Count
Ri tz-Ca rl ton Luxury Ma rri ott 299
Cl a yton Pl a za Ups ca l e None 242
Shera ton (to be Le Meri di en) Upper Ups ca l e Ma rri ott 259
Cha s e Pa rk Pl a za Roya l Sones ta Upper Ups ca l e None 389
Hi l ton Frontena c Upper Ups ca l e Hi l ton 263
Total: 1,452
Boutique
Monnri s e Hotel Luxury None 125
Seven Ga bl es Inn Upper Ups ca l e None 32
Ches hi re Inn Upper Ups ca l e None 108
Total: 265
Limited-Service
Ha mpton Inn & Sui tes Cl a yton Upper Mi ds ca l e Hi l ton 106
Drury Inn & Sui tes Upper Mi ds ca l e Drury 210
Spri ngHi l l Sui tes Ups ca l e Ma rri ott 123
Ha mpton Inn & Sui tes Fores t Pa rk Upper Mi ds ca l e Hi l ton 126
Pa rkwa y Hotel Ups ca l e None 217
Hol i da y Inn Expres s (to be Hotel Indi go) Upper Mi ds ca l e (to be Upper Ups ca l e) IHG 127
Total: 909
Extended-Stay
Homewood Sui tes Ups ca l e Hi l ton 158
Res i dence Inn Ups ca l e Ma rri ott 152
Home2 Sui tes Upper Mi ds ca l e Hi l ton 106
Total: 416
Select-Service
Courtya rd by Ma rri ott Ups ca l e Ma rri ott 141

In order to help determine the ideal product type and class for the proposed subject
property, we have evaluated the performance of the market by service level and
class, as illustrated in the following tables.
FIGURE 4-16 MARKET PERFORMANCE BY SERVICE LEVEL
% Change % Change
2017 2018 2019 2017-2018 2018-2019 2019 Index
Full-Service
Occupa ncy 66.7 % 71.2 % 67.9 % 6.8 % -4.6 % 95.4 %
Avera ge Ra te $162.19 $163.60 $166.09 0.9 1.5 110.5
RevPAR 108.11 116.42 112.76 7.7 (3.1) 105.4
Select-Service
Occupa ncy 60.0 % 84.3 %
Avera ge Ra te $155.00 103.1
RevPAR 93.00 87.0
Extended-Stay
Occupa ncy 80.8 % 80.2 % 79.1 % -0.8 % -1.4 % 111.1 %
Avera ge Ra te $134.95 $134.87 $134.80 -0.1 -0.1 89.7
RevPAR 109.03 108.14 106.57 (0.8) (1.4) 99.7
Limited-Service
Occupa ncy 75.4 % 77.0 % 74.4 % 2.2 % -3.4 % 104.6 %
Avera ge Ra te $133.37 $134.64 $134.61 0.9 0.0 89.6
RevPAR 100.54 103.71 100.20 3.2 -3.4 93.7
Boutique
Occupa ncy 65.0 % 64.8 % 67.6 % -0.3 % 4.3 % 95.0 %
Avera ge Ra te $157.22 $151.34 $153.67 -3.7 1.5 102.3
RevPAR 102.17 98.03 103.84 (4.1) 5.9 97.1
Source: HVS

FIGURE 4-17 COMPETITIVE HOTELS SERVICE LEVEL AND CLASS
% Change % Change 2019 Index to

2017 2018 2019 2017-2018 2018-2019 2019 Index National Average
Luxury
Occupa ncy 65.0 % 74.0 % 71.0 % 13.8 % -4.1 % 99.8 % 96.1 %
Avera ge Ra te $250.00 $254.00 $255.00 1.6 0.4 169.7 74.2
RevPAR 162.50 187.96 181.05 15.7 (3.7) 169.3 71.4
Upper Upscale
Occupa ncy 67.7 % 70.3 % 68.0 % 3.9 % -3.2 % 95.6 % 92.1 %
Avera ge Ra te $151.01 $148.00 $150.30 -2.0 1.6 100.0 79.2
RevPAR $102.17 $104.00 102.26 1.8 -1.7 95.6 72.9
Upscale
Occupa ncy 72.7 % 74.1 % 71.1 % 1.9 % -4.1 % 99.9 % 98.0 %
Avera ge Ra te $127.22 $127.44 $129.25 0.2 1.4 86.0 90.7
RevPAR 92.53 94.47 91.92 2.1 (2.7) 86.0 88.8
Upper Midscale
Occupa ncy 77.4 % 78.5 % 76.4 % 1.4 % -2.7 % 107.4 % 113.0 %
Avera ge Ra te $133.02 $134.97 $135.08 1.5 0.1 89.9 119.5
RevPAR 102.99 105.94 103.20 2.9 -2.6 96.5 135.2
Source: HVS
The market has been underserved by modern upscale hotels, particularly within the
select-service product class. Given the attributes of the subject site and the
performance o the existing competitors, we have recommended an upscale-select
service hotel as the ideal product type for the proposed subject hotel.
Based on an evaluation of the occupancy, rate structure, market orientation, chain

affiliation, location, facilities, amenities, reputation, and quality of each area hotel,
as well as the comments of management representatives, we have identified a
selection of properties that are expected to be primarily competitive with the
proposed subject hotel. The remaining lodging facilities in the submarket have been
judged only secondarily competitive; although the facilities, rate structures, or
market orientations of these hotels prevent their inclusion among the primary
competitive supply, they are expected to compete with the proposed subject hotel
to some extent.

Primary Competition The following table summarizes the important operating characteristics of the
future primary competitors and the aggregate secondary competitors (if
applicable). This information was compiled from personal interviews, inspections,
online resources, and our in-house database of operating and hotel facility data.

FIGURE 4-18 PRIMARY COMPETITORS – OPERATING PERFORMANCE
up
d Gro
Weighted Weighted
ing an
erc ia
Annual Annual
re
Comm
Number of Room Room Occupancy Yield
M eet
L eisu
Property Rooms Count Occ. Average Rate RevPAR Count Occ. Average Rate RevPAR Penetration Penetration
Hampton Inn and Sui tes

Cla yton Saint Loui s Gall eria 106 65 % 10 % 25 % 106 70 - 75 % $150 - $160 $115 - $120 106 75 - 80 % $150 - $160 $115 - $120 100 - 110 % 110 - 120 %
Area
Courtyard by Marri ott St Louis
141 70 10 20 0 — — — 71 55 - 60 150 - 160 90 - 95 80 - 85 85 - 90
Brentwood
Drury Inn & Sui tes Saint Loui s
210 40 35 25 210 75 - 80 130 - 140 105 - 110 210 75 - 80 130 - 140 105 - 110 100 - 110 100 - 110
Brentwood
SpringHil l Sui tes by Marri ott St
123 65 5 30 123 80 - 85 130 - 140 110 - 115 123 75 - 80 140 - 150 105 - 110 100 - 110 100 - 110
Loui s Brentwood
Sub-Totals/Averages 580 55 % 19 % 26 % 439 79.6 % $140.42 $111.82 510 75.3 % $143.36 $108 $105 % 101.6 %
Secondary Competitors 2,603 42 % 30 % 28 % 1,610 72.4 % $149.80 $108.42 1,565 70.2 % $150.58 $106 $98 % 99.5 %
Totals/Averages 3,183 45 % 27 % 27 % 2,049 73.9 % $147.63 $109.15 2,075 71.4 % $148.71 $106 $100 % 100.0 %
* Specific occupancy and average rate data were utilized in our analysis, but are presented in ranges in the above table for the purposes of confidentiality.

FIGURE 4-19 PRIMARY COMPETITORS – FACILITY PROFILES
Approx. Miles Indoor

Number of Year Last Major To Subject Meeting Meeting Space
Property Rooms Opened Renovation(s) Property Food and Beverage Outlets Space (SF) per Room Facilities & Amenities
Hampton Inn and Sui tes Cla yton Sai nt Loui s Gal l eria Area 106 1964 2014 1.0 Breakfas t Di ni ng Area ; 851 8.0 Bus i nes s Center; Gues t Laundry Area ; Indoor Swi mmi ng Pool ; Fi tnes s Room;
216 North Meramec Avenue Dani el l e's Bar Market Pa ntry
Courtya rd by Ma rri ott St Loui s Brentwood 141 2019 2.8 The Bi s tro Res taurant; The Bi s tro 1,229 8.7 Gues t Laundry Area; Fi tnes s Room; Lobby Works tati on; Market Pantry; Vendi ng
8101 Dal e Avenue Bar Area(s ); Outdoor Patio & Fi re Pit; Car-Rental Servi ce; Laundry/Val et Servi ce
Drury Inn & Sui tes Sai nt Loui s Brentwood 210 2014 2.9 Compl i menta ry Servi ces Area 4,728 22.5 Bus i nes s Center; Gues t Laundry Area ; Conci erge; Outdoor Swi mmi ng Pool;
8700 Eager Road Fi tness Center; Indoor Whi rl pool ; Outdoor Whi rl pool ; Indoor/Outdoor
Swi mmi ng Pool
Spri ngHil l Sui tes by Marri ott St Loui s Brentwood 123 2008 2016 3.1 Breakfas t Di ni ng Area 450 3.7 Gues t Laundry Area; Retai l Outlet/Bouti que; Indoor Swi mmi ng Pool ; Fi tnes s
1231 Stras sner Dri ve Room; Lobby Works tation; Market Pantry; Sundri es Counter; Coffee Stati on;
Laundry/Val et Servi ce

The following map illustrates the locations of the proposed subject property and its
future competitors.

MAP OF COMPETITION

Our survey of the primarily competitive hotels in the local market shows a range of
lodging types and facilities. Each primary competitor was inspected and evaluated.
Descriptions of our findings are presented below.

PRIMARY COMPETITOR #1 - HAMPTON INN AND SUITES CLAYTON SAINT
LOUIS GALLERIA AREA
Hampton Inn and FIGURE 4-20 ESTIMATED HISTORICAL OPERATING STATISTICS

Suites Clayton Saint
Louis Galleria Area Wtd. Annual Occupancy Yield
216 North Meramec Year Room Count Occupancy Average Rate RevPAR Penetration Penetration
Avenue Es t. 2017 106 70 - 75 % $150 - $160 $110 - $115 100 - 110 % 100 - 110 %
Clayton, MO Es t. 2018 106 70 - 75 150 - 160 115 - 120 100 - 110 100 - 110
Es t. 2019 106 75 - 80 150 - 160 115 - 120 100 - 110 110 - 120
This hotel benefits from its Hilton affiliation, including its participation in the Hilton
Honors program. Furthermore, this hotel benefits from its 2014 redevelopment,
when the hotel was completely remodeled and reopened. Overall, the property
appeared to be in very good condition. Its accessibility is inferior to that of the
subject site, and its visibility is inferior to the expected visibility of the Proposed
Hotel University City.

PRIMARY COMPETITOR #2 - COURTYARD BY MARRIOTT ST LOUIS
BRENTWOOD
Courtyard by Marriott FIGURE 4-21 ESTIMATED HISTORICAL OPERATING STATISTICS

St Louis Brentwood
8101 Dale Avenue Wtd. Annual Occupancy Yield
Richmond Heights , MO Year Room Count Occupancy Average Rate RevPAR Penetration Penetration
Es t. 2019 71 55 - 60 150 - 160 90 - 95 80 - 85 85 - 90
This hotel benefits from its 2019 construction, well-known Marriott brand
affiliation, and a clearly visible location from Interstate 64. Overall, the property
appeared to be in excellent condition. Its accessibility is similar to that of the subject
site, and its visibility is similar to the expected visibility of the Proposed Hotel
University City.

PRIMARY COMPETITOR #3 - DRURY INN & SUITES SAINT LOUIS BRENTWOOD
Drury Inn & Suites FIGURE 4-22 ESTIMATED HISTORICAL OPERATING STATISTICS
Saint Louis Brentwood
8700 Eager Road Wtd. Annual Occupancy Yield
Brentwood , MO Year Room Count Occupancy Average Rate RevPAR Penetration Penetration
Est. 2017 210 75 - 80 % $130 - $140 $105 - $110 110 - 120 % 100 - 110 %
Est. 2018 210 75 - 80 130 - 140 105 - 110 100 - 110 95 - 100
Est. 2019 210 75 - 80 130 - 140 105 - 110 100 - 110 100 - 110
This hotel benefits from its well-known brand name, complimentary manager's
reception, and location near several retail shopping areas and restaurants. Overall,
the property appeared to be in very good condition. Its accessibility is similar to that
of the subject site, and its visibility is similar to the expected visibility of the
Proposed Hotel University City.

PRIMARY COMPETITOR #4 - SPRINGHILL SUITES BY MARRIOTT ST LOUIS
BRENTWOOD
SpringHill Suites by FIGURE 4-23 ESTIMATED HISTORICAL OPERATING STATISTICS

Marriott St Louis
Brentwood Wtd. Annual Occupancy Yield
1231 Strassner Drive Year Room Count Occupancy Average Rate RevPAR Penetration Penetration
Brentwood, MO Est. 2017 123 80 - 85 % $130 - $140 $110 - $115 110 - 120 % 100 - 110 %
Est. 2018 123 80 - 85 130 - 140 110 - 115 110 - 120 100 - 110
Est. 2019 123 75 - 80 140 - 150 105 - 110 100 - 110 100 - 110
This hotel benefits from its Marriott affiliation, including its participation in the
Marriott Bonvoy program, and its relatively recent renovation in 2016. Overall, the
property appeared to be in very good condition. Its accessibility is inferior to that of
the subject site, and its visibility is inferior to the expected visibility of the Proposed
Hotel University City.

Secondary Competitors We have also reviewed other area lodging facilities to determine whether any may
compete with the proposed subject hotel on a secondary basis. The room count of
each anticipated secondary competitor has been weighted based on its assumed
degree of competitiveness in the future with the proposed subject hotel. By
assigning degrees of competitiveness, we can assess how the proposed subject hotel
and its future competitors may react to various changes in the market, including
new supply, changes to demand generators, and renovations or franchise changes
of existing supply. The following table sets forth the pertinent operating
characteristics of the secondary competitors.

FIGURE 4-24 SECONDARY COMPETITOR(S) – OPERATING PERFORMANCE
up
d Gro
Weighted Weighted
ing an
ercia
Total Annual Annual
re
Comm
Number of Competitive Room Room
M ee t
L ei su
Property Rooms Level Count Occ. Average Rate RevPAR Count Occ. Average Rate RevPAR
Moonri s e Hotel Sai nt Loui s 125 40 % 20 % 40 % 70 % 88 60 - 65 % $150 - $160 $100 - $105 88 65 - 70 % $160 - $170 $110 - $115
Seven Gabl es Inn Sa i nt

32 50 10 40 70 22 50 - 55 140 - 150 75 - 80 22 55 - 60 150 - 160 90 - 95
Loui s
Ri tz Ca rl ton Sa i nt Loui s 299 45 35 20 60 179 70 - 75 250 - 260 180 - 190 179 70 - 75 250 - 260 180 - 190
Cl ayton Pl aza 242 30 40 30 60 145 60 - 65 105 - 110 65 - 70 145 60 - 65 105 - 110 65 - 70
Shera ton Cl a yton Pl a za

259 45 35 20 70 181 60 - 65 125 - 130 80 - 85 136 50 - 55 125 - 130 65 - 70
Sai nt Loui s
Homewood Sui tes by
158 60 15 25 70 111 75 - 80 140 - 150 115 - 120 111 80 - 85 140 - 150 115 - 120
Hi l ton St. Loui s Ga l l eri a
Ches hi re Inn & Lodge 108 50 20 30 60 65 65 - 70 140 - 150 95 - 100 65 65 - 70 140 - 150 95 - 100
Hampton Inn & Sui tes

126 65 10 25 70 88 80 - 85 140 - 150 125 - 130 88 75 - 80 140 - 150 115 - 120
Sai nt Loui s Fores t Pa rk
Res i dence Inn by Ma rri ott
152 70 10 20 70 106 75 - 80 130 - 140 100 - 105 106 70 - 75 125 - 130 95 - 100
St Loui s Gal l eri a
Cha s e Pa rk Pl aza a Royal
389 30 50 20 50 195 70 - 75 160 - 170 125 - 130 195 70 - 75 170 - 180 120 - 125
Sones ta Hotel
Hol i da y Inn Expres s Sa i nt
127 25 40 35 70 89 65 - 70 105 - 110 70 - 75 89 60 - 65 105 - 110 65 - 70
Loui s Centra l Wes t End
Parkwa y Hotel 217 35 10 55 60 130 70 - 75 125 - 130 90 - 95 130 65 - 70 125 - 130 85 - 90
Home2 Sui tes by Hi l ton

106 55 5 40 50 53 80 - 85 125 - 130 105 - 110 53 80 - 85 130 - 140 105 - 110
Sai nt Loui s Fores t Pa rk
Hi l ton Sai nt Loui s
263 20 60 20 60 158 70 - 75 130 - 140 95 - 100 158 70 - 75 130 - 140 90 - 95
Frontena c
Totals/Averages 2,603 42 % 30 % 28 % 62 % 1,610 72.4 % $149.80 $108.42 1,565 70.2 % $150.58 $105.65
* Specific occupancy and average rate data was utilized in our analysis, but is presented in ranges in the above table for the purposes of confidentiality.

We have identified fourteen hotels that are expected to compete with the proposed
subject hotel based their central Saint Louis locations. The Moonrise Hotel, Cheshire
Inn & Lodge, and Seven Gables Inn offer boutique products; the Ritz Carlton, Clayton
Plaza, Sheraton Clayton Plaza, Chase Park Plaza, and Hilton offer full-service
products; and the Homewood Suites by Hilton, Residence Inn by Marriott, and
Home2 Suites by Hilton offer extended-stay products. Given the various differences
in product type, these hotels target somewhat different customer bases than what
is anticipated for the proposed subject property. Additionally, the Hampton Inn &
Suites Forest Park, Holiday Inn Express, and Parkway Hotel offer similar product
types to what has been recommended for the proposed subject property; however,
these hotels are located in an adjacent submarket with a somewhat different set of
primary demand generators. We note that the Sheraton Clayton Plaza was closed in
2019 for conversion to a Le Méridian hotel and the Holiday Inn Express Central
West End is in the process of being converted to a Hotel Indigo; the rebranding of
these hotels are not expected to substantially change the competitive levels.
Supply Changes It is important to consider any new hotels that may have an impact on the proposed
subject hotel’s operating performance. The hotels that have recently opened, are
under construction, or are in the stages of early development (if any) in the
University City market are noted below. The list is categorized by the principal
submarkets within the city.
FIGURE 4-25 AREA DEVELOPMENT ACTIVITY
Estimated Expected
Number of Qtr. & Year
Proposed Hotel Name Rooms Hotel Product Tier Development Stage of Opening Address
Aloft 129 Upscale Under Construction 2020 Q2 4248 Forest Park Avenue, St. Louis
Element 153 Upscale Under Construction 2020 Q2 3763 Forest Park Avenue, St. Louis
AC by Marriott 192 Upscale Site Work Underway 2021 Q2 221 York Avenue, St. Louis
TownePlace Suites 128 Upper-Midscale Approved 2021 Q2 1695 S. Hanley Rd., Brentwood
AC Hotel Clayton 206 Upscale Approved TBD 227 South Central Avenue, Clayton
Residence Inn by Marriott 168 Upscale Seeking Entitlements TBD 8125 Forsyth Boulevard, Clayton
Tru by Hilton 108 Midscale Seeking Entitlements TBD 711 Kingsland Avenue, University City
Element (Delcrest Plaza) 133 Upscale Seeking Entitlements TBD 8420 Delmar Blvd., University City
Gateway Plaza 135 Upscale Early Development TBD Olive Boulevard & Interstate 170
Centene Campus Hotel 200 TBD Early Development TBD Forsyth Blvd. & Forest Park Pkwy., Clayton
Of the hotels listed in the preceding table, we have identified the following new
supply that is expected to have some degree of competitive interaction with the

proposed subject hotel based on location, anticipated market orientation and price
point, and/or operating profile.
FIGURE 4-26 NEW SUPPLY
Total Weighted
Number Competitive Room Estimated Opening
Proposed Property of Rooms Level Count Date Development Stage
Proposed Subject Property 165 100 % 165 January 1, 2022 Early Development
Aloft 129 50 65 April 1, 2020 Under Construction
AC by Marriott 192 70 134 June 1, 2021 Site Work Underway
TownePlace Suites 128 70 90 June 1, 2021 Approved
Totals/Averages 614 454
The proposed Aloft and AC Hotel by Marriott will be similar to the proposed subject
hotel in terms of product offerings and service levels; however, given these hotels'
locations on the eastern end of this submarket, they have been weighted secondarily
competitive in our analysis. Furthermore, we note that a TownePlace Suites by
Marriott is proposed for a location less than two miles from the subject site;
however, given this hotel's extended-stay product type, it has been weighted
secondarily competitive in our analysis. Additionally, The Sheraton Clayton Plaza
Saint Louis closed in 2019 to undergo renovations and will reopen as the Le
Méridian St. Louis Clayton with an additional nine rooms; however, given this
hotel's full-service product type, it has been weighted secondarily competitive in
our analysis. Lastly, a number of other hotels have been proposed outside of the
competitive submarket in the greater Saint Louis area; however, they have only
been considered qualitatively in our analysis.
While we have taken reasonable steps to investigate proposed hotel projects and
their status, due to the nature of real estate development, it is impossible to
determine with certainty every hotel that will be opened in the future or what their
marketing strategies and effect on the market will be. Depending on the outcome of
current and future projects, the future operating potential of the proposed subject
hotel may be affected. Future improvement in market conditions will raise the risk
of increased competition. Our forthcoming forecast of stabilized occupancy and
average rate is intended to reflect such risk.

Supply Conclusion We have identified various properties that are expected to be competitive to some
degree with the proposed subject hotel. We have also investigated potential
increases in competitive supply in this University City submarket. The Proposed
Hotel University City should enter a dynamic market of varying product types and
price points. Next, we will present our forecast for demand change, using the
historical supply data presented as a starting point.
DEMAND The following table presents the most recent trends for the subject hotel market as
tracked by HVS. These data pertain to the competitors discussed previously in this
section; performance results are estimated, rounded for the competition, and
weighted if there are secondary competitors present. In this respect, the
information in the table differs from the previously presented STR data and is
consistent with the supply and demand analysis developed for this report.
FIGURE 4-27 HISTORICAL MARKET TRENDS
Accommodated Room Nights Market Market

Year Room Nights % Change Available % Change Occupancy Market ADR % Change RevPAR % Change
Est. 2017 535,915 — 747,958 — 71.7 % $146.89 — $105.24 —
Est. 2018 552,999 3.2 % 747,958 0.0 % 73.9 147.63 0.5 % 109.15 3.7 %
Est. 2019 540,840 (2.2) 757,222 1.2 71.4 148.71 0.7 106.21 (2.7)
Avg. Annua l Compounded

Chg., Es t. 2017-Est. 2019: 0.5 % 0.6 % 0.6 % 0.5 %
Demand Analysis For the purpose of demand analysis, the overall market is divided into individual
Using Market segments based on the nature of travel. Based on our fieldwork, area analysis, and
Segmentation knowledge of the local lodging market, we estimate the 2019 distribution of
accommodated-room-night demand as follows.
FIGURE 4-28 ACCOMMODATED-ROOM-NIGHT DEMAND
Marketwide
Accommodated Percentage
Market Segment Demand of Total
Commerci a l 245,354 45 %
Meeti ng a nd Group 148,059 27
Lei s ure 147,427 27
Total 540,840 100 %

FIGURE 4-29 MARKET-WIDE ACCOMMODATED-ROOM-NIGHT DEMAND
Commercial
27%
Meeting and 45%

Group
Leisure
27%
The market’s demand mix comprises commercial demand, with this segment
representing roughly 45% of the accommodated room nights in this University City
submarket. The meeting and group segment comprises 27% of the total, with the
final portion leisure in nature, reflecting 27%.
Using the distribution of accommodated hotel demand as a starting point, we will

analyze the characteristics of each market segment in an effort to determine future
trends in room-night demand.
Commercial Segment Commercial demand consists mainly of individual businesspeople passing through
the subject market or visiting area businesses, in addition to high-volume corporate
accounts generated by local firms. Brand loyalty (particularly frequent-traveler
programs), as well as location and convenience with respect to businesses and
amenities, influence lodging choices in this segment. Companies typically designate
hotels as “preferred” accommodations in return for more favorable rates, which are
discounted in proportion to the number of room nights produced by a commercial
client. Commercial demand is strongest Monday through Thursday nights, declines
significantly on Friday and Saturday, and increases somewhat on Sunday night. It is
relatively constant throughout the year, with marginal declines in late December
and during other holiday periods.
Primary commercial demand generators for this market include major corporate
offices in the area, such as Centene Corporation, Enterprise Holdings, Caleres, and
Graybar. Additionally, the county government complex, Washington University, and
Barnes-Jewish Hospital generate significant commercial demand.

Meeting and Group The meeting-and-group market includes meetings, seminars, conventions, trade
Segment association shows, and similar gatherings of ten or more people. Peak convention
demand typically occurs in the spring and fall. Although there are numerous
classifications within the meeting-and-group segment, the primary categories
considered in this analysis are corporate groups, associations, and SMERFE (social,
military, ethnic, religious, fraternal, and educational) groups. Corporate groups
typically meet during the business week, most commonly in the spring and fall
months. These groups tend to be the most profitable for hotels, as they typically pay
higher rates and usually generate ancillary revenues including food and beverage
and/or banquet revenue. SMERFE groups are typically price-sensitive and tend to
meet on weekends and during the summer months or holiday season, when greater
discounts are usually available; these groups generate limited ancillary revenues.
Association demand is generally divided on a geographical basis, with national,
regional, and state associations representing the most common sources.
Professional associations and/or those supported by members' employers often
meet on weekdays, while other associations prefer to hold events on weekends. The
profile and revenue potential of associations varies depending on the group and the
purpose of the meeting or event.
Meeting and group demand in this market is highly driven by the local corporate
entities and major institutions in and around the University City and Clayton areas.
In addition, SMERFE groups represent consistent sources of demand during
weekend and holiday periods.
Leisure Segment Leisure demand consists of individuals and families spending time in an area or
passing through en route to other destinations. Travel purposes include sightseeing,
recreation, or visiting friends and relatives. Leisure demand also includes room
nights booked through Internet sites such as Expedia, Hotels.com, and Priceline;
however, leisure may not be the purpose of the stay. This demand may also include
business travelers and group and convention attendees who use these channels to
take advantage of any discounts that may be available on these sites. Leisure
demand is strongest on Friday and Saturday nights and all week during holiday
periods and the summer months. These peak periods represent the inverse of
commercial visitation trends, underscoring the stabilizing effect of capturing
weekend and summer tourist travel. Future leisure demand is related to the overall
economic health of the region and the nation. Trends showing changes in state and
regional unemployment and disposable personal income correlate strongly with
leisure travel levels.
Leisure demand for this market is primarily generated by tourist attractions in

Forest Park and Downtown Saint Louis, as well as events held at Washington
University. Additionally, leisure demand is supplemented by travelers visiting
friends and family in the area.

Base Demand Growth The purpose of segmenting the lodging market is to define each major type of
Rates demand, identify customer characteristics, and estimate future growth trends.
Starting with an analysis of the local area, three segments were defined as
representing the proposed subject hotel’s lodging market. Various types of
economic and demographic data were then evaluated to determine their propensity
to reflect changes in hotel demand. Based on this procedure, we forecast the
following average annual compounded market-segment growth rates.
FIGURE 4-30 AVERAGE ANNUAL COMPOUNDED MARKET-SEGMENT GROWTH RATES
Annual Growth Rate

Market Segment 2020 2021 2022 2023 2024
Commerci a l 4.0 % 8.0 % 5.0 % 3.0 % 1.5 %

Meeti ng a nd Group 3.0 5.0 3.0 1.5 1.0
Lei s ure 3.0 3.0 2.0 1.0 0.5
Base Demand Growth 3.5 % 5.8 % 3.7 % 2.1 % 1.1 %
Latent Demand A table presented earlier in this section illustrated the accommodated-room-night
demand in the proposed subject hotel’s competitive market. Because this estimate
is based on historical occupancy levels, it includes only those hotel rooms that were
used by guests. Latent demand reflects potential room-night demand that has not
been realized by the existing competitive supply, further classified as either
unaccommodated demand or induced demand.
Unaccommodated Unaccommodated demand refers to individuals who are unable to secure

Demand accommodations in the market because all the local hotels are filled. These travelers
must defer their trips, settle for less desirable accommodations, or stay in
properties located outside the market area. Because this demand did not yield
occupied room nights, it is not included in the estimate of historical accommodated-
room-night demand. If additional lodging facilities are expected to enter the market,
it is reasonable to assume that these guests will be able to secure hotel rooms in the
future, and it is therefore necessary to quantify this demand.
Unaccommodated demand is further indicated if the market is at all seasonal, with

distinct high and low seasons; such seasonality indicates that although year-end
occupancy may not average in excess of 70%, the market may sell out certain nights
during the year. To evaluate the incidence of unaccommodated demand in the
market, we have reviewed the average occupancy by the night of the week for the
past twelve months for the competitive set, as reflected in the STR data. This is set
forth in the following table.

FIGURE 4-31 OCCUPANCY BY NIGHT OF THE WEEK
Oct - 18 55.4 % 79.0 % 85.2 % 81.7 % 80.2 % 88.3 % 90.3 % 80.2 %
Nov - 18 47.4 72.7 77.1 79.3 72.5 74.8 74.5 71.4
Dec - 18 41.0 65.9 69.2 64.8 56.7 55.4 64.6 59.4
Ja n - 19 34.8 64.8 66.7 66.8 51.7 43.2 44.9 54.1
Feb - 19 46.7 74.7 81.8 76.2 64.1 63.0 68.8 67.9
Ma r - 19 50.0 78.3 86.3 85.1 76.8 76.9 83.2 76.0
Apr - 19 54.0 80.9 87.3 86.7 76.5 84.7 84.9 79.6
Ma y - 19 52.6 72.1 84.9 84.4 71.9 80.0 79.5 75.4
Jun - 19 60.2 87.4 94.4 93.7 77.6 80.5 85.9 82.2
Jul - 19 54.7 74.1 77.3 72.9 61.1 72.0 79.8 70.7
Aug - 19 51.1 78.1 83.1 78.6 72.7 78.8 82.6 75.3
Sep - 19 52.7 72.2 87.8 89.1 74.2 78.3 81.1 75.5
Average 50.2 % 74.9 % 81.6 % 79.7 % 69.5 % 73.4 % 76.9 % 72.3 %
Source: STR
The following table presents our estimate of unaccommodated demand in the

subject market.
FIGURE 4-32 UNACCOMMODATED DEMAND ESTIMATE
Accommodated Room Unaccommodated Unaccommodated

Market Segment Night Demand Demand Percentage Room Night Demand
Commerci a l 245,354 10.8 % 26,469

Meeti ng a nd Group 148,059 4.7 6,905
Lei sure 147,427 4.7 6,905
Total 540,840 7.4 % 40,279
Accordingly, we have forecast unaccommodated demand equivalent to 7.4% of the

base-year demand, resulting from our analysis of monthly and weekly peak demand
and sell-out trends.
Induced Demand Induced demand represents the additional room nights that are expected to be
attracted to the market following the introduction of a new demand generator.
Situations that can result in induced demand include the opening of a new
manufacturing plant, the expansion of a convention center, or the addition of a new

hotel with a distinct chain affiliation or unique facilities. Although increases in
demand are expected in the local market, we have accounted for this growth in the
determination of market-segment growth rates rather than induced demand.
Accommodated Based upon a review of the market dynamics in the proposed subject hotel’s
Demand and Market- competitive environment, we have forecast growth rates for each market segment.
wide Occupancy Using the calculated potential demand for the market, we have determined market-
wide accommodated demand based on the inherent limitations of demand
fluctuations and other factors in the market area.
The following table details our projection of lodging demand growth for the subject
market, including the total number of occupied room nights and any residual
unaccommodated demand in the market.

FIGURE 4-33 FORECAST OF MARKET OCCUPANCY
2019 2020 2021 2022 2023 2024

Commercial
Ba s e Dema nd 245,354 255,168 275,582 289,361 298,041 302,512
Una ccommoda ted Dema nd 26,469 27,528 29,730 31,217 32,153 32,636
Tota l Dema nd 271,823 282,696 305,312 320,577 330,195 335,148
Growth Ra te 4.0 % 8.0 % 5.0 % 3.0 % 1.5 %
Meeting and Group

Ba s e Dema nd 148,059 152,501 160,126 164,930 167,404 169,078
Tota l Dema nd 154,965 159,613 167,594 172,622 175,211 176,963
Growth Ra te 3.0 % 5.0 % 3.0 % 1.5 % 1.0 %
Leisure
Ba s e Dema nd 147,427 151,850 156,405 159,533 161,129 161,934
Tota l Dema nd 154,332 158,962 163,731 167,005 168,675 169,519
Growth Ra te 3.0 % 3.0 % 2.0 % 1.0 % 0.5 %
Totals
Ba s e Dema nd 540,840 559,519 592,113 613,824 626,574 633,524
Tota l Dema nd 581,119 601,271 636,637 660,205 674,081 681,630
les s : Res i dua l Dema nd 40,279 55,576 25,797 3,225 6,468 8,731
Tota l Accommoda te d De ma nd 540,840 545,695 610,840 656,980 667,613 672,899
Overall Demand Growth 0.9 % 11.9 % 7.6 % 1.6 % 0.8 %
Total Supply 2,075 2,120 2,392 2,650 2,650 2,650
Rooms Suppl y Growth — 2.2 % 12.8 % 10.8 % 0.0 % 0.0 %
Marketwide Occupancy 71.4 % 70.5 % 70.0 % 67.9 % 69.0 % 69.6 %
The defined competitive market of hotels should experience a decline in occupancy

over the first three projection years as new supply enters the market. Thereafter,
we anticipate a slight uptick in occupancy, as increasing meeting and group demand
and commercial activity should help the market absorb supply increases. Based on
historical occupancy levels in this market, and taking into consideration typical
supply and demand cyclicality, market occupancy is forecast to stabilize near 70%.

5. Description of the Proposed Improvements
The quality of a lodging facility's physical improvements has a direct influence on

marketability, attainable occupancy, and average room rate. The design and
functionality of the structure can also affect operating efficiency and overall
profitability. This section outlines the subject property's recommended physical
improvements and personal property in an effort to determine how they are
expected to contribute to attainable cash flows.
Project Overview University City is centrally located within the greater Saint Louis metro area. The
city is proximate to key institutions, business centers, tourist attractions, and
transportation networks for the region; however, the city lacks any hotels and is
primarily served by hotels in adjacent cities. We have evaluated the commercial
development clusters within the city for potential hotel use. Based on this
evaluation, we have recommended the subject location as the most attractive for
potential hotel development of an upscale, select-service hotel with 150 to 175
rooms. The recommended site and product would be ideal to capture demand from
the Clayton Central Business District, Forest Park, the Delmar Loop, and local
universities.
The following table summarizes the facilities that are recommended to be available
at the proposed subject hotel.
January-2020 Description of the Proposed Improvements

FIGURE 5-1 PROPOSED FACILITIES SUMMARY
Guestroom Configuration Portion of Units

King 55% - 65%
Queen/Queen 35% - 45%
Suite 5% - 10%
Total 165
Food & Beverage Facilities
Bis tro
Indoor Meeting & Banquet Facilities Est. Square Footage

Meeting Facilities 3,500
Amenities & Services

Fitnes s Room
Bus ines s Center
Market Pantry
Site Improvements and The proposed hotel is anticipated to comprise one multi-story building with
Hotel Structure structured parking. Other site improvements are expected to include freestanding
signage, located at the main entrance to the site. Given the urban nature of the site,
landscaping is anticipated to be limited to small beds and planters. Additional
signage is expected to be placed on the exterior of the building. The hotel's main
entrance should lead directly into the lobby, and the first (ground) floor should
house the public areas and the back-of-the-house space. Guestrooms are expected
to be located on the upper floors. The site and building components are expected to
be normal for a hotel of this type and should meet the standards for this market.
Public Areas The hotel should offer a bistro-style restaurant, a modest amount of meeting space,
and a fitness room. Other amenities are likely to include a business center and a
market pantry. The furnishings of the spaces are expected to be upscale and high
quality in nature, consistent with applicable brand standards. Overall, the
supporting facilities should be appropriate and typical for an upscale select-service
hotel in this market.
Guestrooms The hotel is expected to feature standard and suite-style room configurations, with
guestrooms present on the upper floors of the building. The standard guestrooms
should offer typical amenities for this product type, while the suites are expected to

feature a larger living area and additional amenities such as a microwave and small
refrigerator. The guestroom bathrooms should be of a standard size, with a shower,
commode, and single sink with vanity area, featuring a stone countertop. The floors
are expected to be finished with tile, and the walls will likely be finished with
knockdown texture (consistent with brand standards). Overall, the guestrooms
should offer a competitive product for this central Saint Louis neighborhood.
Back-of-the-House The hotel is expected to be served by the necessary back-of-the-house space,

including an in-house laundry facility, administrative offices, and a prep kitchen to
service the needs of the bistro. These spaces should be adequate for a hotel of this
type and should allow for the efficient operation of the property under competent
management.
ADA and We assume that the property will be built according to all pertinent codes and brand
Environmental standards. Moreover, we assume its construction will not create any environmental
hazards (such as mold) and that the property will fully comply with the Americans
with Disabilities Act.
Capital Expenditures Our analysis assumes that the hotel will require ongoing upgrades and periodic
renovations after its opening in order to maintain its competitive level in this
market and to remain compliant with brand standards. These costs should be
adequately funded by the forecasted reserve for replacement, as long as a
successful, ongoing preventive-maintenance program is employed by hotel staff.
Conclusion Overall, the proposed subject hotel should offer a well-designed, functional layout
of support areas and guestrooms. All typical and market-appropriate features and
amenities are expected to be included in the hotel's design. We assume that the
building will be fully open and operational on the stipulated opening date and will
meet all local building codes and brand standards. Furthermore, we assume that the
hotel staff will be adequately trained to allow for a successful opening and that pre-
marketing efforts will have introduced the product to major local accounts at least
six months in advance of the opening date.

6. Projection of Occupancy and Average Rate
Along with ADR results, the occupancy levels achieved by a hotel are the foundation
of the property's financial performance and market value. Most of a lodging facility's
other revenue sources (such as food and beverage, other operated departments, and
miscellaneous income) are driven by the number of guests, and many expense levels
vary with occupancy. To a certain degree, occupancy attainment can be manipulated
by management. For example, hotel operators may choose to lower rates in an effort
to maximize occupancy. Our forecasts reflect an operating strategy that we believe
would be implemented by a typical, professional hotel management team to achieve
an optimal mix of occupancy and average rate.
Penetration Rate The proposed subject hotel’s forecasted market share and occupancy levels are
Analysis based upon its anticipated competitive position within the market, as quantified by
its penetration rate. The penetration rate is the ratio of a hotel's market share to its
fair share.
Historical Penetration In the following table, the penetration rates attained by the primary competitors
Rates by Market and the aggregate secondary competitors are set forth for each segment for the base
Segment year.
FIGURE 6-1 HISTORICAL PENETRATION RATES

Gr and
lia
p
erc
ng
ou
ll
e
mm
e ti
era
sur
Me
Lei
Ov
Co
Property
Ha mpton Inn a nd Sui tes Cl a yton Sa i nt Loui s Ga l leri a Area 154 % 39 % 99 % 108 %
Courtya rd by Ma rri ott St Loui s Brentwood 130 31 62 84
Drury Inn & Suites Sa i nt Loui s Brentwood 96 140 100 109
Spri ngHi l l Sui tes by Ma rri ott St Loui s Brentwood 156 20 120 109
Seconda ry Competi tion 91 108 100 98
The SpringHill Suites by Marriott St Louis Brentwood achieved the highest

penetration rate within the commercial segment. The highest penetration rate in
the meeting and group segment was achieved by the Drury Inn & Suites Saint Louis
Brentwood, while the SpringHill Suites by Marriott St Louis Brentwood led the
market with the highest leisure penetration rate.
January-2020 Projection of Occupancy and Average Rate

Forecast of Subject Because the supply and demand balance for the competitive market is dynamic,
Property’s Occupancy there is a circular relationship between the penetration factors of each hotel in the
market. The performance of individual new hotels has a direct effect upon the
aggregate performance of the market and, consequently, upon the calculated
penetration factor for each hotel in each market segment. The same is true when the
performance of existing hotels changes, either positively (following a
refurbishment, for example) or negatively (when a poorly maintained or marketed
hotel loses market share).
A hotel’s penetration factor is calculated as its achieved market share of demand

divided by its fair share of demand. Thus, if one hotel’s penetration performance
increases, thereby increasing its achieved market share, this leaves less demand
available in the market for the other hotels to capture, and the penetration
performance of one or more of those other hotels consequently declines (other
things remaining equal). This type of market share adjustment takes place every
time there is a change in supply or a change in the relative penetration performance
of one or more hotels in the competitive market. Our projections of penetration,
demand capture, and occupancy performance for the proposed subject hotel
account for these types of adjustments to market share within the defined
competitive market.
The proposed subject hotel's occupancy forecast is set forth as follows, with the
adjusted projected penetration rates used as a basis for calculating the amount of
captured market demand.

FIGURE 6-2 FORECAST OF SUBJECT PROPERTY'S OCCUPANCY
Market Segment 2022 2023 2024
Commercial
Dema nd 319,034 327,032 330,839
Ma rket Sha re 7.7 % 8.1 % 8.3 %
Ca pture 24,418 26,649 27,417
Penetra ti on 123 % 131 % 133 %
Meeting and Group

Dema nd 171,767 173,528 174,705
Ma rket Sha re 2.9 % 3.7 % 4.0 %
Ca pture 5,044 6,431 7,020
Penetra ti on 47 % 60 % 65 %
Leisure
Dema nd 166,178 167,054 167,354
Ma rket Sha re 6.3 % 6.7 % 6.7 %
Ca pture 10,521 11,193 11,185
Penetra ti on 102 % 108 % 107 %
Total Room Nights Captured 39,984 44,272 45,622

Ava i l a bl e Room Ni ghts 60,225 60,225 60,225
Subject Occupancy 66 % 74 % 76 %
Ma rket-wi de Ava i l a bl e Room Ni ghts 967,250 967,250 967,250
Fair Share 6 % 6 % 6 %
Ma rket-wi de Occupi ed Room Ni ghts 656,980 667,613 672,899
Market Share 6 % 7 % 7 %
Market-wide Occupancy 68 % 69 % 70 %
Total Penetration 98 % 107 % 109 %
Within the commercial segment, the proposed subject hotel’s occupancy

penetration is positioned well above the market-average level, supported by its
location at the edge of the Clayton CBD, as well as the proposed hotel's anticipated
modern, upscale, select-service product offering. The proposed subject hotel's
occupancy penetration in the group segment is positioned well below the range of
existing competitors and market-average level given the proposed hotel's
recommended room count and offering of meeting space. Within the leisure
segment, the proposed subject hotel's occupancy penetration is positioned slightly
above the market-average level, largely attributed to its excellent location and
visibility, as well as its anticipated strong brand affiliation and modern product
offering.

These positioned segment penetration rates result in the following market
segmentation forecast.
FIGURE 6-3 MARKET SEGMENTATION FORECAST – SUBJECT PROPERTY
2022 2023 2024
Commerci a l 61 % 60 % 60 %
Meeti ng a nd Group 13 15 15
Lei s ure 26 25 25
Total 100 % 100 % 100 %
FIGURE 6-4 STABILIZED MARKET SEGMENTATION – SUBJECT PROPERTY
25%
15% 60%
Commercial
Meeting and Group
Leisure
Based on our analysis of the proposed subject hotel and market area, we have
selected a stabilized occupancy level of 76%. The stabilized occupancy is intended
to reflect the anticipated results of the property over its remaining economic life
given all changes in the life cycle of the hotel. Thus, the stabilized occupancy
excludes from consideration any abnormal relationship between supply and
demand, as well as any nonrecurring conditions that may result in unusually high
or low occupancies. Although the proposed subject hotel may operate at
occupancies above this stabilized level, we believe it equally possible for new

competition and temporary economic downturns to force the occupancy below this
selected point of stability.
Average Rate Analysis One of the most important considerations in estimating the value of a lodging facility
is a supportable forecast of its attainable average rate, which is more formally
defined as the average rate per occupied room. Average rate can be calculated by
dividing the total rooms revenue achieved during a specified period by the number
of rooms sold during the same period. The projected average rate and the
anticipated occupancy percentage are used to forecast rooms revenue, which in turn
provides the basis for estimating most other income and expense categories.
Competitive Position Although the ADR analysis presented here follows the occupancy projection, these
two statistics are highly correlated; one cannot project occupancy without making
specific assumptions regarding average rate. This relationship is best illustrated by
revenue per available room (RevPAR), which reflects a property's ability to
maximize rooms revenue. The following table summarizes the historical average
rate, RevPAR, and respective ADR and RevPAR penetration levels for the proposed
subject property’s competitors. The stabilized average rate and RevPAR levels that
have been projected for the proposed subject hotel, expressed in base-year dollars,
are also presented to understand the ADR positioning anticipated for the property
upon stabilization. The basis for our ADR projection follows later in this section of
the report.

FIGURE 6-5 BASE-YEAR ADR AND REVPAR OF THE COMPETITORS
Estimated 2019 Rooms Revenue

Average Room Average Room Per Available RevPAR
Property Rate Rate Penetration Room (RevPAR) Penetration
Ha mpton Inn a nd Sui tes Cl a yton Sa i nt

$150 - $160 100 - 110 % $115 - $120 110 - 120 %
Loui s Ga l l eri a Area
Courtya rd by Ma rri ott St Loui s Brentwood 150 - 160 100 - 110 90 - 95 85 - 90
Drury Inn & Sui tes Sa i nt Loui s Brentwood 130 - 140 90 - 95 105 - 110 100 - 110
Spri ngHi l l Sui tes by Ma rri ott St Loui s

140 - 150 90 - 95 105 - 110 100 - 110
Brentwood
Avera ge - Pri ma ry Competi tors $143.36 96.4 % $107.93 101.6 %
Avera ge - Seconda ry Competi tors 150.58 101.3 105.65 99.5
Overall Average $148.71 100.0 % $106.21 100.0 %

.
Subject As If Stabilized (In 2019 Dollars) $155.00 104.2 % $120.55 113.5 %
The defined primarily competitive market realized an overall average rate of

$143.36 in the 2019 base year, improving from the 2018 level of $140.42. We have
selected the rate position of $155.00, in base-year dollars, for the proposed subject
hotel.
This central Saint Louis market should experience modest ADR growth through the
near term. The proposed subject hotel's rate has been positioned at the top of the
range of the primary competitors because of its anticipated strong brand affiliation
and modern product offering, as well as its excellent location and visibility. Going
forward, the positioned ADR should reflect growth on pace with the overall market.
The proposed subject hotel’s projected average rate is fiscalized to correspond with
the hotel’s anticipated date of opening for each forecast year. Discounts of 2% and
1% have been applied to the stabilized room rates projected for the first two years
of operation, as would be expected for a new property of this type as it builds its
reputation and becomes established in the market.

The following table presents the proposed subject hotel’s ADR penetration level,
followed by the average rate deflated to base-year dollars by the assumed
underlying inflation rate, for each year of the forecast. Note that we have assumed
an underlying inflation rate of 2.5% in the first projection year, 2.5% in the second
projection year, and 3.0% in the third projection year (and thereafter) in our
forecast of income and expense, which follows later in this report.
FIGURE 6-6 ADR FORECAST – MARKET AND PROPOSED SUBJECT PROPERTY
Calendar Year 2019 2020 2021 2022 2023 2024 2025 2026 2027
Ma rket ADR $148.71 $151.68 $153.20 $154.73 $158.60 $163.36 $168.26 $173.31 $178.50
Projected Ma rke t ADR Growth Ra te — 2.0% 1.0% 1.0% 2.5% 3.0% 3.0% 3.0% 3.0%
Propos ed Subject Property ADR (As -If Sta bi l ized) $155.00 $158.10 $159.68 $161.28 $165.31 $170.27 $175.38 $180.64 $186.06
ADR Growth Ra te — 2.0% 1.0% 1.0% 2.5% 3.0% 3.0% 3.0% 3.0%
Propos ed Subject Sta bi l ized ADR Pe netra ti on 104% 104% 104% 104% 104% 104% 104% 104% 104.2%
Fiscal Year 2022 2023 2024 2025 2026 2027
Propos ed Subject Property Avera ge Ra te $161.28 $165.31 $170.27 $175.38 $180.64 $186.06
Opening Di s count 2.0% 1.0% 0.0% 0.0% 0.0% 0.0%
Average Rate After Discount $158.05 $163.66 $170.27 $175.38 $180.64 $186.06
Rea l Ave ra ge Ra te Growth — 3.5% 4.0% 3.0% 3.0% 3.0%
Ma rket ADR $154.73 $158.60 $163.36 $168.26 $173.31 $178.50
Propos ed Subject ADR Pe netra ti on (After Di s count) 102% 103% 104% 104% 104% 104%
ADR Expres s ed i n Ba s e-Yea r Dol la rs Defl a ted @ Infl a ti on Ra te $146.05 $146.83 $148.31 $148.31 $148.31 $148.31
The proposed subject hotel’s ADR penetration level is forecast to reach 104.2% by
the stabilized period, consistent with our stabilized ADR positioning.
The following table sets forth our concluding forecast of the proposed subject
hotel’s occupancy, average rate, and RevPAR, with corresponding penetration
levels, for the first projection year through the stabilized year of operation. The
market’s historical and projected occupancy, average rate, and RevPAR are
presented for comparison, with the projections fiscalized to correspond with the
proposed subject hotel’s forecast, as appropriate.

FIGURE 6-7 COMPARISON OF HISTORICAL AND PROJECTED OCCUPANCY, ADR, AND REVPAR – PROPOSED SUBJECT PROPERTY AND MARKET
Projected
2017 2018 2019 2020 2021 2022 2023 2024 2025
Proposed Hotel University City
Occupa ncy — % — % 66.4 % 73.5 % 75.8 % 75.8 %

Cha nge i n Poi nts — — — 7.1 2.2 0.0
Occupa ncy Penetra ti on — — 97.7 % 106.5 % 108.9 % 108.9 %
Avera ge Ra te $155.00 $158.10 $159.68 $158.05 $163.66 $170.27 $175.38
Cha nge — 1.0 % (1.0) % 3.5 % 4.0 % 3.0 %
Avera ge Ra te Penetra ti on 104.2 % 104.2 % 102.1 % 103.2 % 104.2 % 104.2 %
RevPAR — — $104.93 $120.31 $128.98 $132.85
Cha nge — — — 14.7 % 7.2 % 3.0 %
RevPAR Penetra ti on — — 99.8 % 109.9 % 113.5 % 113.5 %
Historical (Estimated) Projected
2018 2018 2019 2020 2021 2022 2023 2024 2025
University City Submarket
Occupa ncy 71.7 % 73.9 % 71.4 % 70.5 % 70.0 % 67.9 % 69.0 % 69.6 % 69.6 %
Cha nge i n Poi nts — 2.3 (2.5) (0.9) (0.6) (2.0) 1.1 0.5 0.0
Avera ge Ra te $146.89 $147.63 $148.71 $151.68 $153.20 $154.73 $158.60 $163.36 $168.26
Cha nge — 0.5 % 0.7 % 2.0 % 1.0 % 1.0 % 2.5 % 3.0 % 3.0 %
RevPAR $105.24 $109.15 $106.21 $106.96 $107.17 $105.10 $109.47 $113.64 $117.05
Cha nge — 3.7 % (2.7) % 0.7 % 0.2 % (1.9) % 4.2 % 3.8 % 3.0 %

The final forecast reflects years beginning on January 1, 2022, and corresponds with
our financial projections, as shown below.
The following occupancies and average rates will be used to project the proposed
subject hotel’s rooms revenue; this forecast reflects years beginning on January 1,
2022, which correspond with our financial projections.
FIGURE 6-8 FORECASTS OF OCCUPANCY AND AVERAGE RATE
Average Rate Average Rate

Year Occupancy Before Discount Discount After Discount
2022 66 % $161.28 2.0 % $158.05

2023 74 165.31 1.0 163.66
2024 76 170.27 0.0 170.27

7. Projection of Income and Expense
In this chapter of our report, we have compiled a forecast of income and expense for
the proposed subject hotel. This forecast is based on the facilities program set forth
previously, as well as the occupancy and ADR forecast discussed previously.
The forecast of income and expense is expressed in current dollars for each year.
The stabilized year is intended to reflect the anticipated operating results of the
property over its remaining economic life given any or all applicable stages of build-
up, plateau, and decline in the life cycle of the hotel. Thus, income and expense
estimates from the stabilized year forward exclude from consideration any
abnormal relationship between supply and demand, as well as any nonrecurring
conditions that may result in unusual revenues or expenses. The ten-year period
reflects the typical holding period of large real estate assets such as hotels. In
addition, the ten-year period provides for the stabilization of income streams and
comparison of yields with alternate types of real estate. The forecasted income
streams reflect the future benefits of owning specific rights in income-producing
real estate.
Comparable Operating In order to project future income and expense for the proposed subject hotel, we
Statements have included a sample of individual comparable operating statements from our
database of hotel statistics. All financial data are presented according to the three
most common measures of industry performance: ratio to sales (RTS), amounts per
available room (PAR), and amounts per occupied room night (POR). These historical
income and expense statements will be used as benchmarks in our forthcoming
forecast of income and expense.
January-2020 Projection of Income and Expense

FIGURE 7-1 COMPARABLE OPERATING STATEMENTS: RATIO TO SALES
Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject

Stabilized $
Year: 2018/19 2018 2017/18 2017/18 2018/19 2019
Edition: 11 11 11 11 11 11
Number of Rooms: 110 to 140 180 to 240 190 to 250 110 to 140 110 to 150 165
Days Open: 365 365 365 365 365 365
Occupancy: 81% 73% 76% 84% 76% 76%
Average Rate: $131 $146 $156 $156 $144 $148
RevPAR: $106 $107 $119 $131 $109 $113
REVENUE
Rooms 94.1 % 86.4 % 86.3 % 84.3 % 91.7 % 87.6 %
Food & Bevera ge 5.1 7.6 11.0 9.5 7.3 7.7
Other Opera ted Depa rtments 0.7 5.8 1.0 6.1 0.9 4.4
Mi s cel la neous Income 0.0 0.2 1.7 0.1 0.1 0.3
Tota l 100.0 100.0 100.0 100.0 100.0 100.0
DEPARTMENTAL EXPENSES*
Rooms 21.8 20.2 20.8 17.7 20.8 20.5
Food & Bevera ge 54.4 91.5 70.7 76.2 107.5 75.0
Tota l 24.8 27.6 26.1 27.1 27.4 25.9
DEPARTMENTAL INCOME 75.2 72.4 73.9 72.9 72.6 74.1
OPERATING EXPENSES
Admini s tra tive & Genera l 6.6 7.1 9.2 8.7 8.1 7.5
Info. a nd Tel ecom. Sys tems 0.8 1.6 1.0 1.5 1.9 1.1
Ma rketing 5.5 12.6 7.3 7.3 4.4 4.3
Fra nchi s e Fee 6.1 0.0 0.0 6.8 7.1 7.4
Property Opera ti ons & Ma intena nce 6.6 3.6 4.2 3.1 5.1 4.3
Util i ti es 2.5 2.9 2.9 2.6 2.5 2.8
Tota l 28.1 27.9 24.7 29.9 29.1 27.2
HOUSE PROFIT 47.1 44.5 49.2 43.0 43.5 46.8
Ma na gement Fee 4.0 4.0 7.0 4.2 3.0 3.0
INCOME BEFORE FIXED CHARGES 43.1 40.5 42.2 38.8 40.5 43.8
* Depa rtmenta l expens e ra ti os a re expres s ed a s a perce nta ge of depa rtmenta l revenues

FIGURE 7-2 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER AVAILABLE ROOM

Stabilized $
Year: 2018/19 2018 2017/18 2017/18 2018/19 2019
Edition: 11 11 11 11 11 11
Days Open: 365 365 365 365 365 365
Occupancy: 81% 73% 76% 84% 76% 76%
Average Rate: $131 $146 $156 $156 $144 $148
RevPAR: $106 $107 $119 $131 $109 $113
REVENUE
Rooms $38,560 $39,088 $43,593 $47,904 $39,712 $41,142
Food & Bevera ge 2,090 3,450 5,548 5,391 3,177 3,606
Other Opera ted Depa rtments 295 2,618 514 3,474 370 2,081
Mi s cell a neous Income 15 68 846 72 62 139
Tota l 40,960 45,224 50,500 56,840 43,321 46,967
DEPARTMENTAL EXPENSES
Rooms 8,389 7,900 9,086 8,466 8,248 8,434
Food & Bevera ge 1,136 3,156 3,920 4,106 3,414 2,705
Other Opera ted Depa rtments 639 1,426 181 2,820 217 1,040
Tota l 10,165 12,483 13,187 15,392 11,878 12,179
DEPARTMENTAL INCOME 30,795 32,741 37,313 41,448 31,442 34,788
OPERATING EXPENSES
Admi ni s tra tive & Genera l 2,692 3,197 4,648 4,918 3,502 3,500
Info. a nd Telecom. Sys tems 344 711 509 832 829 500
Ma rketing 2,243 5,719 3,680 4,164 1,915 2,000
Fra nchi s e Fee 2,493 0 0 3,849 3,084 3,497
Property Opera tions & Ma i ntena nce 2,705 1,644 2,145 1,761 2,189 2,000
Util iti es 1,033 1,326 1,478 1,476 1,080 1,300
Tota l 11,510 12,598 12,460 17,000 12,600 12,797
HOUSE PROFIT 19,285 20,143 24,853 24,448 18,842 21,991
Ma na gement Fee 1,644 1,809 3,535 2,389 1,301 1,409
INCOME BEFORE FIXED CHARGES 17,641 18,334 21,318 22,060 17,541 20,582

FIGURE 7-3 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER OCCUPIED ROOM

Stabilized $
Year: 2018/19 2018 2017/18 2017/18 2018/19 2019
Edition: 11 11 11 11 11 11
Days Open: 365 365 365 365 365 365
Occupancy: 81% 73% 76% 84% 76% 76%
Average Rate: $131 $146 $156 $156 $144 $148
RevPAR: $106 $107 $119 $131 $109 $113
REVENUE
Rooms $130.97 $146.50 $156.28 $155.82 $143.56 $148.31
Food & Bevera ge 7.10 12.93 19.89 17.53 11.48 13.00
Mis cel la neous Income 0.05 0.26 3.03 0.23 0.23 0.50
Tota l 139.12 169.50 181.04 184.89 156.61 169.31
DEPARTMENTAL EXPENSES
Rooms 28.49 29.61 32.57 27.54 29.82 30.40
Food & Bevera ge 3.86 11.83 14.05 13.36 12.34 9.75
Tota l 34.52 46.78 47.27 50.07 42.94 43.90
DEPARTMENTAL INCOME 104.59 122.71 133.76 134.82 113.67 125.41
OPERATING EXPENSES
Adminis tra ti ve & Genera l 9.14 11.98 16.66 16.00 12.66 12.62
Info. a nd Tel ecom. Sys tems 1.17 2.66 1.82 2.71 3.00 1.80
Ma rketi ng 7.62 21.43 13.19 13.55 6.92 7.21
Fra nchis e Fee 8.47 0.00 0.00 12.52 11.15 12.61
Property Opera tions & Ma i ntena nce 9.19 6.16 7.69 5.73 7.91 7.21
Uti li ti es 3.51 4.97 5.30 4.80 3.91 4.69
Tota l 39.09 47.22 44.67 55.30 45.55 46.13
HOUSE PROFIT 65.50 75.50 89.09 79.52 68.12 79.28
Ma na gement Fee 5.58 6.78 12.67 7.77 4.70 5.08
INCOME BEFORE FIXED CHARGES 59.92 68.72 76.42 71.75 63.41 74.20
The departmental income of the comparable properties ranged from 72.4% to

75.2% of total revenue. The comparable properties achieved a house profit ranging
from 43.0% to 49.2% of total revenue. We will refer to the comparable operating
data in our discussion of each line item, which follows later in this section of the
report.

Fixed and Variable HVS uses a fixed and variable component model to project a lodging facility's
Component Analysis revenue and expense levels. This model is based on the premise that hotel revenues
and expenses have one component that is fixed and another that varies directly with
occupancy and facility usage. A projection can be made by taking a known level of
revenue or expense and calculating its fixed and variable components. The fixed
component is then increased in tandem with the underlying rate of inflation, while
the variable component is adjusted for a specific measure of volume such as total
revenue.
The actual forecast is derived by adjusting each year’s revenue and expense by the
amount fixed (the fixed expense multiplied by the inflated base-year amount) plus
the variable amount (the variable expense multiplied by the inflated base-year
amount) multiplied by the ratio of the projection year’s occupancy to the base-year
occupancy (in the case of departmental revenue and expense) or the ratio of the
projection year’s revenue to the base year’s revenue (in the case of undistributed
operating expenses). Fixed expenses remain fixed, increasing only with inflation.
Our discussion of the revenue and expense forecast in this report is based upon the
output derived from the fixed and variable model. This forecast of revenue and
expense is accomplished through a systematic approach, following the format of the
Uniform System of Accounts for the Lodging Industry. Each category of revenue and
expense is estimated separately and combined at the end in the final statement of
income and expense.
Inflation Assumption In consideration of the most recent trends, the projections set forth previously, and
our assessment of probable property appreciation levels, we have applied
underlying inflation rates of 2.5%, 2.5%, and 3.0% thereafter for each respective
year following the base year of 2019. This stabilized inflation rate takes into account
normal, recurring inflation cycles. Inflation is likely to fluctuate above and below
this level during the projection period. Any exceptions to the application of the
assumed underlying inflation rate are discussed in our write-up of individual
income and expense items.
Forecast of Revenue Based on an analysis that will be detailed throughout this section, we have
and Expense formulated a forecast of income and expense. The following table presents a
detailed forecast through the fifth projection year, including amounts per available
room and per occupied room. The second table illustrates our ten-year forecast of
income and expense, presented with a lesser degree of detail. The forecasts pertain
to years that begin on January 1, 2022, expressed in inflated dollars for each year.

FIGURE 7-4 DETAILED FORECAST OF INCOME AND EXPENSE
2022 (Calendar Year) 2023 Stabilized 2025 2026

Number of Rooms: 165 165 165 165 165
Occupancy: 66% 74% 76% 76% 76%
Average Rate: $158.05 $163.66 $170.27 $175.38 $180.64
RevPAR: $104.31 $121.11 $129.40 $133.29 $137.29
Days Open: 365 365 365 365 365
Occupied Rooms: 39,749 %Gross PAR POR 44,567 %Gross PAR POR 45,771 %Gross PAR POR 45,771 %Gross PAR POR 45,771 %Gross PAR POR
OPERATING REVENUE
Rooms $6,282 86.7 % $38,073 $158.04 $7,294 87.4 % $44,206 $163.67 $7,793 87.6 % $47,230 $170.26 $8,027 87.6 % $48,648 $175.37 $8,268 87.6 % $50,109 $180.64
Food & Beverage 580 8.0 3,517 14.60 650 7.8 3,940 14.59 683 7.7 4,140 14.92 704 7.7 4,264 15.37 725 7.7 4,392 15.83
Rooms 1,427 22.7 8,647 35.89 1,535 21.0 9,302 34.44 1,598 20.5 9,683 34.91 1,646 20.5 9,973 35.95 1,695 20.5 10,272 37.03
Food & Beverage 461 79.5 2,797 11.61 493 75.8 2,988 11.06 512 75.0 3,105 11.19 528 75.0 3,198 11.53 544 75.0 3,294 11.88
Total Expenses 2,072 28.6 12,556 52.12 2,219 26.6 13,446 49.78 2,307 25.9 13,982 50.40 2,376 25.9 14,401 51.92 2,448 25.9 14,834 53.47
Administrative & General 604 8.3 3,658 15.19 638 7.6 3,869 14.32 663 7.5 4,018 14.48 683 7.5 4,139 14.92 703 7.5 4,263 15.37
Marketing 379 5.2 2,300 9.55 365 4.4 2,211 8.18 379 4.3 2,296 8.28 390 4.3 2,365 8.53 402 4.3 2,436 8.78
Franchise Fee 534 7.4 3,236 13.43 620 7.4 3,758 13.91 662 7.4 4,015 14.47 682 7.4 4,135 14.91 703 7.4 4,259 15.35
Prop. Operations & Maint. 259 3.6 1,568 6.51 328 3.9 1,990 7.37 379 4.3 2,296 8.28 390 4.3 2,365 8.53 402 4.3 2,436 8.78
Utilities 224 3.1 1,359 5.64 237 2.8 1,437 5.32 246 2.8 1,492 5.38 254 2.8 1,537 5.54 261 2.8 1,583 5.71
Total Expenses 2,086 28.8 12,644 52.48 2,280 27.2 13,816 51.15 2,424 27.4 14,691 52.96 2,497 27.4 15,132 54.55 2,572 27.4 15,586 56.19
Management Fee 217 3.0 1,317 5.47 250 3.0 1,518 5.62 267 3.0 1,618 5.83 275 3.0 1,666 6.01 283 3.0 1,716 6.19
Property Taxes 613 8.5 3,713 15.41 631 7.6 3,824 14.16 650 7.3 3,939 14.20 669 7.3 4,057 14.62 689 7.3 4,178 15.06
Insurance 80 1.1 487 2.02 83 1.0 502 1.86 85 1.0 517 1.86 88 1.0 532 1.92 90 1.0 548 1.98
Reserve for Replacement 145 2.0 878 3.64 250 3.0 1,518 5.62 356 4.0 2,157 7.77 367 4.0 2,221 8.01 378 4.0 2,288 8.25
Total Expenses 838 11.6 5,077 21.08 964 11.6 5,843 21.63 1,091 12.3 6,612 23.84 1,124 12.3 6,810 24.55 1,157 12.3 7,015 25.29
EBITDA LESS RESERVE $2,030 28.0 % $12,303 $51.07 $2,636 31.6 % $15,977 $59.15 $2,808 31.4 % $17,015 $61.34 $2,892 31.4 % $17,527 $63.18 $2,979 31.4 % $18,054 $65.08
*Departmental expenses are expressed as a percentage of departmental revenues.

FIGURE 7-5 TEN-YEAR FORECAST OF INCOME AND EXPENSE
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Number of Rooms: 165 165 165 165 165 165 165 165 165 165
Occupied Rooms: 39,749 44,567 45,771 45,771 45,771 45,771 45,771 45,771 45,771 45,771
Occupancy: 66% 74% 76% 76% 76% 76% 76% 76% 76% 76%
Average Rate: $158.05 % of $163.66 % of $170.27 % of $175.38 % of $180.64 % of $186.06 % of $191.64 % of $197.39 % of $203.31 % of $209.41 % of
RevPAR: $104.31 Gross $121.11 Gross $129.40 Gross $133.29 Gross $137.29 Gross $141.40 Gross $145.65 Gross $150.02 Gross $154.52 Gross $159.15 Gross
OPERATING REVENUE
Rooms $6,282 86.7 % $7,294 87.4 % $7,793 87.6 % $8,027 87.6 % $8,268 87.6 % $8,516 87.6 % $8,772 87.6 % $9,035 87.6 % $9,306 87.6 % $9,585 87.6 %
Food & Beverage 580 8.0 650 7.8 683 7.7 704 7.7 725 7.7 746 7.7 769 7.7 792 7.7 816 7.7 840 7.7
Rooms 1,427 22.7 1,535 21.0 1,598 20.5 1,646 20.5 1,695 20.5 1,746 20.5 1,798 20.5 1,852 20.5 1,908 20.5 1,965 20.5
Food & Beverage 461 79.5 493 75.8 512 75.0 528 75.0 544 75.0 560 75.0 577 75.0 594 75.0 612 75.0 630 75.0
Total Expenses 2,072 28.6 2,219 26.6 2,307 25.9 2,376 25.9 2,448 25.9 2,521 25.9 2,597 25.9 2,674 25.9 2,755 25.9 2,837 25.9
Administrative & General 604 8.3 638 7.6 663 7.5 683 7.5 703 7.5 724 7.5 746 7.5 769 7.5 792 7.5 815 7.5
Marketing 379 5.2 365 4.4 379 4.3 390 4.3 402 4.3 414 4.3 426 4.3 439 4.3 452 4.3 466 4.3
Franchise Fee 534 7.4 620 7.4 662 7.4 682 7.4 703 7.4 724 7.4 746 7.4 768 7.4 791 7.4 815 7.4
Prop. Operations & Maint. 259 3.6 328 3.9 379 4.3 390 4.3 402 4.3 414 4.3 426 4.3 439 4.3 452 4.3 466 4.3
Utilities 224 3.1 237 2.8 246 2.8 254 2.8 261 2.8 269 2.8 277 2.8 285 2.8 294 2.8 303 2.8
Total Expenses 2,086 28.8 2,280 27.2 2,424 27.4 2,497 27.4 2,572 27.4 2,649 27.4 2,728 27.4 2,810 27.4 2,895 27.4 2,981 27.4
Management Fee 217 3.0 250 3.0 267 3.0 275 3.0 283 3.0 292 3.0 300 3.0 309 3.0 319 3.0 328 3.0
Property Taxes 613 8.5 631 7.6 650 7.3 669 7.3 689 7.3 710 7.3 731 7.3 753 7.3 776 7.3 799 7.3
Insurance 80 1.1 83 1.0 85 1.0 88 1.0 90 1.0 93 1.0 96 1.0 99 1.0 102 1.0 105 1.0
Reserve for Replacement 145 2.0 250 3.0 356 4.0 367 4.0 378 4.0 389 4.0 401 4.0 413 4.0 425 4.0 438 4.0
Total Expenses 838 11.6 964 11.6 1,091 12.3 1,124 12.3 1,157 12.3 1,192 12.3 1,228 12.3 1,265 12.3 1,303 12.3 1,342 12.3
EBITDA LESS RESERVE $2,030 28.0 % $2,636 31.6 % $2,808 31.4 % $2,892 31.4 % $2,979 31.4 % $3,068 31.4 % $3,161 31.4 % $3,255 31.4 % $3,353 31.4 % $3,453 31.4 %

The following description sets forth the basis for the forecast of income and expense.
We anticipate that it will take three years for the proposed subject hotel to reach a
stabilized level of operation. Each revenue and expense item has been forecast
based upon our review of the proposed subject hotel's operating budget and
comparable income and expense statements. The forecast is based upon calendar
years beginning January 1, 2022, expressed in inflated dollars for each year.
Rooms Revenue Rooms revenue is determined by two variables: occupancy and average rate. We
projected occupancy and average rate in a previous section of this report. The
proposed subject hotel is expected to stabilize at an occupancy level of 76% with an
average rate of $170.27 in 2024. Following the stabilized year, the proposed subject
hotel’s average rate is projected to increase along with the underlying rate of
inflation.
Food and Beverage Food and beverage (F&B) revenue is generated by a hotel's restaurants, lounges,
Revenue coffee shops, snack bars, banquet rooms, and room service. In addition to providing
a source of revenue, these outlets serve as an amenity that assists in the sale of
guestrooms. With the exception of properties with active lounges or banquet
facilities that draw local residents, in-house guests generally represent a substantial
percentage of a hotel's F&B patrons. In the case of the Proposed Hotel University
City, the F&B department will include a bistro; moreover, banquet space is expected
to encompass 3,500 square feet.
Although F&B revenue varies directly with changes in occupancy, the small portion
generated by banquet sales and outside capture is relatively fixed.
FIGURE 7-6 FOOD AND BEVERAGE REVENUE
Comparable Operating Statements Proposed Subject Property Forecast

#1 #2 #3 #4 #5 2022 Deflated Stabilized
Food & Beverage Revenue
Percenta ge of Revenue 5.1 % 7.6 % 11.0 % 9.5 % 7.3 % 8.0 % 7.7 %
Per Ava i l a bl e Room $2,090 $3,450 $5,548 $5,391 $3,177 $3,517 $3,606
Per Occupi ed Room $7.10 $12.93 $19.89 $17.53 $11.48 $14.60 $13.00
Other Operated According to the Uniform System of Accounts, other operated departments include
Departments Revenue any major or minor operated department other than rooms and food and beverage
(F&B).

Proposed Hotel University City – University City, Missouri
FIGURE 7-7 OTHER OPERATED DEPARTMENTS REVENUE

Percentage of Revenue 0.7 % 5.8 % 1.0 % 6.1 % 0.9 % 4.9 % 4.4 %

Per Ava i l a bl e Room $295 $2,618 $514 $3,474 $370 $2,163 $2,081
Miscellaneous Income The miscellaneous income sources comprise those other than guestrooms, F&B, and
the other operated departments. Changes in this revenue item through the
projection period result from the application of the underlying inflation rate and
projected changes in occupancy.
FIGURE 7-8 MISCELLANEOUS INCOME


Per Ava i l a bl e Room $15 $68 $846 $72 $62 $144 $139
Rooms Expense Rooms expense consists of items related to the sale and upkeep of guestrooms and
public space. Salaries, wages, and employee benefits account for a substantial
portion of this category. Although payroll varies somewhat with occupancy, and
managers can generally scale the level of service staff on hand to meet an expected
occupancy level, much of a hotel's payroll is fixed. A base level of front desk
personnel, housekeepers, and supervisors must be maintained at all times. As a
result, salaries, wages, and employee benefits are only moderately sensitive to
changes in occupancy.
Commissions and reservations are usually based on room sales and, thus, are highly
sensitive to changes in occupancy and average rate. While guest supplies vary 100%
with occupancy, linens and other operating expenses are only slightly affected by
volume.

FIGURE 7-9 ROOMS EXPENSE


Food and Beverage Food expenses consist of items necessary for the primary operation of a hotel's food
Expense and banquet facilities. The costs associated with food sales and payroll are
moderately to highly correlated to food revenues. Items such as china, linen, and
uniforms are less dependent on volume. Although the other expense items are
basically fixed, they represent a relatively insignificant factor. Beverage expenses
consist of items necessary for the operation of a hotel’s lounge and bar areas. The
costs associated with beverage sales and payroll are moderately to highly correlated
to beverage revenues.
FIGURE 7-10 FOOD AND BEVERAGE EXPENSE


Other Operated Other operated departments expense includes all expenses reflected in the
Departments Expense summary statements for the divisions associated in these categories, as discussed
previously in this chapter.
FIGURE 7-11 OTHER OPERATED DEPARTMENTS EXPENSE


Per Ava i l a bl e Room $639 $1,426 $181 $2,820 $217 $1,112 $1,040

Administrative and Administrative and general expense includes the salaries and wages of all
General Expense administrative personnel who are not directly associated with a particular
department. Expense items related to the management and operation of the
property are also allocated to this category.
Most administrative and general expenses are relatively fixed. The exceptions are
cash overages and shortages; commissions on credit card charges; provision for
doubtful accounts, which are moderately affected by the number of transactions or
total revenue; and salaries, wages, and benefits, which are very slightly influenced
by volume.
FIGURE 7-12 ADMINISTRATIVE AND GENERAL EXPENSE


Information and Information and telecommunications systems expense consists of all costs
Telecommunications associated with a hotel’s technology infrastructure. This includes the costs of cell
Systems Expense phones, administrative call and Internet services, and complimentary call and
Internet services. Expenses in this category are typically organized by type of
technology or the area benefiting from the technology solution.
Marketing Expense Marketing expense consists of all costs associated with advertising, sales, and
promotion; these activities are intended to attract and retain customers. Marketing
can be used to create an image, develop customer awareness, and stimulate
patronage of a property's various facilities.
The marketing category is unique in that all expense items, with the exception of
fees and commissions, are totally controlled by management. Most hotel operators
establish an annual marketing budget that sets forth all planned expenditures. If the
budget is followed, total marketing expenses can be projected accurately.
Marketing expenditures are unusual because, although there is a lag period before
results are realized, the benefits are often extended over a long period. Depending
on the type and scope of the advertising and promotion program implemented, the
lag time can be as short as a few weeks or as long as several years. However, the
favorable results of an effective marketing campaign tend to linger, and a property
often enjoys the benefits of concentrated sales efforts for many months.

FIGURE 7-13 MARKETING EXPENSE


Franchise Fee We recommend that the proposed subject hotel operate as an upscale, select-service
property. We have placed heavy consideration on the following brands: Hilton
Garden Inn, AC Hotels by Marriott, Aloft Hotels, Even Hotels, Hyatt Place, Radisson
Red, and Cambria Inn & Suites. Although a specific franchise affiliation and/or brand
has yet to be finalized, based upon a review of several published franchise fees for
brands that fall within the recommended product tier, we have selected a total
franchise fee of 8.5% of rooms revenue in order to estimate the cost of a national
franchise.
Marketing expense and franchise fees are often analyzed in total because hotels may
account for some components of franchise expense in the marketing expense
category. The subject property’s total marketing and franchise expense has been
forecast at 11.7% of total revenue on a stabilized basis; the comparable operating
statements show a range from 7.3% to 14.1% of total revenue.
Property Operations Property operations and maintenance expense is another expense category that is
and Maintenance largely controlled by management. Except for repairs that are necessary to keep the
facility open and prevent damage (e.g., plumbing, heating, and electrical items),
most maintenance can be deferred for varying lengths of time.
Maintenance is an accumulating expense. If management elects to postpone

performing a required repair, the expenditure has not been eliminated, only
deferred until a later date. A lodging facility that operates with a lower-than-normal
maintenance budget is likely to accumulate a considerable amount of deferred
maintenance.
The age of a lodging facility has a strong influence on the required level of
maintenance. A new or thoroughly renovated property is protected for several years
by modern equipment and manufacturers' warranties. However, as a hostelry
grows older, maintenance expenses escalate. A well-organized preventive
maintenance system often helps delay deterioration, but most facilities face higher
property operations and maintenance costs each year, regardless of the occupancy
trend. The quality of initial construction can also have a direct impact on future
maintenance requirements. The use of high-quality building materials and

construction methods generally reduces the need for maintenance expenditures
over the long term.
Changes in this expense item through the projection period result from the
application of the underlying inflation rate and projected changes in occupancy.
FIGURE 7-14 PROPERTY OPERATIONS AND MAINTENANCE EXPENSE


Utilities Expense The utilities consumption of a lodging facility takes several forms, including water
and space heating, air conditioning, lighting, cooking fuel, and other miscellaneous
power requirements. The most common sources of hotel utilities are electricity,
natural gas, fuel oil, and steam. This category also includes the cost of water service.
Total energy cost depends on the source and quantity of fuel used. Electricity tends
to be the most expensive source, followed by oil and gas. Although all hotels
consume a sizable amount of electricity, many properties supplement their utility
requirements with less expensive sources, such as gas and oil, for heating and
cooking. The changes in this utilities line item through the projection period are a
result of the application of the underlying inflation rate and projected changes in
occupancy.
FIGURE 7-15 UTILITIES EXPENSE


Management Fee Management expense consists of the fees paid to the managing agent contracted to
operate the property. Some companies provide management services and a brand-
name affiliation (first-tier management company), while others provide
management services alone (second-tier management company). Some
management contracts specify only a base fee (usually a percentage of total

revenue), while others call for both a base fee and an incentive fee (usually a
percentage of defined profit). Basic hotel management fees are often based on a
percentage of total revenue, which means they have no fixed component. While base
fees typically range from 2% to 4% of total revenue, incentive fees are deal specific
and often are calculated as a percentage of income available after debt service and,
in some cases, after a preferred return on equity. Total management fees for the
proposed subject hotel have been forecast at 3.0% of total revenue.
Property Taxes Property (or ad valorem) tax is one of the primary revenue sources of
municipalities. Based on the concept that the tax burden should be distributed in
proportion to the value of all properties within a taxing jurisdiction, a system of
assessments is established. Theoretically, the assessed value placed on each parcel
bears a definite relationship to market value, so properties with equal market values
will have similar assessments and properties with higher and lower values will have
proportionately larger and smaller assessments.
Depending on the taxing policy of the municipality, property taxes can be based on
the value of the real property or the value of the personal property and the real
property. We have based our estimate of the proposed subject property's market
value (for tax purposes) on an analysis of assessments of comparable hotel
properties in the local municipality.

FIGURE 7-16 COUNTY-ASSESSED VALUE OF COMPARABLE HOTELS
Hotel Year Open Land Improvements Personal Total
Hampton Inn a nd Sui tes Cl ayton Sai nt Loui s Ga l l eri a Area 1964 $568,320 $2,895,136 $84,604 $3,548,060
Courtya rd by Ma rri ott St Loui s Brentwood 2019 327,680 1,983,744 660 2,312,084
Spri ngHil l Sui tes by Marri ott St Loui s Brentwood 2008 124,896 2,813,024 48,690 2,986,610
Seven Gabl es Inn Sa i nt Loui s 1986 259,200 699,552 33,800 992,552
Ri tz Carl ton Sa i nt Loui s 1990 3,125,856 16,100,704 912,565 20,139,125
Cl a yton Pl a za 1967 912,000 1,625,632 88,960 2,626,592
Shera ton Cl a yton Pl a za Sa int Loui s 1964 1,381,664 5,698,208 794,730 7,874,602
Homewood Sui tes by Hi l ton St. Loui s Ga ll eri a 2009 220,000 4,477,120 17,690 4,714,810
Res i dence Inn by Marri ott St Loui s Gal l eri a 1986 682,464 1,570,464 150,934 2,403,862
Hi lton Sai nt Loui s Frontena c 1970 1,775,904 6,603,008 383,350 8,762,262
Assessments per Room # of Rms

Hampton Inn a nd Sui tes Cl ayton Sai nt Loui s Ga l l eri a Area 106 $5,362 $27,313 $798 $32,674
Courtya rd by Ma rri ott St Loui s Brentwood 141 2,324 14,069 5 16,393
Spri ngHil l Sui tes by Marri ott St Loui s Brentwood 123 1,015 22,870 396 23,886
Seven Gabl es Inn Sa i nt Loui s 32 8,100 21,861 1,056 29,961
Ri tz Carl ton Sa i nt Loui s 300 10,420 53,669 3,042 64,089
Cl a yton Pl a za 242 3,769 6,717 368 10,486
Shera ton Cl a yton Pl a za Sa int Loui s 259 5,335 22,001 3,068 27,335
Homewood Sui tes by Hi l ton St. Loui s Ga ll eri a 158 1,392 28,336 112 29,729
Res i dence Inn by Marri ott St Loui s Gal l eri a 152 4,490 10,332 993 14,822
Positioned Subject - Per Room 165 $4,500 $28,000 $2,000 $34,500

Positioned Subject - Total $742,500 $4,620,000 $330,000 $5,692,500
Source: Sa i nt Louis County
We have positioned the future assessment levels of the subject site and proposed
improvements, as well as the planned personal property, based upon the illustrated
comparable data. We have positioned these assessments closest to the Hampton Inn
& Suites Clayton/St. Louis Galleria because of the similarities in location, service-
level, and product, which was updated in 2014; overall, the positioned assessments
are well supported by the market data.
Tax rates are based on the city and county budgets, which change annually. The
most recent tax rate in this jurisdiction was reported at 10.06410%. The following
table shows changes in the tax rate during the last several years.

FIGURE 7-17 COUNTY TAX RATES
Real Property Personal Property

Year Tax Rate Tax Rate
2016 10.00280 7.66910

2017 9.52890 7.60820
2018 9.46730 7.59650
2019 10.06410 7.99460
Source: Sa i nt Louis County
Based on comparable assessments and the tax rate information, the proposed
subject property's projected property tax expense levels are calculated as follows.
FIGURE 7-18 PROJECTED PROPERTY TAX BURDEN (BASE YEAR)
Real Property Personal

Land Real Property Total Property
Pos i ti oned (As s es s ed Va l ue) $742,500 $4,620,000 $5,362,500 $330,000
Ta x Ra te 10.06410 7.99460
Ta x Burden a s of Ba s e Yea r $539,687 $26,382
FIGURE 7-19 PROJECTED PROPERTY TAX EXPENSE – REAL PROPERTY
Real Property
Total Tax Burden Base Rate of Tax % Positioned Taxes
Year (Positioned Prior to Increase) Burden Increase Tax Burden Payable
Pos i ti oned $539,687 — $539,687

2022 $539,687 8.2 % 100 % $584,019
2023 584,019 3.0 100 $601,540
2024 601,540 3.0 100 $619,586
2025 619,586 3.0 100 $638,174

FIGURE 7-20 PROJECTED PROPERTY TAX EXPENSE – PERSONAL PROPERTY
Personal Property
Personal Tax Burden Base Rate of Tax % of Positioned Taxes
Year (Positioned Prior to Increase) Burden Increase Tax Burden Payable
Pos i ti oned $26,382 — $26,382

2022 $26,382 8.2 % 100 % $28,549
2023 28,549 3.0 100 $29,406
2024 29,406 3.0 100 $30,288
2025 30,288 3.0 100 $31,197
FIGURE 7-21 PROJECTED PROPERTY TAX EXPENSE – SUMMARY
Taxes Payable Total Tax

Year Real Personal Total Payable
Pos i ti oned $539,687 $26,382 $566,070 $566,070

2022 $584,019 $28,549 $612,569 $612,569
2023 $601,540 29,406 630,946 $630,946
2024 $619,586 30,288 649,874 $649,874
2025 $638,174 31,197 669,370 $669,370
Insurance Expense The insurance expense category consists of the cost of insuring the hotel and its
contents against damage or destruction by fire, weather, sprinkler leakage, boiler
explosion, plate glass breakage, and so forth. General insurance costs also include
premiums relating to liability, fidelity, and theft coverage.
Insurance rates are based on many factors, including building design and
construction, fire detection and extinguishing equipment, fire district, distance from
the firehouse, and the area's fire experience. Insurance expenses do not vary with
occupancy.

FIGURE 7-22 INSURANCE EXPENSE


Per Ava i l a bl e Room $662 $409 $189 $457 $348 $487 $450
Reserve for Furniture, fixtures, and equipment are essential to the operation of a lodging facility,
Replacement and their quality often influences a property's class. This category includes all non-
real estate items that are capitalized, rather than expensed. The furniture, fixtures,
and equipment of a hotel are exposed to heavy use and must be replaced at regular
intervals. The useful life of these items is determined by their quality, durability, and
the amount of guest traffic and use.
Periodic replacement of furniture, fixtures, and equipment is essential to maintain

the quality, image, and income-producing potential of a lodging facility. Because
capitalized expenditures are not included in the operating statement but affect an
owner's cash flow, a forecast of income and expense should reflect these expenses
in the form of an appropriate reserve for replacement.
The International Society of Hospitality Consultants (ISHC) oversees a major

industry-sponsored study of the capital expenditure requirements for full-
service/luxury, select-service, and extended-stay hotels. The most recent study was
published in 2014.7 Historical capital expenditures of well-maintained hotels were
investigated through the compilation of data provided by most of the major hotel
companies in the United States. A prospective analysis of future capital expenditure
requirements was also performed based upon the cost to replace short- and long-
lived building components over a hotel's economic life. The study showed that the
capital expenditure requirements for hotels vary significantly from year to year and
depend upon both the actual and effective ages of a property. The results of this
study showed that hotel lenders and investors are requiring reserves for
replacement ranging from 4% to 5% of total revenue.
Based upon the results of our analysis, our review of the proposed subject asset, and
current industry norms, a reserve for replacement equal to 4% of total revenues has
been factored into our forecast of revenue and expense for funding the periodic
7 The International Society of Hotel Consultants, CapEx 2014, A Study of Capital

Expenditure in the U.S. Hotel Industry.

replacement of the proposed subject property's furniture, fixtures, and equipment.
This amount has been ramped up during the initial projection period.
Forecast of Revenue Projected total revenue, house profit, and EBITDA Less Replacement Reserve are
and Expense set forth in the following table.
Conclusion
FIGURE 7-23 FORECAST OF REVENUE AND EXPENSE CONCLUSION
Total Revenue House Profit House EBITDA Less Replacement Reserve

% Profit As a % of
Year Total Change Total % Change Ratio Total % Change Ttl Rev
Projected 2022 $7,243,000 — $3,085,000 — 42.6 % $2,030,000 — 28.0 %

2023 8,349,000 15.3 % 3,851,000 24.8 % 46.2 2,636,000 29.9 % 31.6
2024 8,896,000 6.6 4,165,000 8.2 46.7 2,808,000 6.5 31.4
2025 9,164,000 3.0 4,291,000 3.0 46.7 2,892,000 3.0 31.4
2026 9,439,000 3.0 4,419,000 3.0 46.7 2,979,000 3.0 31.4

8. Feasibility Analysis
Return on investment can be defined as the future benefits of an income-producing

property relative to its acquisition or construction cost. The first step in performing
a return-on-investment analysis is to determine the amount to be initially invested.
For a proposed property, this amount is most likely to be the development cost of
the hotel. Based on the total development cost, the individual investor will utilize a
return-on-investment analysis to determine if the future cash flow from a current
cash outlay meets his or her own investment criteria and at what level above or
below this amount such an outlay exceeds or fails to meet these criteria.
As an individual or company considering investment in hotel real estate, the

decision to use one’s own cash, an equity partner's capital, or lender financing will
be an internal one. Because hotels typically require a substantial investment, only
the largest investors and hotel companies generally have the means to purchase
properties with all cash. We would anticipate the involvement of some financing by
a third party for the typical investor or for those who may be entering the market
for hotel acquisitions at this time. In leveraged acquisitions and developments
where investors typically purchase or build upon real estate with a small amount of
equity cash (20% to 50%) and a large amount of mortgage financing (50% to 80%),
it is important for the equity investor to acknowledge the return requirements of
the debt participant (mortgagee), as well as his or her own return requirements.
Therefore, we will begin our rate-of-return analysis by estimating construction
costs and then reviewing the debt requirements of typical hotel mortgagees.
Construction Cost We have developed an estimate of the total development costs, which includes hard
Estimate costs, FF&E, soft costs, pre-opening costs, and working capital, as well as the
developer's fee and an allocation of land cost. Our development cost estimate is
supported by actual cost comparables and the annual HVS Development Cost
Survey. We recommend that the development team obtain a more detailed
development cost estimate from actual construction companies. It is also advised
that developers consult more than one source in their hotel development process to
more accurately assess the true cost of development.
Development Cost As a basis for estimating the development costs, we have used a hotel development
cost survey conducted by HVS. The survey presents the range of per-room costs
associated with various components of hotel development, including
improvements, furniture, and equipment; pre-opening expenses; and operating
capital. Statistics are compiled for budget hotels, midscale hotels with and without
food and beverage, extended-stay hotels, full-service hotels, and luxury hotels and
January-2020 Feasibility Analysis

resorts. The results of the development cost survey are presented in the following
table.

FIGURE 8-1 HOTEL DEVELOPMENT COST SURVEY (AMOUNTS PER ROOM)
Building and Site Pre-Opening and

Land Improvements Soft Costs FF&E Working Capital Total
2015/16
Budget/Economy Hotels $6,500 - $31,200 $41,500 - $103,700 $1,200 - $13,400 $5,400 - $17,900 $1,400 - $7,100 $54,000 - $166,200
Midscale Hotels w/o F&B 7,600 - 73,100 57,700 - 132,000 2,300 - 63,000 6,600 - 28,200 2,800 - 26,500 73,500 - 208,500
Extended-Stay Hotels 10,000 - 47,600 71,700 - 168,200 2,600 - 86,700 8,300 - 25,800 2,900 - 26,100 91,900 - 264,700
Midscale Hotels w/ F&B 10,000 - 68,100 88,600 - 187,300 3,800 - 53,000 10,900 - 39,200 3,500 - 19,500 111,000 - 355,100
Full-Service Hotels 23,600 - 124,900 139,000 - 408,900 4,700 - 99,300 23,200 - 57,900 14,000 - 88,100 206,000 - 769,100
Luxury Hotels and Resorts 45,700 - 266,800 234,400 - 635,300 24,300 - 120,400 37,900 - 129,300 19,100 - 83,000 513,600 - 1,005,500
Source: HVS

In addition to the survey data, we have also reviewed a selection of cost budgets
from developers of comparable proposed hotels, as illustrated in the following table.
FIGURE 8-2 COMPARABLE COST BUDGETS
Comp #1 Comp #2 Comp #3 Comp #4

Primary, MN Secondary, IN Primary, MO Primary, MO
Select-Service Select-Service Select-Service Limited-Service
Approx. 190 Rooms Approx. 120 Rooms Approx. 190 Rooms Approx. 140 Rooms
Item Per Room % of Total Per Room % of Total Per Room % of Total Per Room % of Total
Bui ldi ng $188,081 73.9 % $134,911 79.0 % $143,475 66.6 % $126,794 67.2 %
Soft Cos ts 32,681 12.8 7,345 4.3 33,083 15.4 28,930 15.3
Furni ture, Fi xtures , & Equi pment 20,903 8.2 20,672 12.1 23,902 11.1 20,158 10.7
Pre-Openi ng Cos ts & Worki ng Ca pi ta l 12,795 5.0 2,542 1.5 6,251 2.9 6,074 3.2
Devel oper Fee (i f Appl i ca bl e) 0 0.0 5,323 3.1 8,594 4.0 6,618 3.5
Tota l (Excludi ng Si te Cos t) $254,459 94.5 % $170,792 89.1 % $215,304 92.2 % $188,574 93.6 %
Si te Cos t $14,730 5.5 % $20,875 10.9 % $18,229 7.8 % $12,868 6.4 %

Total (Including Site Cost) $269,189 100.0 % $191,667 100.0 % $233,533 100.0 % $201,441 100.0 %
Building and Site Building and site improvements include all buildings and other relatively
Improvements permanent structures located on, or attached to, the subject parcel. The cost of the
improvements includes costs of materials, fees, and labor to construct the subject
property’s improvements. We estimate the replacement cost of the proposed
subject property's improvements to be roughly $135,000 per room, or a total of
$22,275,000.
Furniture, Fixtures and Furniture, fixtures, and equipment (FF&E) include all non-permanent, removable
Equipment items at the subject property, such as guestroom furnishings, kitchen equipment,
and items of décor. The cost of the FF&E, along with all fees associated with the
installation of such items, comprise the total cost of FF&E. Based on our
understanding of the expected quality of furnishings, we have estimate the
replacement cost of the proposed subject property's FF&E (as if new) at
approximately $20,000 per room, or a total of $3,300,000.
Pre-Opening and Pre-opening costs include expenses such as marketing, staffing, training, and
Working Capital Costs administrative expenditures. Working capital includes a working capital reserve to
maintain adequate cash flow until the operation reaches a break-even point. We
estimate the pre-opening costs for the proposed subject property to be roughly
$5,000 per room, or a total of $825,000.
Soft Costs Soft costs include items other than labor and material that are necessary for
construction but are not typically part of the construction contract. Soft costs can

include professional fees, financing costs and the interest paid on construction
loans, taxes and the builder’s or developer’s all-risk insurance during construction,
marketing, sales, and lease-up costs incurred to achieve occupancy or sales. We
estimate the amount of soft costs for the proposed subject property to be
approximately $30,000 per room, or a total of $4,950,000.
Developer’s Fee The developer’s fee represents a recovery of costs to the project developer,
including salaries, travel, administrative costs, and other expenses related to
coordinating the development. It is separate from a developer’s anticipated profit
or entrepreneurial incentive. The developer’s fee is typically dependent upon the
complexity of project coordination and the length of the development timeline. In
the case of relatively simple projects in markets with low barriers to entry, a
developer’s fee may not be considered, whereas complicated projects in high-
barrier-to-entry markets may incur more substantial costs for coordination and
administration during an extended planning and construction period. In some cases,
the developer’s administrative costs are included within other line times, rather
than allocated to an individual developer’s fee line item. We estimate the
developer’s fee for the proposed subject property to be approximately $5,000 per
room, equating to 2.4% of the project cost.
Cost Summary Based on the preceding analysis, we estimate the replacement cost of the proposed
subject property as follows.
FIGURE 8-3 COST SUMMARY
Item Cost per Room Cost

Bui l di ng $135,000 $22,275,000
Soft Cos ts 30,000 4,950,000
Furni ture, Fi xtures , & Equi pment 20,000 3,300,000
Pre-Openi ng Cos ts & Worki ng Ca pi ta l 5,000 825,000
Devel oper Fee (i f Appl i ca bl e) 5,000 825,000
Total Replacement Cost $195,000 $32,175,000
The following table presents a comparison of this budget to the comparable cost
budgets presented previously.

FIGURE 8-4 SUBJECT COST VS COMPABLE BUDGETS
Minimum Maximum Average Subject Property

Item Per Room % of Total Per Room % of Total Per Room % of Total Per Room % of Total
Bui l di ng $126,794 66.6 % $188,081 79.0 % $148,315 71.7 % $135,000 63.5 %
Soft Cos ts 7,345 4.3 33,083 15.4 25,510 12.0 30,000 14.1
Furni ture, Fi xtures, & Equi pment 20,158 8.2 23,902 12.1 21,409 10.5 20,000 9.4
Pre-Openi ng Costs & Worki ng Capi ta l 2,542 1.5 12,795 5.0 6,915 3.2 5,000 2.4
Devel oper Fee (i f Appl i ca bl e) 0 0.0 8,594 4.0 6,845 2.7 5,000 2.4
Tota l (Excl udi ng Si te Cos t) $170,792 89.1 % $254,459 94.5 % $207,282 93.6 % $195,000 91.7 %
Si te Cos t $12,868 5.5 % $20,875 10.9 % 16,675 7.6 % $17,576 8.3 %
Total (Including Site Cost) $191,667 $269,189 $223,958 $212,576 100.0 %
Land Allocation A portion of the overall development cost includes the cost of the land. The range of
per-room land cost was illustrated in the previously presented cost-survey data;
land cost typically ranges from 5% to 20% of overall development cost but may be
substantially higher for premium locations in markets with high barriers to entry.
The portion of a hotel’s overall net income that can be attributed to the land, like a
ground-lease payment, is directly correlated to the cost or value of the site. Using
the forecasted revenues for the proposed subject hotel and applying a typical hotel
ground-lease rental formula, we can determine the income attributed to the land.
The land cost can then be estimated by capitalizing the hypothetical ground rent.
The self-adjusting aspect of this approach is a key element to its reliability.
Hotels are often constructed on leased land. While the lease terms differ somewhat
from property to property, the basis for the rental calculation is often tied to a
percentage-of-revenue formula. We have researched actual long-term ground
leases encumbering hotels. The following table summarizes our findings, showing
the property, its room count, and its rental formula.

FIGURE 8-5 SUMMARY OF HOTEL GROUND LEASES
Rental Based on
Year 1 Revenue of the
165-Unit Subject Property
Percentage Percentage
Number of Dollar of Rooms of Total
Hotel City ST Rooms Ground Lease Formula Amount (+000) Revenue Revenue
Commons Hotel Mi nnea pol i s MN 304 1% of gros s rooms revenue a nd other commerci a l s pa ce renta l a nd 0.5% $71 1.0 % 0.9 %
of food a nd beverage revenue s ubject to a mi ni mum of $96,000 per
yea r.
Marri ott Hotel Overl a nd Pa rk KS 404 3% of rooms revenue, a ga i nst a s ma l l mi ni mum 204 3.0 2.6
Ameri star Counci l Counci l Bl uffs IA 160 5,000 i n monthl y i ns tal l ments pl us 5% of the a nnua l gros s s al es 387 5.7 5.0
Bl uffs
Marri ott Hotel Tul sa OK 338 3% of rooms revenue, a ga i nst a s ma l l mi ni mum 204 3.0 2.6
Hya tt Hous e Ri chmond VA 134 4.5% Gros s Rooms Revenue 305 4.5 3.9
Ri chmond
Fa i rfi el d Inn Indi ana pol i s IN 86 From 1994 38,000 a nnua l l y unti l 1995, then 58,000 unti l 2000, then 155 2.3 2.0
a djus ted by the a vera ge mi ni mum rental mul ti pl i ed by 50% of the CPI or
80% of the a vera ge a ctual a nnua l renta l pa i d duri ng such previ ous fi ve-
yea r peri od. The percenta ge us ed to determi ne renta l i n a ny fi s cal yea r
s ha l l be a s fol l ows : 1989-1994 2.0%, 1995-2002 2.0%, 2003-2088 2.0% of
gros s room revenue.
Meri di en Hotel New Orl ea ns LA 505 Greater of 2.5% of rooms or 1.25% of tota l revenue 170 2.5 2.2
Fa i rfi el d Inn Kans a s Ci ty KS 135 From 1994 48,000 a nnua l l y unti l 1995, then 54,000 unti l 2000, then 339 5.0 4.4
Wes t a djus ted by the a vera ge mi ni mum rental mul ti pl i ed by 50% of the CPI or
80% of the a vera ge a ctual a nnua l renta l pa i d duri ng such previ ous fi ve-
yea r peri od. The percenta ge us ed to determi ne renta l i n a ny fi s cal yea r
s ha l l be a s fol l ows : 1989-1994 3.0%, 1995-2002 3.0%, 2003-2088 5.0% of
gros s room revenue.
Hol i da y Inn San Antoni o TX 313 2.5% of rooms revenue, 1% of food and beverage revenue, and 2% of 183 2.7 2.4
Ri verwa l k other i ncome

Our analysis of these ground-lease rental formulas indicates that economic ground
rents for hotels such as the proposed subject hotel typically range from
approximately 2% to 5% of rooms revenue. Hotels with a significant amount of land
relative to the property’s room count, hotels in resort areas, or hotels in land-sparse
downtown markets may command higher ground rent.
Based on the revenue projections set forth for the proposed subject hotel as part of
this feasibility study, the following table shows how the economic ground rent has
been calculated. Note that the stabilized revenue level has been deflated back to
first-projection-year dollars.
Defl a ted Sta bi l i zed Rooms Revenue $6,958,000

Renta l Percenta ge 2.5 %
Economic Ground Rent $173,950
Rent generated from an unsubordinated ground lease represents a low-risk flow of

income. Because the tenant improvements typically amount to more than five times
the value of the land, the risk of default is almost nonexistent. For hotel ground
leases where rent is tied to revenue, the property owner is also protected from the
adverse effects of inflation. Based on these minimal risk factors and the current cost
of long-term capital, it is our opinion that the appropriate overall capitalization rate
would be as indicated in the following table because of the low level of risk.
Applying the indicated capitalization rate to the proposed subject hotel's economic
ground rent results in the following estimate of land cost.
Economi c Ground Rent $173,950

= = $2,899,167
Ca pi ta l i za ti on Ra te 6.0 %
This indicates an estimated land cost of $2,900,000, or $44.40 per square foot, for
the proposed subject hotel.
Conclusion In the estimation of development cost for the proposed improvements, the costs of
several components of the total property were quantified. The development cost
was estimated based on a hotel development cost survey conducted by HVS. The
following table summarizes our estimate of the total cost to develop the proposed
subject property.

FIGURE 8-6 RECAP OF TOTAL COST ESTIMATE
Item Cost per Room Cost

Bui l di ng $135,000 $22,275,000
Soft Cos ts 30,000 4,950,000
Furni ture, Fi xtures , & Equi pment 20,000 3,300,000
Pre-Openi ng Cos ts & Worki ng Ca pi ta l 5,000 825,000
Devel oper Fee (i f Appl i ca bl e) 5,000 825,000
La nd 17,576 2,900,000
Entrepreneuri a l Incenti ve 0 0
Total Cost New Estimate (Rounded) $212,121 $35,000,000
This estimate has been rounded to $35,000,000.
Mortgage Component Hotel financing is available for most tiers of the lodging industry from a variety of
lender types. While many lenders remain active, underwriting standards are more
stringent than several years ago, and loan-to-value ratios remain in the 60% to 70%
range. Lenders continue to be attracted to the lodging industry because of the higher
yields generated by hotel financing relative to other commercial real estate.
Commercial banks, mortgage REITs, private-debt investors, insurance companies,
and CMBS and mezzanine lenders continue to pursue deals.
Data for the mortgage component may be developed from statistics of actual hotel
mortgages made by long-term lenders. The American Council of Life Insurance,
which represents 20 large life insurance companies, publishes quarterly
information pertaining to the hotel mortgages issued by its member companies.
Because of the six- to nine-month lag time in reporting and publishing hotel
mortgage statistics, it was necessary to update this information to reflect current
lending practices. Our research indicates that the greatest degree of correlation
exists between the average interest rate of a hotel mortgage and the concurrent
yield on an average-A corporate bond.
The following chart summarizes the average mortgage interest rates of the hotel
loans made by these lenders. For the purpose of comparison, the average-A
corporate bond yield (as reported by Moody's Bond Record) is also shown.

FIGURE 8-1 AVERAGE MORTGAGE INTEREST RATES AND AVERAGE-A
CORPORATE BOND YIELDS
9.0
8.0
7.0
Rate (%)
6.0
5.0
4.0
3.0
2010 - 4th
2011 - 4th
2012 - 4th
2013 - 4th
2014 - 4th
2015 - 4th
2016 - 4th
2017 - 4th
2018 - 4th
2010 - 2nd
2011 - 2nd
2012 - 2nd
2013 - 2nd
2014 - 2nd
2015 - 2nd
2016 - 2nd
2017 - 2nd
2018 - 2nd
2019 - 2nd
Avg. Interest Rate (%) Avg. A Corp. Bond Yield (%)
Sources: American Council of Life Insurance, Moody's Bond Record, HVS
The relationship between hotel interest rates and the yields from the average-A
corporate bond can be detailed through a regression analysis, which is expressed as
follows.
Y = 0.95633038 X + 0.76820181
Where: Y = Estimated Hotel Mortgage Interest Rate

X = Current Average-A Corporate Bond Yield
(Coefficient of correlation is 95%)
The January 30, 2020, average yield on average-A corporate bonds, as reported by
Moody’s Investors Service, was 3.13%. When used in the previously presented
equation, a factor of 3.13 produces an estimated hotel/motel interest rate of 3.76%
(rounded).
Financing for hotel debt is readily available at relatively low rates from a variety of
lender types (e.g., CMBS, balance-sheet lenders, insurance companies, SBA lenders,
and other sources). The most prevalent interest rates for single hotel assets are
currently ranging from 3.25% to 5.5%, depending on the type of debt, loan-to-value
ratio, and the quality of the asset and its market.

In addition to the mortgage interest rate estimate derived from this regression
analysis, HVS constantly monitors the terms of hotel mortgage loans made by our
institutional lending clients. Fixed-rate debt is being priced at roughly 150 to 350
basis points over the corresponding yield on treasury notes. As of January 30, 2020,
the yield on the ten-year T-bill was 1.65%, indicating an interest rate range from
3.2% to 5.2%. The federal funds rate peaked most recently in December 2018, after
three 25-basis-point increases by the Fed that year. The Fed began to cut rates in
August 2019 for the first time since 2008, primarily due to the global economic
slowdown and concern about the impact of the trade wars; it has subsequently cut
rates two more times, reducing the Fed’s target rate to its current level of 1.5% to
1.75% (where it was in March 2018). With slowing GDP growth, lower interest rates
bode well for the cost of debt capital for hotel investors. Slowing RevPAR growth
and rising operating expenses continue to put pressure on NOI growth, moderating
equity yields. At present, we find that lenders that are active in the market are using
loan-to-value ratios of 60% to 70%, and amortization periods of 20 to 30 years.
Loan-to-value ratios in 2020 are not as robust as those from a few years ago when
ratios as high as 75% were available.
Based on our analysis of the current lodging industry mortgage market and
adjustments for specific factors, such as the property’s site, proposed facility, and
conditions in the University City hotel market, it is our opinion that a 4.00% interest,
30-year amortization mortgage with a 0.057290 constant is appropriate for the
proposed subject hotel. In the mortgage-equity analysis, we have applied a loan-to-
cost ratio of 65%, which is reasonable to expect based on this interest rate and
current parameters.
Equity Component The remaining capital required for a hotel investment generally comes from the
equity investor. The rate of return that an equity investor expects over a ten-year
holding period is known as the equity yield. Unlike the equity dividend, which is a
short-term rate of return, the equity yield specifically considers a long-term holding
period (generally ten years), annual inflation-adjusted cash flows, property
appreciation, mortgage amortization, and proceeds from a sale at the end of the
holding period. To establish an estimate of the equity yield rate that a typical
investor would require, we have used two sources of data: past appraisals and
investor interviews.
Hotel Sales: Each appraisal performed by HVS uses a mortgage-equity approach in

which income is projected and then discounted to a current value at rates reflecting
the cost of debt and equity capital. In the case of hotels that were sold near the date
of our valuation, we were able to derive the equity yield rate and unlevered discount
rate by inserting the ten-year projection, total investment (purchase price and
estimated capital expenditure and/or PIP), and debt assumptions into a valuation
model and solving for the equity yield. The overall capitalization rates for the

historical income and projected first-year income are based on the sales price “as
is.” The following table shows a representative sample of hotels that were sold on
or about the time that we appraised them, along with the derived equity return and
discount rates based on the purchase price and our forecast.

FIGURE 8-2 SAMPLE OF HOTELS SOLD
Overall Rate
Based on Sales Price
Total
Number Date Property Equity Historical Projected
Hotel Location of Rooms of Sale Yield Yield Year Year One
Home2 Suites by Hil ton Al exa ndria Al exa ndria , LA 89 Oct-19 11.7 % 21.4 % 9.9 % 9.6 %
Courtya rd by Ma rriott SoHo New York, NY 120 Oct-19 9.3 16.1 5.5 5.5
Ha mpton Inn Sierra Vi s ta Sierra Vi s ta , AZ 58 Aug-19 11.9 20.5 6.7 9.7
Hotel Med Pa rk, As cend Col l ecti on Sa cra mento, CA 32 Aug-19 9.7 16.9 3.4 6.9
Courtya rd by Ma rriott Hous ton Pea rl a nd, TX 110 Jun-19 10.4 17.2 7.6 7.5
Ha mpton Inn Roches ter Roches ter, MN 103 Jun-19 10.3 17.1 7.6 8.5
Al oft Atla nta Downtown Atla nta , GA 254 Jun-19 8.9 16.1 6.7 6.9
Courtya rd by Ma rriott Berkel ey Ri chmond, CA 149 Ma y-19 10.1 17.4 5.8 7.9
Ha mpton Inn Atl a nta Ca nton, GA 81 Ma r-19 12.3 21.2 10.4 9.7
Ha mpton Inn Wa us a u, WI 87 Ma r-19 12.0 21.0 9.4 9.8
Ha mpton Inn & Sui tes Pinevi l l e, NC 111 Ma r-19 11.2 20.1 8.7 8.0
Townepl a ce Suites by Ma rri ott Greenvi l le , SC 94 Feb-19 11.6 20.2 12.2 11.7
Home2 Suites by Hil ton Pens a col a , FL 106 Feb-19 11.0 18.5 ‒ 8.9
Ha mpton Inn & Sui tes Tucs on, AZ 101 Dec-18 10.0 17.4 9.3 8.5
Home2 Suites By Hil ton I-65 Mobi l e, AL 105 Dec-18 11.1 19.4 ‒ 7.1
Ha mpton Inn & Sui tes Sa int Augus ti ne, FL 93 Dec-18 9.5 15.3 7.6 7.9
Ha mpton Inn & Sui tes McKi nney, TX 79 Oct-18 10.1 18.6 9.6 9.0
Ha mpton Inn & Sui tes Federa l Wa y, WA 142 Oct-18 9.6 16.0 8.1 8.1
Res i dence Inn by Ma rri ott Spri ngda le, AR 72 Sep-18 10.9 18.3 8.2 9.8
Hil ton Ga rden Inn Ta mpa Wes l ey Cha pel , FL 125 Sep-18 10.8 18.6 — 8.9
Hya tt Pl a ce Fa ir La wn, NJ 143 Aug-18 10.4 18.0 7.5 8.1
Hotel Indi go Tra vers e City, MI 107 Aug-18 10.9 17.8 8.8 8.2
Courtya rd by Ma rriott Fa rmington, NM 125 Aug-18 11.8 18.9 8.7 7.0
Courtya rd by Ma rriott Myrtl e Bea ch, SC 157 Jun-18 11.3 19.4 8.9 9.2
SpringHi l l Sui tes Fa irfa x, VA 140 Jun-18 9.3 17.9 6.7 7.0
Ha mpton Inn & Sui tes Ha rri s on, NJ 165 Ma y-18 10.1 18.1 7.9 7.1
Al oft Si l i con Va l ley Newa rk, CA 174 Ma y-18 10.0 17.0 7.3 7.6
SpringHi l l Sui tes Centrevi l le, VA 136 Ma y-18 10.3 18.6 7.3 8.0
Sta ybridge Suites Wil mi ngton, NC 93 Apr-18 11.5 21.4 9.6 9.6
Al oft Ha rl em New York, NY 124 Ma r-18 9.8 15.5 6.0 3.8
Ha mpton Inn Fina ncia l Dis tri ct New York, NY 81 Ma r-18 8.3 12.7 4.5 5.0
Res i dence Inn by Ma rri ott Sa cra mento, CA 126 Feb-18 10.5 18.9 8.7 9.6
Ha mpton Inn Denver Southwes t La kewood, CO 150 Feb-18 12.7 21.3 10.7 13.9
Hya tt Pl a ce Cha ndler, AZ 129 Ja n-18 9.4 15.7 7.5 6.8
Wyndha m Ga rden Greenvi l le , SC 139 Ja n-18 14.2 24.2 6.0 7.7
Ha mpton Inn Cincinna ti Fa irfiel d, OH 100 Ja n-18 12.2 20.9 10.5 10.7
Ha mpton Inn Atl a nta Coll ege Pa rk, GA 127 Ja n-18 9.3 15.0 10.1 10.0
Ha mpton Inn Atl a nta Northwes t Atla nta , GA 127 Ja n-18 14.9 26.1 11.0 10.0
Mi n: 8.3 % 12.7 % 3.4 % 3.8 %

Mea n: 10.8 18.5 8.1 8.4
Medi a n: 10.5 18.4 8.1 8.2
Ma x: 14.9 26.1 12.2 13.9
Source: HVS

Investor Interviews: During the course of our work, we continuously monitor
investor equity-yield requirements through discussions with hotel investors and
brokers. We find that equity yield rates currently range from a low in the low-to-
mid teens for high-barrier-to-entry "trophy assets"; the mid-to-upper teens for
high-quality, institutional-grade assets in strong markets; and the upper teens to
low 20s for quality assets in more typical markets. Equity yield rates tend to exceed
20% for aging assets with functional obsolescence and/or other challenging
property- or market-related issues. Equity return requirements also vary with an
investment’s level of leverage.
The following table summarizes the range of equity yields indicated by hotel sales
and investor interviews. We note that there tends to be a lag between the sales data
and current market conditions; thus, the full effect of the change in the economy and
capital markets may not yet be reflected.
FIGURE 8-3 SUMMARY OF EQUITY YIELD OR INTERNAL RATE OF RETURN

REQUIREMENTS
Source Data Point Range Average
HVS Hotel Sa l es - Ful l -Servi ce & Luxury 10.8% - 21.2% 16.8%

HVS Hotel Sa l es - Se l ect-Servi ce & Extended-Sta y 12.7% - 26.1% 18.5%
HVS Hotel Sa l es - Li mi ted-Servi ce 17% - 24.6% 19.8%
HVS Inves tor Intervi e ws 13% - 25%
Terminal Capitalization Inherent in this valuation process is the assumption of a sale at the end of the ten-
Rate year holding period. The estimated reversionary sale price as of that date is
calculated by capitalizing the projected eleventh-year net income by an overall
terminal capitalization rate. An allocation for the selling expenses is deducted from
this sale price, and the net proceeds to the equity interest (also known as the equity
residual) are calculated by deducting the outstanding mortgage balance from the
reversion.
We have reviewed several recent investor surveys. The following chart summarizes
the averages presented for terminal capitalization rates in various investor surveys
during the past decade.

FIGURE 8-4 HISTORICAL TRENDS OF TERMINAL CAPITALIZATION RATES
11.5
11.0
10.5
10.0
Terminal Cap Rate (%)
9.5
9.0
8.5
8.0
7.5
7.0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
PWC - Limited-Service
PWC - Select-Service
HVS Broker Survey - Limited-Service/Economy
HVS Broker Survey - Select-Service
USRC - Limited-Service
Situs RERC - Second Tier
Situs RERC - First Tier

FIGURE 8-5 TERMINAL CAPITALIZATION RATES DERIVED FROM INVESTOR
SURVEYS
Source Data Point Range Average
HVS Brokers Survey - Fall 2019

Li mi ted-Servi ce & Economy Hotel s 7.5% - 12.0% 9.3%
Sel ect-Servi ce Hote l s 7.5% - 12.0% 8.8%
PWC Real Estate Investor Survey - 3rd Quarter 2019

Li mi ted-Servi ce Hotel s 7.75% - 12.0% 9.5%
Sel ect-Servi ce Hote l s 7.0% - 10.0% 8.5%
USRC Hotel Investment Survey - Mid-Year 2019

Li mi ted-Servi ce Hotel s 8.5% - 9.8% 9.0%
Situs RERC Real Estate Report - 3rd Quarter 2019

Second Ti er Hote l s 7.3% - 11.0% 8.9%
Fi rs t Ti er Hotel s 6.0% - 10.0% 8.3%
For purposes of this analysis, we have applied a terminal capitalization rate of

8.00%. Our final position for the terminal capitalization rate reflects the current
market for hotel investments and also considers the subject property's attributes.
Terminal capitalization rates, in general, have remained stable over the past few
years. Terminal cap rates are at the low end of the range for quality hotel assets in
markets with high barriers to entry and at the high end of the range for older assets
or for those suffering from functional obsolescence and/or weak market conditions,
reflecting the market's recognition that certain assets have less opportunity for
significant appreciation.
Mortgage-Equity As the two participants in a real estate investment, investors and lenders must
Method evaluate their equity and debt contributions based on their particular return
requirements. After carefully weighing the risk associated with the projected
economic benefits of a lodging investment, the participants will typically make their
decision whether or not to invest in a hotel or resort by determining if their
investment will provide an adequate yield over an established period. For the
lender, this yield will typically reflect the interest rate required for a hotel mortgage
over a period that can range from seven to ten years. The yield to the equity
participant may consider not only the requirements of a particular investor but also
the potential payments to cooperative or ancillary entities, such as limited partner
payouts, stockholder dividends, and management company incentive fees.

The return-on-investment analysis in a hotel acquisition would not be complete
without recognizing and reflecting the yield requirements of both the equity and
debt participants. The analysis will now calculate the yields to the mortgage and
equity participants during a ten-year projection period.
The annual debt service is calculated by multiplying the mortgage component by the
mortgage constant.
Mortgage Component $22,744,000

Mortgage Constant 0.057290
Annual Debt Service $1,303,000
The yield to the lender based on a 65% debt contribution equates to an interest rate
of 4.00%, which is calculated as follows.
FIGURE 8-6 RETURN TO THE LENDER
Total Annual Present Worth of $1 Discounted

Year Debt Service Factor at 4.0% Cash Flow
2022 $1,303,000 x 0.961923 = $1,253,000

2023 1,303,000 x 0.925296 = 1,206,000
2024 1,303,000 x 0.890064 = 1,160,000
2025 1,303,000 x 0.856173 = 1,116,000
2026 1,303,000 x 0.823573 = 1,073,000
2027 1,303,000 x 0.792214 = 1,032,000
2028 1,303,000 x 0.762049 = 993,000
2029 1,303,000 x 0.733033 = 955,000
2030 1,303,000 x 0.705121 = 919,000
2031 19,222,000 * x 0.678272 = 13,038,000
Va l ue of Mortga ge Component $22,745,000

*10th year debt service of $1,303,000 plus outstanding mortgage balance of $17,919,000
The following table illustrates the cash flow available to the equity position, after
deducting the debt service from the projected net income.

FIGURE 8-7 NET INCOME TO EQUITY
Net Income
Available for Total Annual Net Income
Year Debt Service Debt Service to Equity
2022 $2,030,000 - $1,303,000 = $727,000

2023 $2,636,000 - 1,303,000 = $1,333,000
2024 $2,808,000 - 1,303,000 = $1,505,000
2025 $2,892,000 - 1,303,000 = $1,589,000
2026 $2,979,000 - 1,303,000 = $1,676,000
2027 $3,068,000 - 1,303,000 = $1,765,000
2028 $3,161,000 - 1,303,000 = $1,858,000
2029 $3,255,000 - 1,303,000 = $1,952,000
2030 $3,353,000 - 1,303,000 = $2,050,000
2031 $3,453,000 - 1,303,000 = $2,150,000
In order for the present value of the equity investment to equate to the $12,247,000
capital outlay, the investor must accept a 17.0% return, as shown in the following
table.
FIGURE 8-8 EQUITY COMPONENT YIELD
Net Income Present Worth of $1 Discounted

Year to Equity Factor at 17.0% Cash Flow
2022 $727,000 x 0.854700 = $621,000

2023 $1,333,000 x 0.730512 = 974,000
2024 $1,505,000 x 0.624369 = 940,000
2025 $1,589,000 x 0.533648 = 848,000
2026 $1,676,000 x 0.456109 = 764,000
2027 $1,765,000 x 0.389836 = 688,000
2028 $1,858,000 x 0.333193 = 619,000
2029 $1,952,000 x 0.284780 = 556,000
2030 $2,050,000 x 0.243402 = 499,000
2031 $27,582,000 * x 0.208035 = 5,738,000
Va l ue of Equi ty Component $12,247,000

*10th year net income to equity of $2,150,375 plus sales proceeds of $25,432,000
Conclusion In determining the potential feasibility of the Proposed Hotel University City, we
analyzed the lodging market, researched the area’s economics, reviewed the
estimated development cost, and prepared a ten-year forecast of income and

expense, which was based on our review of the current and historical market
conditions, as well as comparable income and expense statements.
The conclusion of this analysis indicates that an equity investor contributing

$12,247,000 (roughly 35% of the $35,000,000 development cost) could expect to
receive a 17.0% internal rate of return over a ten-year holding period, assuming that
the investor obtains financing at the time of the project’s completion at the loan-to-
value ratio and interest rate set forth. The proposed subject hotel will serve a
segment of business and leisure travelers that are not currently accommodated in
University City. Based on our market analysis, there is sufficient market demand to
support the profitable operation of the proposed subject hotel. Our review of
investor surveys indicates equity returns ranging from 12.7% to 26.1%, with an
average of 18.7%. Based on the anticipated cost of $35,000,000, the calculated
return to the equity investor is near the average of this range, indicating that the
project is feasible. We note that the calculated return is based upon the cost
estimated by HVS, which includes the developer's administrative costs and an
allocation for the cost of the land.
The analysis is based on the extraordinary assumption that the described

improvements have been completed as of the stated date of opening. The reader
should understand that the completed subject property does not yet exist as of the
date of this report. Our feasibility study does not address unforeseeable events that
could alter the proposed project, and/or the market conditions reflected in the
analyses; we assume that no significant changes, other than those anticipated and
explained in this report, shall take place between the date of inspection and stated
date of opening. The use of this extraordinary assumption may have affected the
assignment results. We have made no other extraordinary assumptions specific to
this feasibility study. However, several important general assumptions have been
made that apply to this feasibility study and our studies of proposed hotels in
general. These aspects are set forth in the Assumptions and Limiting Conditions
chapter of this report.

9. Statement of Assumptions and Limiting Conditions
1. This report is set forth as a feasibility study of the proposed subject hotel;
this is not an appraisal report.
2. This report is to be used in whole and not in part.
3. No responsibility is assumed for matters of a legal nature, nor do we render
any opinion as to title, which is assumed marketable and free of any deed
restrictions and easements. The property is evaluated as though free and
clear unless otherwise stated.
4. We assume that there are no hidden or unapparent conditions of the sub-
soil or structures, such as underground storage tanks, that would affect the
property’s development potential. No responsibility is assumed for these
conditions or for any engineering that may be required to discover them.
5. We have not considered the presence of potentially hazardous materials or
any form of toxic waste on the project site. We are not qualified to detect
hazardous substances and urge the client to retain an expert in this field if
desired.
6. The Americans with Disabilities Act (ADA) became effective on January 26,
1992. We have assumed the proposed hotel would be designed and
constructed to be in full compliance with the ADA.
7. We have made no survey of the site, and we assume no responsibility in
connection with such matters. Sketches, photographs, maps, and other
exhibits are included to assist the reader in visualizing the property. It is
assumed that the use of the described real estate will be within the
boundaries of the property described, and that no encroachment will exist.
8. All information, financial operating statements, estimates, and opinions
obtained from parties not employed by TS Worldwide, LLC are assumed true
and correct. We can assume no liability resulting from misinformation.
9. Unless noted, we assume that there are no encroachments, zoning
violations, or building violations encumbering the subject site.
10. The property is assumed to be in full compliance with all applicable federal,
state, local, and private codes, laws, consents, licenses, and regulations
(including the appropriate liquor license if applicable), and that all licenses,
permits, certificates, franchises, and so forth can be freely renewed or
transferred to a purchaser.
January-2020 Statement of Assumptions and Limiting Conditions

11. All mortgages, liens, encumbrances, leases, and servitudes have been
disregarded unless specified otherwise.
12. None of this material may be reproduced in any form without our written
permission, and the report cannot be disseminated to the public through
advertising, public relations, news, sales, or other media.
13. We are not required to give testimony or attendance in court because of this
analysis without previous arrangements and shall do so only when our
standard per-diem fees and travel costs have been paid prior to the
appearance.
14. If the reader is making a fiduciary or individual investment decision and has
any questions concerning the material presented in this report, it is
recommended that the reader contact us.
15. We take no responsibility for any events or circumstances that take place
subsequent to the date of our field inspection.
16. The quality of a lodging facility's onsite management has a direct effect on a
property's economic viability. The financial forecasts presented in this
analysis assume responsible ownership and competent management. Any
departure from this assumption may have a significant impact on the
projected operating results.
17. The financial analysis presented in this report is based upon assumptions,
estimates, and evaluations of the market conditions in the local and national
economy, which may be subject to sharp rises and declines. Over the
projection period considered in our analysis, wages and other operating
expenses may increase or decrease because of market volatility and
economic forces outside the control of the hotel’s management. We assume
that the price of hotel rooms, food, beverages, and other sources of revenue
to the hotel will be adjusted to offset any increases or decreases in related
costs. We do not warrant that our estimates will be attained, but they have
been developed based upon information obtained during the course of our
market research and are intended to reflect the expectations of a typical
hotel investor as of the stated date of the report.
18. This analysis assumes continuation of all Internal Revenue Servicetax code
provisions as stated or interpreted on either the date of value or the date of
our field inspection, whichever occurs first.
19. Many of the figures presented in this report were generated using
sophisticated computer models that make calculations based on numbers
carried out to three or more decimal places. In the interest of simplicity,
most numbers have been rounded to the nearest tenth of a percent. Thus,
these figures may be subject to small rounding errors.

20. It is agreed that our liability to the client is limited to the amount of the fee
paid as liquidated damages. Our responsibility is limited to the client; the
use of this report by third parties shall be solely at the risk of the client
and/or third parties. The use of this report is also subject to the terms and
conditions set forth in our engagement letter with the client.
21. Evaluating and comprising financial forecasts for hotels is both a science and
an art. Although this analysis employs various mathematical calculations to
provide value indications, the final forecasts are subjective and may be
influenced by our experience and other factors not specifically set forth in
this report.
22. This study was prepared by TS Worldwide, LLC. All opinions,
recommendations, and conclusions expressed during the course of this
assignment are rendered by the staff of TS Worldwide, LLC as employees,
rather than as individuals.

10. Certification
The undersigned hereby certify that, to the best of our knowledge and belief:
1. the statements of fact presented in this report are true and correct;
2. the reported analyses, opinions, and conclusions are limited only by the
reported assumptions and limiting conditions, and are our personal,
impartial, and unbiased professional analyses, opinions, and conclusions;
3. we have no present or prospective interest in the property that is the subject
of this report and no personal interest with respect to the parties involved;
4. we have no bias with respect to the property that is the subject of this report
or to the parties involved with this assignment;
5. our engagement in this assignment was not contingent upon developing or
reporting predetermined results;
6. our compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined result or direction in
performance that favors the cause of the client, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to
the intended use of this study;
7. our analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Uniform Standards of Professional
Appraisal Practice;
8. Chris Cabrera provided significant assistance to Daniel P. McCoy, MAI, and
that no one other than those listed above and the undersigned prepared the
analyses, conclusions, and opinions concerning the real estate that are set
forth in this report;
9. Daniel P. McCoy, MAI, has not performed services, as an appraiser or in any
other capacity, on the property that is the subject of this report within the
three-year period immediately preceding acceptance of this assignment;
10. the reported analyses, opinions, and conclusions were developed, and this
report has been prepared, in conformity with the requirements of the Code
of Professional Ethics and the Standards of Professional Appraisal Practice
of the Appraisal Institute;
11. the use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives; and
January-2020 Certification
12. as of the date of this report, Daniel P. McCoy, MAI, has completed the
continuing education program for Designated Members of the Appraisal
Institute.
Daniel P. McCoy, MAI

Managing Director, Senior Partner
TS Worldwide, LLC
State Appraiser License (MO) 2010001717
January-2020 Certification
Daniel McCoy, MAI
EMPLOYMENT
2006 to present HVS CONSULTING AND VALUATION SERVICES

St. Louis, Missouri
2006 CONSUMER CREDIT COUNSELING SERVICE OF NORTHERN COLORADO

Fort Collins, Colorado
2004 – 2005 ACADIA CORPORATION

Bar Harbor, Maine
EDUCATION AND OTHER BS – Truman State University

TRAINING
Other Specialized Training Classes Completed:
Uniform Standards of Professional Appraisal Practice – 15 hours
Basic Appraisal Procedures – 30 hours
Basic Appraisal Principles – 30 hours
General Appraiser Income Approach (Parts I and II) – 60 hours
General Appraiser Market Analysis and HBU – 30 hours
General Appraiser Site Valuation and Cost Approach – 30 hours
Statistics, Modeling, and Finance – 15 hours
General Appraiser Report Writing and Case Studies – 30 hours
Business Practices and Ethics – 8 hours
General Appraiser Sales Comparison Approach – 30 hours
Advanced Sales Comparison and Cost Approaches – 40 hours
Advanced Income Capitalization – 40 hours
Report Writing and Valuation Analysis – 40 hours
Advanced Applications – 40 hours
Environmental Pollution & Mold – 2 hours
Mortgage Fraud – Protect Yourself – 7 hours
Foundations in Sustainability: Greening the RE – 7 hours
Land and Site Evaluation – 7 hours
General Demonstration Report Writing – 7 hours
HVS, St. Louis, Missouri Qualifications of Daniel McCoy, MAI

1
EDUCATION AND OTHER Fundamentals of Separating Real, Personal Property, and Intangible Business Assets – 15
TRAINING (CONTINUED) hours
REO and Foreclosure – 5 hours
The Evolution of Finance & the Mortgage Market – 4 hours
Michigan Law – 2 hours
Supervising Class – 4 hours
Environmental Issues for Appraisers – 5 hours
Risky Business – Ways to Minimize Your Liability – 5 hours
Appraisal Applications of Regression Analysis – 7 hours
Real Estate Statistics and Valuation Modeling – 15 hours
Pennsylvania Law – 2 hours
Basics of Expert Witness – 7 hours
Appraisal of Land Subject to Ground Lease – 7 hours
California Law – 4 hours
Sales Comparison – 7 hours
Condemnation Appraising – 22 hours
Appraiser as an Expert Witness – 15 hours
Biennial USPAP Updates
STATE CERTIFICATIONS Arizona, California, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan,
Minnesota, Missouri, North Carolina, North Dakota, Ohio, Tennessee
PROFESSIONAL Appraisal Institute – Designated Member (MAI)

AFFILIATIONS
PUBLISHED ARTICLES
HVS Journal “The Suite Spot for Family Travel: Development Insights for Attracting Summer Travel
Demand,” July 2019
HVS Journal “HVS Market Pulse: Destination Downtown St. Louis,” April 2019
HVS Journal “Market Pulse: Kansas City,” co-authored with Sara Olson, November 2018
HVS Journal “HVS Key Takeaways: The Southern Lodging Summit 2016,” August 2016
HVS Journal “In Focus: St. Louis, MO,” August 2016
HVS Journal “Five Key Takeaways: 2015 NYU International Hospitality Industry Investment
Conference,” co-authored with Sara Olson and Dorothy Jennings, June 2015

2
HVS Journal “In Focus: Memphis, Tennessee,” September 2014
HVS Journal “Market Intelligence Report 2013: Nashville,” co-authored with Ryan Wall, October 2013
HVS Journal “Market Intelligence Report 2013: St. Louis,” May 2013
HVS Journal “HVS Market Intelligence Report: Nashville, Tennessee,” June 2011
HVS Journal “Performance Potential of Mid-Scale Hotels: Less May Be More,” October 2009
HVS Journal “St. Louis Hotels: Riding out the Economic Storm,” June 2009
HVS Journal “HVS Market Intelligence Report: Kansas City,” January 2008
HVS Journal “HVS Market Intelligence Report: Downtown St. Louis,” August 2007
EXPERT WITNESS Wisconsin Department of Transportation v. Voyager Inn, Inc., et al.

CONSULTING AND Milwaukee County Case No. 12-CV-7392
TESTIMONY EXPERIENCE
Franncy Holdings, LLC v. Borrego Springs Bank N.A., Guardian Hospitality, LLC, United
States Department of Treasury, Internal Revenue Service, and State of Wisconsin
Department of Workforce Development
United States Bankruptcy Court Case No. 1-11-14159-tsu
Suky Jodi, Inc. v. Prak Properties, LLC

Sauk County Case No. 13-CV-390
Mirbeau of Geneva Lake, LLC, v. City of Lake Geneva, Todd Krause, Gary Dunham, Mary Jo
Fesenmaier, Arleen Krohn, Larry Magee, Tom Spellman, Donald Tolar, William Chesen,
Penny Roehrer, and Frank Marsala
U.S. District Court Eastern District of Wisconsin Case No. 08-CV-693
Dakota Ventures, LLC vs. Hospitality Builders, Inc.

American Arbitration Association Case No. 65 110 00025 14

3
EXAMPLES OF PROPERTIES APPRAISED ALASKA Ritz-Carlton, Rancho Mirage
OR EVALUATED Bristol Bay Lodge, Bristol Bay Holiday Inn Express Otay Mesa, San
Comfort Inn, Kodiak Diego
PORTFOLIO ANALYSIS
Barclays Capital Portfolio of 14, ARIZONA COLORADO
Various Locations Holiday Inn & Suites, Chandler Proposed Hotel, Breckenridge
Portfolio of 40 Courtyard by Marriott SpringHill Suites, Flagstaff Comfort Inn & Suites, Carbondale
Properties, Various Locations Dobson Ranch, Mesa Hyatt House, Colorado Springs
CW Capital Portfolio of 6, Various Hilton Phoenix East, Mesa Silverleaf Suites, Eagle
Locations Courtyard by Marriott, Page Courtyard by Marriott, Glenwood
GE Commercial Portfolio of 41, Various Proposed Holiday Inn Express Happy Springs
Locations Valley, Phoenix Holiday Inn Express, Glenwood
JPMorgan Chase & Deutsche Bank Red Roof Inn Phoenix Bell Road, Springs
Portfolio of 15, Various Locations Phoenix Residence Inn by Marriott, Glenwood
Prime Finance Portfolio of 5, Various Kings Ransom Hotel, Sedona Springs
Locations Proposed Summerfield Suites, Tempe Proposed Hotel, Hayden
Rochester Resorts Portfolio of 4 Red Roof Inn Phoenix Airport, Tempe Courtyard by Marriott, Lakewood
Hotels, Florida Residence Inn by Marriott, Lakewood
Portfolio of 4 Extended Stay America ARKANSAS Tyme Square Inn, Limon
Hotels, St. Louis Proposed Hotel, Conway Residence Inn, Westminster
Ladder Capital Portfolio of 21, Various Courtyard by Marriott, Hot Springs Proposed Wolcott Inn, Wolcott
Locations Proposed Comfort Inn & Suites,
American Hotel Income Properties Jonesboro DELAWARE
REIT Portfolio of 9, Various Proposed Embassy Suites, Jonesboro Red Roof Inn Newark Wilmington,
Locations Proposed Holiday Inn Express & Newark
Ladder Capital/Deutsche Bank Suites, Jonesboro
Portfolio of 22, Various Locations Hilton Garden Inn, Little Rock DISTRICT OF COLUMBIA
Sage Hospitality Portfolio of 10, Holiday Inn Express, North Little Rock Courtyard Washington Navy Yard
Various Locations Proposed Comfort Inn & Suites, North Marriott Wardman
JP Morgan Chase Portfolio of 66, Little Rock
Various Locations Embassy Suites, Rogers FLORIDA
Portfolio of 41 InTown Suites Hyatt Place, Rogers Country Inn & Suites, Cape Canaveral
Properties, Various Locations Hyatt Place, Fort Lauderdale
Portfolio of 16 Extended-Stay Hotels, CALIFORNIA Candlewood Suites Fort Myers Sanibel
Various Locations SLS Hotel, Beverly Hills Gateway, Fort Myers
Portfolio of 15 Extended-Stay Hotels, Proposed Hilton Garden Inn, Burbank Proposed Hotel, Jacksonville
Various Locations Residence Inn by Marriott, Burbank Proposed Legacy Hotel & Suites,
Portfolio of 4 Tennessee Properties The GlenRoy, Coachella Jacksonville
Proposed Dual-Brand AC Hotel & Red Roof Plus Miami Airport, Miami
ALABAMA Residence Inn by Marriott, Fremont West Wind Inn, Sanibel
Hampton Inn & Suites Downtown, Courtyard by Marriott, Long Beach SpringHill Suites by Marriott, Sarasota
Birmingham Belamar Hotel, Manhattan Beach Proposed Hotel, Tallahassee
Proposed Hotel Birmingham, Hilton Garden Inn, Mountain View Hampton Inn, Tampa
Birmingham Chase Suites, Newark Proposed Westin, St. Petersburg
Courtyard by Marriott, Dothan TownePlace Suites by Marriott,
Hampton Inn & Suites, Dothan Newark GEORGIA
Residence Inn by Marriott, Oceanside

4
Hampton Inn Atlanta Cumberland Mall Proposed Hotel & Conference Center, Proposed Courtyard by Marriott, Des
Northwest, Atlanta Galesburg Moines
Meliá, Atlanta Holiday Inn Express, Lansing Proposed Hilton Des Moines
Proposed Site, Atlanta Hyatt, Lisle Downtown, Des Moines
Red roof Plus Atlanta Buckhead, Hampton Inn, Marion Super 8, Webster City
Atlanta Holiday Inn, Matteson
Hampton Inn Atlanta Airport, College Holiday Inn, Mount Prospect ILLINOIS
Park Holiday Inn Mount Prospect Chicago, Proposed Best Western Vib, Arlington
Hotel Indigo Atlanta Airport, College Mount Prospect Heights
Park Hampton Inn, Mt. Vernon Ramada, Bolingbrook
Suburban Extended Stay, Duluth Carleton Hotel, Oak Park Holiday Inn Carbondale Conference
Hyatt Place, Johns Creek Hilton Garden Inn, O’Fallon Center, Carbondale
Embassy Suites, Kennesaw Settle Inn & Suites, O’Fallon Candlewood Suites Champaign Urbana
Courtyard by Marriott, Tifton Proposed Best Western Plus, Olney University Area, Champaign
Crowne Plaza O’Hare, Rosemont Holiday Inn & Suites, Decatur
ILLINOIS Hyatt, Rosemont Proposed Fairfield Inn & Suites, Des
Proposed Hotel & Conference Center, Days Inn, Sheffield Plaines
Alton Proposed Holiday Inn Express, Troy Proposed Hotel, East Peoria
Proposed SpringHill Suites and Holiday Inn Express, Urbana Holiday Inn Express & Suites,
Conference Center, Alton Hyatt House, Warrenville Edwardsville
Super 8, Beardstown Hyatt Place, Warrenville Proposed Hotel, Edwardsville
Baymont Inn & Suites, Bloomington Holiday Inn, Effingham
Proposed Hilton Garden Inn, INDIANA Hampton Inn & Suites Saint Louis
Bolingbrook Comfort Suites, Auburn Edwardsville, Glen Carbon
Crowne Plaza, Burr Ridge Hampton Inn, Bloomington Red Roof Inn, Joliet
Marriott Chicago Southwest, Burr Hotel Indigo, Columbus Drury Inn & Suites Mount Vernon,
Ridge Courtyard by Marriott, Evansville Mount Vernon
Quality Inn (Conversion to Crowne Holiday Inn, Evansville Red Roof Inn Chicago Naperville,
Plaza), Burr Ridge Proposed Hampton Inn, Fair Oaks Naperville
SpringHill Suites by Marriott, Burr Big Splash Adventure Water Park & Country Inn & Suites, O'Fallon
Ridge Resort, French Lick Hilton Garden Inn St. Louis Shiloh
Days Inn, Carbondale Courtyard by Marriott, Goshen O’Fallon, O’Fallon
Proposed Downtown Hotel, Centralia Hilton, Indianapolis Proposed Fairfield Inn, O'Fallon
Proposed Limited-Service Hotel, Homewood Suites by Hilton Proposed Hampton Inn O’Fallon,
Centralia Indianapolis Downtown, O’Fallon
Allegro, Chicago Indianapolis Best Western Plus, Olney
Proposed Hampton Inn (Chicago Ramada Inn, Indianapolis Holiday Inn Express Urbana
Motor Club Conversion), Chicago Hampton Inn, Marion Champaign U Of I Area, Urbana
Fairfield Inn by Marriott, Collinsville Days Inn, Merrillville Proposed TownePlace Suites by
Holiday Inn Express, Edwardsville Marriott, Waukegan
Proposed Holiday Inn Express, IOWA
Edwardsville Proposed Hilton Garden Inn & INDIANA
Proposed Hotel and Conference Conference Center, Amana Proposed Hyatt Place and Hyatt House,
Center, Edwardsville Proposed TownePlace Suites, Fishers
Holiday Inn, Effingham Burlington Fort Wayne Hotel, Fort Wayne
Best Western, Galesburg Days Inn, Davenport
KANSAS

5
Holiday Inn Express Hotel & Suites Proposed Fairfield Inn & Suites, Marriott Southfield, Detroit
East Wichita I-35 Andover, Andover Louisville Proposed West Elm Hotel, Detroit
Proposed Hard Rock Hotel, Proposed Residence Inn by Marriott, Residence Inn, East Lansing
Edwardsville Louisville Courtyard by Marriott, Flint
Proposed Hyatt House, Edwardsville Red Roof Inn Louisville Expo Airport, Days Inn, Flint
Proposed Hampton Inn, Gardner Louisville Holiday Inn, Flint
Candlewood Suites, Junction City Proposed Country Inn & Suites, Super 8, Flint
Proposed Hotel, Kansas City Madisonville Proposed Holiday Inn Express
Fairfield Inn & Suites by Marriott, Days Inn, Mount Sterling Downtown, Grand Rapids
Leavenworth Best Western, Paducah Residence Inn, Grand Rapids
Proposed Home2 Suites by Hilton, Courtyard by Marriott, Paducah Holiday Inn, Kalamazoo
Leavenworth Econo Lodge, Paducah North Country Inn, Kalkaska
Proposed Leavenworth Hotel, Econo Lodge, Lansing
Leavenworth LOUISIANA Hyatt Place Lansing Eastwood Towne
Proposed TownePlace Suites, Hampton Inn, Gonzales Center, Lansing
Leavenworth Quality Inn, Lafayette Proposed Hyatt Place, Lansing
Crowne Plaza, Lenexa Holiday Inn & Suites, Lake Charles Hyatt Place Detroit/Livonia, Livonia
Hyatt Place Kansas City Lenexa City Sleep Inn, Lake Charles Residence Inn, Livonia
Center, Lenexa Sheraton, Metairie Residence Inn, Madison Heights
Proposed SpringHill Suites by Proposed Hotel Indigo, New Orleans Comfort Suites, Southgate
Marriott, Lenexa Proposed Union Street Hotel, New Comfort Inn & Suites, Taylor
SpringHill Suites Kansas City Orleans Hilton, Troy
Lenexa/City Center, Lenexa Red Roof Inn, West Monroe Residence Inn, Troy
Hampton Inn & Suites, Merriam
Chase Suites, Overland Park MARYLAND MINNESOTA
Hilton Garden Inn, Overland Park Red Roof Inn Washington DC BW Proposed Hampton Inn, Brooklyn Park
Red Roof Inn, Overland Park Parkway, Hanover WoodSpring Suites Grand Rapids
Ambassador, Wichita Comfort Inn, Hunt Valley Holland, Holland
Clarion Hotel & Suites, Wichita Legacy Hotel, Rockville Marquette Hotel Curio Collection by
Fairfield Inn & Suites by Marriott Red Roof Inn Baltimore North Hilton, Minneapolis
Wichita Downtown, Wichita Timonium, Timonium DoubleTree Park Place, St. Louis Park
Embassy Suites by Hilton Saint Paul
KENTUCKY MASSACHUSETTS Downtown, Saint Paul
TownePlace Suites by Marriott, Red Roof Inn, Saugus Windom Family Inn, Windom
Bowling Green Red Roof Inn, West Springfield Super 8, Worthington
Hampton Inn, Covington
Proposed Hotel, Covington MICHIGAN MISSISSIPPI
Holiday Inn Express, Danville Bell Tower Hotel, Ann Arbor Hilton Garden Inn, Jackson
Hyatt Place Cincinnati Airport, Campus Inn, Ann Arbor Proposed Hampton by Hilton Fondren
Florence Hilton Suites, Auburn Hills District, Jackson
Proposed Staybridge Suites, Florence Hyatt Place Detroit/Auburn Hills, Holiday Inn Express Hotel & Suites,
Clarion Hotel Conference Center Auburn Hills Natchez
South, Lexington Holiday Inn Express, Birch Run Holiday Inn Express Hotel & Suites,
Comfort Suites, Louisville Holiday Inn Express, Brighton Winona
Holiday Inn, Louisville Hilton Garden Inn Detroit Downtown,
Hyatt Place Louisville East, Louisville Detroit MISSOURI
Proposed Boutique Hotel, Louisville Marriott Airport, Detroit

6
Hampton Inn Kansas City Blue Springs, Hilton Kansas City Airport, Kansas City Embassy Suites, St. Louis
Blue Springs Hotel Phillips Kansas City, Curio Hilton at the Ballpark, St. Louis
Georgetown Inn, Branson Collection by Hilton, Kansas City Hilton Downtown, St. Louis
Hilton Branson Landing, Branson Holiday Inn Aladdin, Kansas City Hilton (conversion to Le Meridien), St.
Hilton Promenade, Branson Marriott, Kansas City Louis
Residence Inn, Branson Proposed Limited-Service Hotel, Holiday Inn, St. Louis
Proposed TownePlace Suites by Kansas City Holiday Inn Airport West Earth City,
Marriott, Brentwood Proposed Marriott Marquis, Kansas St. Louis
Crowne Plaza, Bridgeton City Holiday Inn Express & Suites St. Louis
Proposed Old Hinderhook Hotel, Days Inn, Kennett Airport, St. Louis
Camdenton Holiday Inn Express, Kirksville Holiday Inn Riverport, St. Louis
Hampton Inn & Suites, Chesterfield Country Club Hotel & Spa, Lake Ozark Hotel Angad, St. Louis
Homewood Suites by Hilton St. Louis, Resort at Point Arrowhead, Lake Ozark Hotel Saint Louis, Autograph
Chesterfield Holiday Inn Express & Suites Kansas Collection, Saint Louis
Hyatt Place St. Louis, Chesterfield City Lee's Summit, Lee's Summit La Quinta Inn & Suites, St. Louis
Proposed Hyatt Place, Chesterfield Proposed Staybridge Suites St. Louis, La Quinta Inn & Suites St. Louis
Proposed Residence Inn, Chesterfield Maryland Heights Westport, St. Louis
Super 8, Chillicothe Staybridge Suites Saint Louis, Magnolia Hotel, St. Louis
Proposed Clayton Hotel, Clayton Maryland Heights Marriott at the Airport, St. Louis
Seven Gables Inn Saint Louis, Clayton Best Western, Mexico Marriott St. Louis Grand Hotel, St.
Sheraton Clayton Plaza Saint Louis, Proposed Element and Aloft, North Louis
Clayton Kansas City Millennium Hotel, St. Louis
Proposed Indigo Hotel, Clayton Holiday Inn Express, O’Fallon Parkway Hotel, St. Louis
Proposed Hotel, Clayton Multi-use Commercial Property, Proposed Boutique Hotel, St. Louis
Hampton Inn & Suites Columbia at The O'Fallon Proposed DoubleTree by Hilton Hotel,
University, Columbia Proposed Sleep Inn, O’Fallon St. Louis
Holiday Inn Columbia East, Columbia Proposed Tru by Hilton, O'Fallon Proposed EVEN St. Louis, St. Louis
La Quinta Inn & Suites, Columbia Staybridge Suites, O’Fallon Proposed Fairfield Inn & Suites, St.
Tiger Hotel, Columbia Proposed Hotel, Olivette Louis
Residence Inn by Marriott, Earth City Proposed Osage Beach Resort, Osage Proposed Holiday Inn, St. Louis
Elms Resort & Spa, Excelsior Springs Beach Proposed Hotel Blackhawk Autograph
Holiday Inn Express, Fenton Tan-Tar-A Resort, Osage Beach Collection, St. Louis
Proposed Hampton Inn & Suites by Hampton Inn, Poplar Bluff Proposed Hotel St. Louis, Saint Louis
Hilton, Festus Holiday Inn, Poplar Bluff Proposed Hyatt Place, St. Louis
Proposed Cobblestone Hamilton, Proposed Hampton Inn, Poplar Bluff Proposed Moxy, St. Louis
Hamilton Homewood Suites, Richmond Heights Proposed Residence Inn/Fairfield Inn,
Comfort Inn, Hayti Proposed Resort, Ridgedale St. Louis
La Quinta Inn, Hazelwood Restaurant, Springfield Proposed Staybridge Suites, St. Louis
Staybridge Suites, Independence Fairfield Inn & Suites by Marriott St. Sheraton City Center, St. Louis
Holiday Inn (Conversion to Louis St. Charles, Saint Charles Sheraton Hotel Clayton Plaza, St. Louis
DoubleTree), Joplin Hampton Inn, St. Charles Courtyard by Marriott St Louis St
Hotel Joplin, Joplin Hampton Inn, St. Joseph Peters, Saint Peters
Chase Suites, Kansas City Red Lion Hotel, St. Joseph TownePlace Suites by Marriott St.
Embassy Suites Grand Reserve Kansas Cheshire Inn & Lodge, Saint Louis Louis St. Charles, St. Charles
City, Kansas City Crowne Plaza Downtown, St. Louis Proposed Best Western, Springfield
Hotel Indigo Kansas City Downtown, Econo Lodge Southwest St Louis, St. Riva D’Lago Resort, Sunrise Beach
Kansas City Louis

7
Proposed Holiday Inn Resort, Table Proposed Residence Inn by Marriott, DoubleTree by Hilton, Bend
Rock Lake Steele Creek DoubleTree by Hilton, Salem
Proposed Hyatt House, University City Blockade Runner Beach Resort, Shilo Inn, Newport
Holiday Inn Express, Warrensburg Wrightsville Beach
PENNSYLVANIA
MONTANA NORTH DAKOTA Courtyard by Marriott, Bensalem
Proposed Red Lion Hotel, Polson Proposed Staybridge Suites, Williston Clarion, DuBois
Proposed Microtel Inn & Suites, Proposed Holiday Inn, Erie
NEBRASKA Jamestown Red Roof Inn, Erie
Hampton Inn Lincoln Airport, Lincoln Grand Inn, Fargo DoubleTree by Hilton Pittsburgh
Proposed Kindler Hotel, Lincoln Holiday Inn, Fargo Green Tree, Pittsburgh
Proposed TownePlace Suites by Hyatt House, Minot Proposed Drury Plaza, Pittsburgh
Marriott, Lincoln Microtel Inn & Suites, Stanley Red Roof Inn Pittsburgh Airport,
Holiday Inn Express, North Platte Value Place, Watford City Pittsburgh
Carlisle Hotel, Omaha Residence Inn by Marriott Pittsburgh
Hyatt Place Omaha Downtown Old OHIO Airport Coraopolis, Pittsburgh
Market, Omaha Comfort Inn & Suites, Carbondale
Proposed Aloft, Omaha Proposed Graduate, Columbus SOUTH CAROLINA
Proposed Residence Inn by Marriott, Comfort Suites, Columbia
NEW JERSEY Dublin Fairfield Inn, Orangeburg
Crowne Plaza, Jamesburg Country Inn & Suites, Fairborn Proposed Legacy Suites, Rock Hill
TownePlace Suites by Marriott, Mount Hyatt Place Cleveland/Independence,
Laurel Independence SOUTH DAKOTA
Crowne Plaza, Somerset Red Roof Inn Cleveland Independence, Super 8, Madison
Independence Courtyard by Marriott, Sioux Falls
NEW MEXICO Proposed Hyatt Place, Cleveland SpringHill Suites, Sioux Falls
Hyatt Albuquerque, Albuquerque Residence Inn by Marriott Cleveland
Independence, Independence TENNESSEE
NEW YORK Residence Inn by Marriott Cleveland Homewood Suites, Brentwood
Red Roof Inn Binghamton, Johnson Mentor, Mentor Hyatt Place Nashville/Brentwood,
City Hyatt Place Cincinnati Northeast, Brentwood
Red Roof Inn Long Island Garden City, Mason Country Hearth Inn & Suites, Camden
Westbury Red Roof Inn, North Canton Fairfield Inn & Suites, Chattanooga
Hampton Inn North Olmsted Cleveland Hilton Garden Inn, Clarksville
NORTH CAROLINA Airport, North Olmsted Holiday Inn Express Gatlinburg
Clarion Inn Airport, Asheville Red Roof Inn, Saint Clairsville Downtown, Gatlinburg
Hilton Biltmore Park, Asheville Timberlane Inn, Salem Parkway Inn & Suites, Goodlettsville
Holiday Inn Airport, Asheville Courtyard by Marriott, Willoughby Baymont Inn & Suites, Jackson
Red Roof Inn Asheville West, Asheville Hills Proposed Quality Inn & Suites, Joelton
Holiday Inn Express, Boone Residence Inn by Marriott, Red Roof Inn, Johnson City
Hampton Inn, Cape Hatteras Worthington Proposed Limited-Service Hotel
Proposed Residence Inn by Marriott, McKenzie, McKenzie
Charlotte OKLAHOMA Hampton Inn & Suites, Memphis
TownePlace Suites Charlotte Crowne Plaza, Oklahoma City Hampton Inn Thousand Oaks,
Arrowood, Charlotte Memphis
Comfort Suites, Huntersville OREGON Holiday Inn, Memphis
Proposed Hotel, Raleigh Best Inn & Suites, Albany

8
Hyatt Place Memphis Primacy DoubleTree by Hilton, Vancouver
Parkway, Memphis TEXAS Marcus Whitman Hotel, Walla Walla
Inland Suites Elvis Street, Memphis Courtyard, Abilene
Inland Suites Lamar Street, Memphis Holiday Inn, Amarillo WISCONSIN
Memphis Airport Hotel & Conference Holiday Inn Express, Brownwood Aloft, Green Bay
Center, Memphis Courtyard by Marriott, Corpus Christi Hilton Inn, Milwaukee
Proposed Aloft, Memphis Hilton Dallas Lincoln Center, Dallas
Proposed Best Western Vib, Memphis La Quinta Inn El Paso Cielo Vista, El WYOMING
Proposed Holiday Inn, Memphis Paso Candlewood Suites, Cheyenne
Proposed Hyatt Regency Memphis Holiday Inn, Fort Worth Snow King Resort, Jackson
Convention Center, Memphis Sheraton Downtown, Fort Worth
Proposed Hilton Garden Inn and Tru Proposed Hilton Garden Inn, Frisco
Dual-Brand, Mount Juliet Candlewood Suites Medical Center,
Proposed Limited-Service Hotel, Houston
Murfreesboro Residence Inn by Marriott, Houston
The Bobby Hotel, Nashville Quality Inn & Suites, Irving
DoubleTree by Hilton, Nashville Days Inn, Laredo
Hampton Inn & Suites Nashville Red Roof Inn, Laredo
Vanderbilt Elliston Place, Nashville Proposed Extended-Stay Hotel,
Hampton Inn Rudy Circle, Nashville Midland
Renaissance, Nashville Holiday Inn Express, South Padre
Holiday Inn Express McGavock Pike, Island
Nashville Courtyard by Marriott, Sugarland
Hotel Preston, Nashville Residence Inn by Marriott, Sugarland
Hyatt Place Nashville Opryland, Holiday Inn Express, Sweetwater
Nashville Comfort Suites, Tomball
Marriott Vanderbilt, Nashville WoodSpring Suites, Tyler
Proposed Dual-Branded Hilton Garden Proposed Extended-Stay Hotel, The
Inn/Home2 Suites by Hilton West Woodlands
End, Nashville
Proposed Fairmont Hotel & VIRGINIA
Residences Nashville, Nashville Alexandria Monaco, Alexandria
Proposed Gulch Hotel, Nashville Morrison House, Alexandria
Proposed Hotel, Nashville Proposed Residence Inn, Falls Church
Proposed InterContinental, Nashville Fairfield Inn & Suites by Marriott,
Proposed Margaritaville Hotel, Manassas
Nashville Red Roof Inn Manassas, Manassas
Proposed Tapestry Collection by Holiday Inn Express Hotel & Suites,
Hilton Nashville Downtown, Manassas
Nashville Red Roof Inn Richmond South,
Virgin Hotel, Nashville Richmond
Red Roof Inn, Nashville Proposed Hampton Inn, Springfield
Renaissance Hotel, Nashville Wedmore Place, Williamsburg
Sheraton Music City, Nashville
Westin, Nashville WASHINGTON
Proposed Limited-Service Hotel, Paris DoubleTree by Hilton, South Center,
Country Hearth Inn, Union City Seattle

9

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What is the purpose of the feasibility study?

What is the purpose of the feasibility study?

What market areas does the study analyze?

What market areas does the study analyze?

FEASIBILITY STUDY

UNIVERSITY CITY, MISSOURI

SUBMITTED TO: PR OPOSED PREPARED BY:

+1 (314) 505-8533 +1 (970) 215-0620

Ms. Libbey Tucker

HVS ST. LOUIS

Daniel P. McCoy, MAI, Managing Director, Senior Partner

Superior results through unrivaled

SECTION TITLE PAGE

We recommend that the proposed subject hotel operate as an upscale, select-service

January-2020 Executive Summary

January-2020 Executive Summary

Average Daily Available Occupied Average

2009 2,196 801,477 — 447,648 — 55.9 % $122.28 — $68.30 —

Average Annual Compounded Change:

Competitive Number Year Year

January-2020 Executive Summary

January-2020 Executive Summary

Est. Segmentation Estimated 2018 Estimated 2019

Hampton Inn and Sui tes

January-2020 Executive Summary

Est. Segmentation Estimated 2018 Estimated 2019

Cl a yton Pl a za 242 30 40 30 60 145 60 - 65 105 - 110 65 - 70 145 60 - 65 105 - 110 65 - 70

She ra ton Cl a yton Pl a za

Home wood Sui te s by

Ha mpton Inn & Sui tes

Re s i de nce I nn by Ma rri ott

Pa rkwa y Hote l 217 35 10 55 60 130 70 - 75 125 - 130 90 - 95 130 65 - 70 125 - 130 85 - 90

Home 2 Sui te s by Hi l ton

January-2020 Executive Summary

FIGURE 1-4 OCCUPANCYAND ADR FORECAST –PROPOSED SUBJECT PROPERTY

Occupancy Average Rate RevPAR

2022 66.0 % — $158.05 — $104.31 —

January-2020 Executive Summary

2022 (Calendar Year) 2023 Stabilized 2025 2026

*Departmental expenses are expressed as a percentage of departmental revenues.

January-2020 Executive Summary

January-2020 Executive Summary

The conclusion of this analysis indicates that an equity investor contributing

Assignment Conditions “Extraordinary Assumption” is defined in USPAP as follows:

An assignment-specific assumption as of the effective date regarding

January-2020 Executive Summary

The analysis is based on the extraordinary assumption that the described

1 The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice, 2018–2019

Real Estate Appraisers, 1978).

(Chicago: American Institute of Real Estate Appraisers, 1983).

Valuations. (Chicago: American Institute of Real Estate Appraisers, 1990).

January-2020 Executive Summary

1. All information was collected and analyzed by the staff of TS Worldwide,

(Chicago: Appraisal Institute, 2001).

January-2020 Executive Summary

January-2020 Recommendation of the Site and Neighborhood

January-2020 Recommendation of the Site and Neighborhood

* As s umes redevel opment of s i te a re a

Potential location #1 was considered adequate for hotel development on the

Location #2 benefits from excellent access and adequate proximity to demand