Hotel Pro Forma Development. Roger Staiger, FRICS Stage Capital, LLC (202)

Transcription

1 Hotel Pro Forma Development Roger Staiger, FRICS Stage Capital, LLC (202)

2 Disclaimer All slides in this presentation are the intellectual property of Stage Capital, LLC and Roger Staiger, FRICS. Use of these slides is only permitted when presented by Roger Staiger, FRICS or a designee of Stage Capital, LLC. Further distribution is strictly prohibited. rstaiger@stagecapitalllc.com 2 of 33

3 Structure 4-Part Sessions: 2-hours each Summary Page (1 st half) [Complete] Development/Draw Page [Complete] Pro Forma [Complete] Pulling it all together Amortization Valuation Bottom half of Summary Page 3 of 33

4 Hotel Pro Forma Model 125 Key Hotel 75,000 SF; 10,000 Banquet SF Full Service Development/Construction/Stabilize Focused on BASIC Modeling skills Result: completed scalable and modular Hotel pro forma model 4 of 33

5 Model Summary 125 Keys with Banquet space (Pretax analysis) Occupancy Rate Average Daily Rate/Escalation Capital Sourcing Develop Costs (HC = $57.0m) Valuation rstaiger@stagecapitalllc.com 5 of 33

6 Structure/Logic Flow Development Page (s2) Circular Reference Summary Page Inputs Section (s1) Analysis (s4) Amortization Page (s4) Pro Forma Page (s3) 6 of 33

7 Inputs Page (1 of 2) $ $/Key Revenue Year Escalation Metric Sources 70,687, ,501 Rooms Equity 17,671, ,375 Occupancy 68% 72% 75% Investor 1 17,671, ,375 Average Daily Rate % POR Investor 2 Debt 53,015, ,126 Food & Beverage Tranche 1 53,015, ,126 Restaurant % POR Tranche 2 Lounge % POR Banquet % PBSF Uses 70,687, ,501 Other Food & Beverage Land & Related 6,500,000 52,000 General & Administrative 1,750,000 14,000 Other Departments Dev Chrgs & Mun Costs 1,080,000 8,640 Telephone/Internet % POR Hard Cost Construction 56,475, ,800 Garage % POR Buidling Operations 2,175,000 17,400 Gift Shop % POR Financing Expense 2,707,627 21,661 Spa 1,000,000 1,200,000 1,500,000 5% Total $ Other Rents & Commissions % POR Surplus/(Deficit) 0 Other PV Reversion 72,226, % Characteristics PV Operating 12,418, % Number of Rooms 125 Total 84,645,069 Total Area (sf) 75,000 CF0 (18,649,002) Banquet Area (sf) 10,000 New Present Value 65,996,066 IRR 25.05% DSCR Cash on Cash Average 1.67 Average 98.81% Minimum 0.78 Minimum % rstaiger@stagecapitalllc.com 7 of 33

8 Input Page (2 of 2) Expense Year Escalation Metric Finance I/P Department Construction Rooms 32.0% 31.0% 30.0% % Rev LtV Const_LtV 75% Restaurant 85.0% 80.0% 80.0% % Rev Principal Lounge 65.0% 60.0% 60.0% % Rev Term (Years) Banquet 80.0% 72.0% 70.0% % Rev Interest Rate 6.00% Other F&B % Rev Interest Only Y Telephone/Internet 100.0% 100.0% 100.0% % Rev Origination Fee 1.00% Garage 50.0% 50.0% 50.0% % Rev Gift Shop 90.0% 90.0% 90.0% % Rev Permanent Spa 85.0% 80.0% 75.0% % Rev LtV Perm_LtV 75% Other Rents & Commissions 5.0% 5.0% 5.0% % Rev Principal Perm_Princ 53,015,720 Other % Rev Month Take Out Term (Years) 30 Unallocated Departments Interest Rate 5% General & Administrative % PAR Interest Only Y Repairs & Maintenance % PAR Origination Fee 0.50% Sales & Marketing % PAR Utilities % PSF Valuation I/P Other Capitalization Rate 8% Sales Expense 10% Other Deductions Discount Rate 6% Management Fee 3.0% 3.0% 3.0% % Ttl Rev FF&E Rep and Capital Reserves 3.0% 4.0% 5.0% % Ttl Rev Sales Period 10 Property Taxes 600, , ,000 3% Total $ Insurance 100, , ,000 4% Total $ Permits & Licenses 20,000 20,000 20,000 2% Total $ Equipment Rental 40,000 40,000 40,000 3% Total $ Other rstaiger@stagecapitalllc.com 8 of 33

9 Development Page (1 of 3) Development Start 1 Jan 14 Construction Months 24 Opening Date 1 Jan Cost Item Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Land & Related Land_Rela 6,500,000 Land & Related 6,500, % General & Administrative G_A 1,750,000 Legal Fees 200, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Development Management Fees 600, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Insurance & Warranty 650, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Other G&A 300, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Dev Chrgs & Mun Costs Dev_Chrg_ 1,080,000 Development Charges 850, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Building Permits 200, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Municipal Costs 30, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Hard Cost Construction HC_Const 56,475,000 General Costs 3,500, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Site Work 1,100, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Concrete Work 7,200, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Masonry 400, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Metals 950, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Carpentry & Millwork 5,100, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Moisture Protection 440, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Windows & Doors 7,100, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Finishing 8,300, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Specialities 1,250, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Equipment 2,100, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Furnishings 7,500, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Special Construction 135, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Conveying System 1,300, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Mechanical 4,100, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Electrical 2,250, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Contingency 3,750, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Buidling Operations Building_O 2,175,000 Pre Opening Expenses 1,850, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Working Capital Contribution 325, % 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% 4.17% Financing Expense Fnan_Exp 2,707,627 Construction Loan Interest 2,442,548 Financing Fee 265, % rstaiger@stagecapitalllc.com 9 of 33

10 Development Page (2 of 3) Cost Item Land & Related 6,500,000 Land & Related 6,500,000 General & Administrative 72,917 72,917 72,917 72,917 72,917 72,917 72,917 72,917 72,917 72,917 72,917 72,917 Legal Fees 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 Development Management Fees 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Insurance & Warranty 27,083 27,083 27,083 27,083 27,083 27,083 27,083 27,083 27,083 27,083 27,083 27,083 Other G&A 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 Dev Chrgs & Mun Costs 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 Development Charges 35,417 35,417 35,417 35,417 35,417 35,417 35,417 35,417 35,417 35,417 35,417 35,417 Building Permits 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 Municipal Costs 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 Hard Cost Construction 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 2,353,125 General Costs 145, , , , , , , , , , , ,833 Site Work 45,833 45,833 45,833 45,833 45,833 45,833 45,833 45,833 45,833 45,833 45,833 45,833 Concrete Work 300, , , , , , , , , , , ,000 Masonry 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 Metals 39,583 39,583 39,583 39,583 39,583 39,583 39,583 39,583 39,583 39,583 39,583 39,583 Carpentry & Millwork 212, , , , , , , , , , , ,500 Moisture Protection 18,333 18,333 18,333 18,333 18,333 18,333 18,333 18,333 18,333 18,333 18,333 18,333 Windows & Doors 295, , , , , , , , , , , ,833 Finishing 345, , , , , , , , , , , ,833 Specialities 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 Equipment 87,500 87,500 87,500 87,500 87,500 87,500 87,500 87,500 87,500 87,500 87,500 87,500 Furnishings 312, , , , , , , , , , , ,500 Special Construction 5,625 5,625 5,625 5,625 5,625 5,625 5,625 5,625 5,625 5,625 5,625 5,625 Conveying System 54,167 54,167 54,167 54,167 54,167 54,167 54,167 54,167 54,167 54,167 54,167 54,167 Mechanical 170, , , , , , , , , , , ,833 Electrical 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 Contingency 156, , , , , , , , , , , ,250 Buidling Operations 90,625 90,625 90,625 90,625 90,625 90,625 90,625 90,625 90,625 90,625 90,625 90,625 Pre Opening Expenses 77,083 77,083 77,083 77,083 77,083 77,083 77,083 77,083 77,083 77,083 77,083 77,083 Working Capital Contribution 13,542 13,542 13,542 13,542 13,542 13,542 13,542 13,542 13,542 13,542 13,542 13,542 Financing Expense 265,079 Construction Loan Interest Financing Fee 265,079 Total Project Development Budget less Loan Interest 9,326,745 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561,667 2,561, of 33

11 Development Page (3 of 3) Development Cash Flow: Equity BoP 17,671,907 8,345,162 5,783,495 3,221, ,161 Equity Draw 9,326,745 2,561,667 2,561,667 2,561, ,161 Equity EoP 8,345,162 5,783,495 3,221, ,161 Equity FV * Financial Close 18,649,002 10,262,745 2,807,051 2,795,403 2,783, ,430 Construction Debt BoP 1,901,505 4,472,679 Construction Debt Interest 2,442,548 9,508 22,363 Construction Debt Draw 1,901,506 2,561,667 2,561,667 Construction Debt EoP 1,901,506 4,472,679 7,056,709 rstaiger@stagecapitalllc.com 11 of 33

12 Pro Forma Page (1 of 3) Periods Days Month Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Operations Year Occupancy 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% 68.00% Average Daily Rate RevPar Occupied Rooms 2,635 2,465 2,635 2,550 2,635 2,550 2,635 2,635 2,550 2,635 2,550 2,635 Available Rooms 3,875 3,625 3,875 3,750 3,875 3,750 3,875 3,875 3,750 3,875 3,750 3,875 Department Revenue Rooms 737, , , , , , , , , , , ,800 Restaurant 131, , , , , , , , , , , ,750 Lounge 52,700 49,300 52,700 51,000 52,700 51,000 52,700 52,700 51,000 52,700 51,000 52,700 Banquet 445, , , , , , , , , , , ,890 Other Food & Beverage Total Food & Beverage 630, , , , , , , , , , , ,340 Telephone 2,635 2,465 2,635 2,550 2,635 2,550 2,635 2,635 2,550 2,635 2,550 2,635 Garage 13,175 12,325 13,175 12,750 13,175 12,750 13,175 13,175 12,750 13,175 12,750 13,175 Gift Shop 2,635 2,465 2,635 2,550 2,635 2,550 2,635 2,635 2,550 2,635 2,550 2,635 Spa 84,932 79,452 84,932 82,192 84,932 82,192 84,932 84,932 82,192 84,932 82,192 84,932 Other Rents & Commissions 21,080 19,720 21,080 20,400 21,080 20,400 21,080 21,080 20,400 21,080 20,400 21,080 Other Total Revenue 1,492,597 1,396,300 ######## ######## ####### ####### ####### ####### ####### ####### ####### ####### Department Expenses Rooms 236, , , , , , , , , , , ,096 Restaurant 111, , , , , , , , , , , ,988 Lounge 34,255 32,045 34,255 33,150 34,255 33,150 34,255 34,255 33,150 34,255 33,150 34,255 Banquet 356, , , , , , , , , , , ,712 Other Food & Beverage Total Food & Beverage 502, , , , , , , , , , , ,955 Telephone 2,635 2,465 2,635 2,550 2,635 2,550 2,635 2,635 2,550 2,635 2,550 2,635 Garage 6,588 6,163 6,588 6,375 6,588 6,375 6,588 6,588 6,375 6,588 6,375 6,588 Gift Shop 2,372 2,219 2,372 2,295 2,372 2,295 2,372 2,372 2,295 2,372 2,295 2,372 Spa 72,192 67,534 72,192 69,863 72,192 69,863 72,192 72,192 69,863 72,192 69,863 72,192 Other Rents & Commissions 1, ,054 1,020 1,054 1,020 1,054 1,054 1,020 1,054 1,020 1,054 Other Total Department Expenses 823, , , , , , , , , , , ,891 Gross Operating Profit 668, , , , , , , , , , , ,706 rstaiger@stagecapitalllc.com 12 of 33

13 Pro Forma Page (2 of 3) Unallocated Departments General & Administrative , , , , , , , , , , , ,250 Repairs & Maintenance ,800 81,200 86,800 84,000 86,800 84,000 86,800 86,800 84,000 86,800 84,000 86,800 Sale & Marketing ,800 81,200 86,800 84,000 86,800 84,000 86,800 86,800 84,000 86,800 84,000 86,800 Utilities ,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 Other Total Unallocated Departments 327, , , , , , , , , , , ,350 Other Deductions Management Fee 44,778 41,889 44,778 43,333 44,778 43,333 44,778 44,778 43,333 44,778 43,333 44,778 FF&E Rep and Capital Rsvs 44,778 41,889 44,778 43,333 44,778 43,333 44,778 44,778 43,333 44,778 43,333 44,778 Property Taxes 50,959 47,671 50,959 49,315 50,959 49,315 50,959 50,959 49,315 50,959 49,315 50,959 Insurance 8,493 7,945 8,493 8,219 8,493 8,219 8,493 8,493 8,219 8,493 8,219 8,493 Permits & Licenses 1,699 1,589 1,699 1,644 1,699 1,644 1,699 1,699 1,644 1,699 1,644 1,699 Equipment Rental 3,397 3,178 3,397 3,288 3,397 3,288 3,397 3,397 3,288 3,397 3,288 3,397 Other Total Other Deductions 154, , , , , , , , , , , ,104 Furnitures, Fixtures and Equipment Net Operating Income 187, , , , , , , , , , , ,253 Debt Tranche 1 220, , , , , , , , , , , ,899 Tranche 2 Total Debt 220, , , , , , , , , , , ,899 Sales Proceeds Sales Price Sales Expense Principal Repay Tranche 1 Principal Repay Tranche 2 Net Sales Proceeds Reversion FCF Operating FCF (33,646) (48,146) (33,646) (40,896) (33,646) (40,896) (33,646) (33,646) (40,896) (33,646) (40,896) (33,646) Total FCF (33,646) (48,146) (33,646) (40,896) (33,646) (40,896) (33,646) (33,646) (40,896) (33,646) (40,896) (33,646) rstaiger@stagecapitalllc.com 13 of 33

14 Pro Forma Page (3 of 3) (Valuation) (Today) Valuation: Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Equity (18,649,002) Reversion FCF Operating FCF (33,646) (48,146) (33,646) (40,896) (33,646) (40,896) (33,646) (33,646) (40,896) (33,646) (40,896) (33,646) (18,649,002) (33,646) (48,146) (33,646) (40,896) (33,646) (40,896) (33,646) (33,646) (40,896) (33,646) (40,896) (33,646) DSCR Average 1.67 Minimum 0.78 *RevPar Index (Star Report) Cash on Cash 0.18% 0.26% 0.18% 0.22% 0.18% 0.22% 0.18% 0.18% 0.22% 0.18% 0.22% 0.18% Average 0.79% Minimum 0.26% PV Reversion 72,226, % PV Operating 12,418, % Total 84,645, % CF0 (18,649,002) New Present Value 65,996,066 IRR 25.05% 14 of 33

15 Amortization Page (Today) Permanent Principal 53,015,720 Interest 5.00% Term 30 I/O Y # BoP Principal Interest Payment EoP Annual 1 53,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015, ,015, , ,899 53,015,720 2,650,786 rstaiger@stagecapitalllc.com 15 of 33

16 Annual Summary (1 of 2) (Today) Annual Summary: Year Revenue Rooms 8,710,800 9,526,500 10,265,625 10,573,594 10,920,639 11,217,526 F&B Total 7,442,084 8,706,500 9,921,875 10,219,531 10,554,956 10,841,901 Telephone 31,110 32,850 34,219 34,561 35,002 35,256 Garage 155, , , , , ,134 Gift Shop 31,110 65,700 68,438 70,491 72,804 74,784 Spa 1,002,740 1,200,000 1,500,000 1,575,000 1,658,281 1,736,438 Other Rents & Commissions 248, , , , , ,918 Other Total Revenue 17,622,273 20,057,150 22,406,094 23,107,592 23,896,921 24,578,954 Expense Department Rooms 2,787,456 2,953,215 3,079,688 3,172,078 3,276,192 3,365,258 F&B Total 5,938,112 6,340,950 7,082,188 7,294,653 7,534,078 7,738,898 Telephone 31,110 32,850 34,219 34,561 35,002 35,256 Garage 77, , , , , ,567 Gift Shop 27,999 59,130 61,594 63,442 65,524 67,305 Spa 852, ,000 1,125,000 1,181,250 1,243,711 1,302,328 Other Rents & Commissions 12,444 14,783 17,109 17,623 18,201 18,696 Other Total Department 9,727,225 10,475,903 11,536,672 11,904,588 12,318,316 12,677,307 Gross Profit 7,895,049 9,581,248 10,869,422 11,203,005 11,578,605 11,901,648 rstaiger@stagecapitalllc.com 16 of 33

17 Annual Summary (2 of 2) (Today) Unallocated Departments General & Administrative 1,372,500 1,414,375 1,460,000 1,503,800 1,553,158 1,595,381 Repairs & Maintenance 1,024,800 1,022,000 1,022,000 1,052,660 1,087,210 1,116,767 Sale & Marketing 1,024,800 1,022,000 1,022,000 1,052,660 1,087,210 1,116,767 Utilities 450, , , , , ,727 Other Total Unallocated Depts 3,872,100 3,908,375 3,954,000 4,072,620 4,204,983 4,320,643 Other Deductions Management Fee 528, , , , , ,369 FF&E Rep and Capital Rsvs 528, ,286 1,120,305 1,155,380 1,194,846 1,228,948 Property Taxes 601, , , , , ,273 Insurance 100, , , , , ,486 Permits & Licenses 20,055 20,000 20,000 20,400 20,865 21,224 Equipment Rental 40,110 40,000 40,000 41,200 42,552 43,709 Other Total Other Deductions 1,819,419 2,189,001 2,602,488 2,683,707 2,775,102 2,854,009 Net Operating Income 2,203,530 3,483,872 4,312,934 4,446,677 4,598,520 4,726,996 Debt Tranche 1 2,650,786 2,650,786 2,650,786 2,650,786 2,650,786 2,650,786 Tranche 2 Total Debt 2,650,786 2,650,786 2,650,786 2,650,786 2,650,786 2,650,786 Net Sales Proceeds Reversion FCF Operations FCF (447,256) 833,086 1,662,148 1,795,891 1,947,734 2,076,210 Total FCF (447,256) 833,086 1,662,148 1,795,891 1,947,734 2,076,210 rstaiger@stagecapitalllc.com 17 of 33

18 Inputs - Characteristics Number of Rooms Total Area (sf) Banquet Area (sf) rstaiger@stagecapitalllc.com 18 of 33

19 Sources Equity Investor 1 Investor 2 Debt Tranche 1 (source) Tranche 2 (source) Sources rstaiger@stagecapitalllc.com 19 of 33

20 Uses Uses Land & Related General & Administrative Development Charges & Municipal Costs Hard Cost Construction Building Operations Finance Expense 20 of 33

21 Input - Revenue Rooms Occupancy Average Daily Rate Food & Beverage Restaurant Lounge Banquet Other F&B Other Departments Telephone/Internet Garage Gift Shop Spa Other Rents & Commissions Other rstaiger@stagecapitalllc.com Page 21 of 33

22 Input - Expense Department Rooms Restaurant Lounge Banquet Other F&B Telephone/Internet Garage Spa Rents & Commissions Unallocated Dept. G&A Repairs & Maint Sales & Marketing Utilities rstaiger@stagecapitalllc.com Page 22 of 33

23 Input Expense (Cont d) Other Deductions Management Fee FF&E Rep and Capital Reserves Property Taxes Insurance Permits & Licenses Equipment Rental 23 of 33

24 Inputs - Finance Tranche 1 Principal Term(years) Interest Rate Interest Only Origination Fee Tranche 2 Principal Term(years) Interest Rate Interest Only Origination Fee rstaiger@stagecapitalllc.com 24 of 33

25 Capitalization Rate Sales Expense Discount Rate Sale Period (timing) Inputs - Valuation rstaiger@stagecapitalllc.com 25 of 33

26 Scalability The benefit(s) of successful pro forma modeling

27 Scalability (Incorporating the Waterfall) Separation of cash flows according to owners agreement Separation of cash flows by yield, NOT by order Order: Bank vanilla example Pref Rate: Preference Rate Generally provided to Investor Acts as a coupon rate, e.g. Preferred Equity rstaiger@stagecapitalllc.com 27 of 33

28 Waterfall Diagram Pari Passu 1 st Tier Pref Rate 15% good proxy for Pref Non Pari Passu split 2 nd Tier 2 nd Tier rate N # Tiers N th Tier N th Tier rate Final Tier Example Final Distribution X % to Promote to Sponsor (1 X%) distribution Pari Passu rstaiger@stagecapitalllc.com 28 of 33

29 Waterfall Logic 15% IRR Sponsor 10% 20% IRR Sponsor 20% 20% + IRR Promote Sponsor 40% Sponsor 10% Investor 90% Investor 80% Investor 90% rstaiger@stagecapitalllc.com 29 of 33

30 Waterfall Addition (100% Scalable) Circular Reference Development Page (s2) Summary Page Inputs Section (s1) Analysis (s4) Amortization Page (s4) Waterfall Page (Investor) (s5) Pro Forma Page (s3) 30 of 33

31 ULI Staiger (Upcoming Seminars) 1) Four part 2-hour series: How to build a Hotel pro forma model (Current Pro Forma Webinar) 2) Four part 2-hour series: Advanced Pro Forma Webinar (Multifamily Focus) 3) Two part 2-hour series: How to develop a waterfall rstaiger@stagecapitalllc.com 31 of 33

32 Stage Capital List-Serve Daily Capital Markets Summary Daily New research distributed Updates for Stage Capital Webinars and information sessions Interested? 32 of 33

33 Questions? Let s Begin (see memorandum for detailed steps of process at conclusion)