Executive Summary PHILADELPHIA VALLEY FORGE PRESENTED BY

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1 Executive Summary PHILADELPHIA VALLEY FORGE PRESENTED BY

2 EXECUTIVE SUMMARY 2 THE PLASENCIA GROUP is pleased to present for your investment consideration the 229-suite Embassy Suites Philadelphia Valley Forge (the Embassy Suites ). The property is situated within an elegantly manicured Chesterbrook business park at the heart of King of Prussia s Highway 202 corporate corridor, the Philadelphia area s largest suburban office district. The Embassy Suites sits at the doorstep of the international headquarters of several Fortune 500 Companies, including AmerisourceBergen, Universal Health Services, and UGI Corporation. Vanguard s international headquarters campus is located down the street, and other notable nearby corporate residents include Microsoft, Comcast, Triumph Group, Ricoh, Johnson & Johnson, Siemens, Lockheed Martin, and SAP America. The location s stellar corporate weekday demand is complemented by a bevy of weekend and family leisure attractions, including Valley Forge National Historic Park, the expansive and thriving King of Prussia Mall, and an aggregation of youth sports facilities which routinely draw competitors from across the country to participate in hockey, lacrosse, soccer, basketball, and volleyball tournaments. The Embassy Suites boasts an excellent operational track record, yet the opportunity exists to significantly grow revenues following a comprehensive renovation of the hotel s guestrooms and public areas, and the potential conversion of the hotel s existing restaurant into additional function space. The hotel is an institutionalcaliber asset in an irreplaceable location within the region, but suffers from a decade-old, tired guest-facing product. Upon renovation, the hotel has the potential to dominate the broader market for years to come. The Embassy Suites Philadelphia Valley Forge investment offering represents a rare opportunity to acquire an established, Hilton-branded hotel teeming with meaningful revenue potential in a location at the center of one nation s most prominent corporate hubs. Investment Summary Address 888 Chesterbrook Boulevard, Wayne, Pennsylvania Year Opened 1985 Guestrooms Building Area & Parcel Size Building Height Brand Affiliation Management Food & Beverage Total Meeting Space Largest Meeting Venue Parking Property Amenities 229 king-bedded, shotgun-style suites, inclusive of ten two-king suites and ten ADA-compliant suites 196,801 square feet Five stories The current Embassy Suites (Hilton family of brands) franchise license expires in December of Hilton has indicated a willingness to renew the Embassy Suites flag for an additional fifteen years, at the new owner s option, and subject to the completion of a change-of-ownership PIP. PM Hotel Group Grille at Chesterbrook (breakfast and dinner), E BAR Lounge (casual bar), complimentary breakfast and evening reception 4,000 square feet 1,800-square-foot Terrace function space 302 complimentary parking spaces Office campus location and nearby regional mall, business center, fitness center, indoor pool, wireless internet, room service, wet bar, microwave, refrigerator Additional Considerations The Embassy Suites is offered subject to the assumption of favorable in-place life-company financing, with the prospect of an increase in loan amount for a qualified buyer; Non-union property

3 Investment Highlights INTERNATIONAL GATEWAY MARKET The Embassy Suites location within the broader Philadelphia area, the nation s sixth-most populous city, allows it to capture hotel demand compression during major citywide events. The Valley Forge / King of Prussia area is viewed as an extremely attractive alternative to downtown Philadelphia for office space, perennially refining local office rental rates and tenant quality. Philadelphia s prominence in America s evolution draws tens of millions of domestic and international tourists each year, visiting attractions such as the Liberty Bell, Independence Hall, and the National Constitution Center. A leisure visit to the dozens of historical and cultural attractions throughout the Philadelphia metro area would be incomplete without a stop at the Valley Forge National Historic Park and the world-renowned King of Prussia Mall. EXECUTIVE SUMMARY 3 UNPARALLELED ACCESS The Philadelphia area benefits from exceptional access via road, air, and rail. Philadelphia sits at the intersection of two major highways, Interstate 95 (arguably the most crucial roadway on the East Coast) and Interstate 76 (the Pennsylvania Turnpike). The Embassy Suites sits south of the Turnpike and just north of Route 202, a major regional highway. Its location makes the hotel easily accessible by road on a local, regional, and national basis. The Embassy Suites also benefits from the presence of Philadelphia International Airport approximately 25 miles to its south. The airport is one of the top twenty airports in the country by passenger count and serves as a major international gateway for American Airlines. By rail, the Valley Forge submarket is accessible by both Amtrak trains and SEPTA, the regional rail system. Independence Hall

4 EXECUTIVE SUMMARY 4 Valley Forge National Historical Park CORPORATE DEMAND HOTBED The Embassy Suites benefits from its excellent location on the highbarrier-to-entry Highway 202 corporate corridor, Philadelphia s largest suburban office submarket. Located in the Chesterbrook Corporate Center, home to pharmaceutical giant AmerisourceBergen, within the upscale community of Chesterbrook, the Embassy Suites is central to dozens of corporations within a four mile radius, ranging from Fortune- 500-ranked Universal Health Services and UGI Corporation in King of Prussia to the east, to a large Microsoft campus and Vanguard s international headquarters in Malvern to the west. The presence of these companies leads to high household incomes and low unemployment rates in the local area. In addition to the region s strong corporate engine, the Greater Philadelphia Expo Center at Oaks, one of the largest exhibition halls in the Northeast, sits just a few miles north of the hotel and provides yet another consistent stream of guestroom demand. The Liberty Bell REGIONAL LEISURE DESTINATION The market surrounding the Embassy Suites offers guests a diverse array of leisure and recreational activities. On weekends, the local market is inundated with youth sports teams that are in town for games at one of the many nearby athletic facilities. Tourists can also visit the 3,500-acre Valley Forge National Historical Park, the site of the encampment for the Continental Army led by George Washington during the Revolutionary War. The recently renovated and expanded King of Prussia Mall, the largest shopping mall on the East Coast by square footage and sales per square foot, is a destination in its own right, as it features over 400 retailers and attracts 22 million shoppers from the region and from other parts of the world each year. Just to the northwest of the mall is another popular leisure demand generator, the Valley Forge Casino Resort. Opened in 2012, the casino is the region s only full-gaming destination and consistently generates additional weekend demand for the area.

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6 EXECUTIVE SUMMARY 6 E-Bar Corner Suite Living Area POST-RENOVATION ADR GROWTH The Embassy Suites has an exceptional track record of profitability and registers as one of the top RevPAR assets in the region, driven primarily by its extraordinarily high occupancy levels. However, there is a significantly higher ADR potential that can be achieved at the hotel following a renovation of the hotel s tired guestrooms and public areas. Bathrooms at the property were recently updated, but the guestroom soft goods and case goods are on track for a full renovation upon change of ownership and have not been updated in a decade. The hotel s public areas and meeting spaces will also benefit from a renovation, allowing the property to be much more competitive in retaining the region s lucrative corporate group accounts. The hotel currently achieves an annual ADR penetration of only approximately 100%, a figure well below typical Embassy Suites benchmarks. The hotel s weekend ADR index is under 100%, an even more pronounced anomaly which should surely be corrected through a renovation. With modest capital investments, the Embassy Suites should be able to improve its competitive set ADR ranking from its current 4 out of 7, to the first or second position among its rivals, resulting in nearly pure flow through to the bottom line. PRIME HILTON FLAG The Embassy Suites brand is widely recognized as a category killer, boasting an all-suite product which appeals to both corporate transient guests and leisure travelers alike. The brand is ideally suited for the hotel s location proximate to such a diverse mix of weekday corporate business and weekend tourist and sports-related demand generators. The Embassy Suites is currently the top brand offering within Hilton s family of brands in the broader Valley Forge/King of Prussia region. The Hilton network includes 14 lodging brands and over 5,100 properties in 103 countries. The Hilton brand enjoys one of the largest and most powerful guest loyalty programs, with over 69 million members worldwide.

7 MEETING SPACE EXPANSION OPPORTUNITY While the hotel will benefit greatly from the renovation of its existing meeting facilities, it may also be possible to add meaningful banquet and function square footage. The hotel s site and configuration could allow for the addition of a 4,000-square-foot ballroom through new construction on a portion of the parking lot. There is also an opportunity to convert the existing 3,000-squarefoot Grille at Chesterbrook into a separate event venue, which would make it the largest function space within the hotel. In expanding the property s meeting space, the complimentary breakfast and dining service could be relocated to the hotel s ample lounge area. The hotel s ADR would be greatly enhanced by the introduction of additional meeting space, as it would allow the Embassy Suites to recapture corporate and social group accounts that once utilized the property in the years immediately following its last renovation. While the Embassy Suites has an exceptional transient base of business, its group occupancy and ADR are both lower than those of the competitive set. With a renovated product and improved function facilities, the hotel s performance in the group segment should improve dramatically. EXECUTIVE SUMMARY 7 Meeting Room Indoor Pool MANAGEMENT AVAILABILITY The Embassy Suites is offered free and clear of the current management agreement. This flexibility will allow new ownership to insert its operator of choice to oversee the renovation of the asset and implement its desired operational and revenue enhancement strategies.

8 CONTACT INFORMATION For additional information regarding the Embassy Suites Philadelphia Valley Forge investment opportunity, please contact: LOU PLASENCIA Chief Executive Officer (813) NICK PLASENCIA Vice President (813) CHRIS PLASENCIA Vice President (813) One North Dale Mabry Highway, Suite 1000, Tampa, Florida (813) tpghotels.com Copyright 2018, United States of America